Too rich? Too expensive?

It's probably a coincident that these two pieces of news came at the same time. But it makes me wonder how Hong Kong's economy is really doing 10 years after the handover.

The Gini Coeffient

The first piece of news is about the statistics on Hong Kong's Gini Coefficient (GC) released a couple of days ago (original story in Ming Pao via Yahoo.com.hk). The GC of HK had risen from 0.518 in 1996 to 0.533 in 2006, which means that the difference between the lowest wage and the highest wage is widened. An immediate conclusion would be the rich get richer, and the poor get poorer.

Blogger Roland Soong has already raised the question that this might not necessarily be true (related posts in EastSouthWestNorth). While GC does reflect the gap between the rich and the poor, a smaller GC does not guarantee a good economy nor financial equality. A zero GC means everybody are equally rich (or poor). That's supposed to be the perfect scenario, right? Wrong! Any communist country can obtain a zero or near zero GC. But is that the kind of economy Hong Kong would want?

As Fung Hing-wang, Commissioner for Census and Statistics, pointed out, the number of seniors living by themselves is increased from 61,000 ten years ago to 98,000 last year. This alone would have pushed the Gini Coeffient up a few points. However, it doesn't necessarily mean that these seniors are living in worse conditions than their counterparts 10 years ago. Their sons and daughters may still be taking good care of them, and their standards of living may not have changed a bit.

I agree that the government should take note that there's a rise in the GC, and try to figure out ways to get the poor out of poverty. But it's also equally important for all of us to question the motives of those who try to use this statistical findings to work in favor of their political agenda.

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Most Expensive Cities in the World

Yesterday CNN Money.com had a story on the world's most expensive cities. The methodology is to use New York City as the base and then compare how expensive/cheap it is to live in a certain city. The top 5 most expensive cities are, in the order of 1 to 5, Moscow, London, Seoul, Tokyo, and Hong Kong.

In comparison, Hong Kong is 19% more expensive than NYC. This somewhat surprises me because, having been living in San Francisco (which ranked No. 54) & now Texas for 4 and a half years, I've come to a conclusion that you can really get by more easily in HK than in the U.S. if you don't make very much.

I suspect that when they did this survey, they didn't take into account an important social phenonmenon: most single people in Hong Kong live with their parents. This saves them a chunk of money! I can say that loud and clear because I was a beneficiary of this. I had been living with my parents up to the day I got married. I don't have to pay any rent or mortgage (I did give my parents "pocket money", though).

It'd be interesting to see this survey re-evaluated with the live-in factor accounted for.