Who can Hong Kong people turn to?
By Sin-ming Shaw
Hong Kong's elite are short-changing the community. They can and should do more. Take Sir Gordon Wu Ying-sheung, educated at Princeton University in the US. He has famously declared that those who do not pay taxes should not get to vote, a view that finds currency among the privileged.
Without the non-taxpaying truck drivers to move cargo, brick layers to build and taxi drivers to take tourists around, Hong Kong would be dead.
Hong Kong loves rags to riches stories. "Superman" Li Ka-shing is an iconic inspiration to many. The city sorely needs a business party to promote fair and open markets, not through rhetoric, but with a platform to outlaw market-rigging so that future heroes can emerge.
Once upon a time, Teddy Roosevelt rose above his social biases and brought down the "robber barons", members of his own class, making America a more competitive economy. Later, another Roosevelt (Franklin D.) gave the common people a better deal, levelling the playing field further.
Liberal Party leader James Tien Pei-chun had the same promise. Born with money, he is beholden only to his parents. Yet Mr Tien votes against anti-competition laws and chants his mantra: "Hong Kong people are not ready for democracy." By so doing, he slaps the faces of a knowledgable people and insults those who voted for him. Roosevelt material he is not.
The founders of the Democratic Alliance for Betterment and Progress of Hong Kong once had classic communist convictions. They should have been the lightning rod against monopoly capitalism.
Instead, the DAB invariably votes for the status quo favourable to big business, following orders from its masters in Beijing who have become patrons of capitalism. Does the DAB have any moral compass left?
Local communists and their fellow travellers need to learn that they are a mere political convenience, useful when needed, expendable when not. Will they ever wake up?
The Democratic Party, once the people's hope, is a shadow of its former self. Its leaders should "investigate its shortcomings", to borrow President Hu Jintao's words.
The only hope may lie with those independents standing up for democracy. But they need to build an organisation to reach the masses.
Hong Kong's academic leaders have long ceased to provide a voice of thoughtful policy analysis on behalf of the public that pays them handsomely. These leaders covet favours from the ruling elite by showering on them honorary doctorates and trusteeships. With rare exceptions, the business elite return the favour by sending their children to a prestige college abroad, a Princeton or a Harvard, with generous donations to follow. It is a humiliating bargain.
Take the campus bookstores - they resemble corner shops with few books and not much stationery. Property is just too expensive for the colleges to build decent bookshops.
By contrast, the Harvard Co-op or the smaller Columbia bookstore (12,000 sq ft) in expensive New York is an oasis for the curious mind. How can the business elite constantly brag about Hong Kong being world class when it has no decent bookshops? Our eight university leaders should ask the tycoons who wear their honorifics on their sleeves to collectively donate eight first-rate bookstores to serve future leaders.
A good bookshop is a far better manifestation of culture than a nouveau-riche canopy for the West Kowloon cultural hub, costing hundreds of millions of dollars, while so many in Hong Kong are still poor.
If some tycoons now wish to reinvent themselves as arts patrons, they should first provide Hong Kong with fabulous bookshops. How ironic that Page One, the best in town, hails from Singapore - the place that Hong Kong's elite love to denigrate as brain dead.
Do our university leaders have the gumption to tell the tycoons that books, not bricks, are what the mind needs? Will Hong Kong's rich oblige?
Sin-ming Shaw is a visiting scholar at Columbia University. This is the last of a five-part weekly series on Hong Kong's economy and leadership
Donald Tsang - best and the brightest?
By Sin-ming Shaw
Chief Secretary Donald Tsang Yam-kuen is now Beijing's "blue-eyed" boy. The choice may also be based on the central government's assumptions that a person with business connections is unsuitable to become a public leader.
Many people suggest that leaders in the capital shun anyone from Shanghai, a city associated with the faction of former president Jiang Zemin and ex-premier Zhu Rongji , which picked Tung Chee-hwa to be Hong Kong's chief executive. Financial Secretary Henry Tang Ying-yen is also from Shanghai.
If any of this is true, it would be a classic case of throwing out the baby with the bath water.
There are reasons to be wary of Mr Tsang's "qualifications" for the role, other than his intimate knowledge of the bureaucracy. In 1997, anything British was suspect. Now, Mr Tsang's colonial past has become an asset. How the pendulum has swung.
Beijing is ignorant of how Hong Kong worked and has forgotten that people like Mr Tsang were never in the policymaking driving seat. Instead, he and his fellow civil servants were merely implementing policies drawn up by the British.
In other words, he has no experience of conceptualising policies prior to 1997. After the handover, it is different: in the late 1990s, he famously urged people to buy property when the bubble was about to burst, as if it was the government's duty to call the shots in the market.
As financial secretary, he approved the massive intervention in the stock market on the erroneous assumption that the collapse was the work of speculators.
Well before the Asian financial crisis, a number of academics warned Mr Tsang and Joseph Yam Chi-kwong, head of the Monetary Authority, of structural problems in the Currency Board that regulates capital flows and exchange rates. Unless these loopholes were plugged, they said, Hong Kong would be vulnerable to "attacks".
Those asked to present their case recall that their argument was met with condescension, and rebutted, point by point, in the Monetary Authority's April bulletin in 1998. In the autumn, the crisis struck.
The subsequent calming of the market was not, as claimed, due to the stock market intervention. It was because of the famous "seven measures" announced after the intervention - the same ones suggested by the academics and dismissed by Mr Tsang. Without these, Hong Kong's exchange reserves would have been exhausted within one more week.
Now, there is the West Kowloon hub. Mr Tsang insisted on an ostentatious canopy as an "icon" for a city that had "arrived". He insisted on a single-developer approach, and went from a design concept by Lord Foster to actual development, all because he obviously thought he knew best.
All that is most alarming. When Lyndon B. Johnson inherited the US presidency after John F. Kennedy's assassination, he waxed lyrical about inheriting the "best and the brightest". They were urging him to escalate the war in Vietnam.
The "best" included Robert McNamara, a "whiz kid" who, as the president of Ford, took the legendary but near bankrupt car company to renewed glory. With him was national security adviser McGeorge Bundy, a former dean of Harvard, and first in his class at Yale. Johnson's mentor in Congress, Sam Rayburn, a legendary legislator from Texas, famously said: "Well, Lyndon, you may be right, and they may be every bit as intelligent as you say, but I'd feel a whole lot better about them if just one had run for sheriff once."
Johnson did not take the words seriously and led the country into perhaps its worst military and foreign-policy disaster.
There is every indication that Mr Tsang thinks very highly of himself and is not a good listener. Hong Kong may once again have to pay a price for that kind of leader.
Sin-ming Shaw is a visiting scholar at Columbia University. This is the fourth of a five-part weekly series on Hong Kong's economy and leadership
A good tax in service of democracy
By Sin-ming Shaw
On a normal day, only fools, tax-and-spend politicians or billionaires with a conscience seek higher taxes. But not every day is normal. Raising taxes can be good, and lowering taxes may be bad.
Under US President George W. Bush, taxes have been lowered while the country has runaway fiscal and current-account deficits. The US dollar has dived. A better policy would have been to keep president Bill Clinton's higher tax rates, plus add a new fuel tax to cut imports and reduce dependence on Middle East oil. Of course, Mr Bush has done neither.
Hong Kong is only just recovering from six years of recession - raising taxes here is a bad idea. There is, however, a strong case for a goods and services tax (GST) - provided that it is part of a tax reform which must include a cut in direct tax, from the current maximum of 15.5 per cent to, say, 8 per cent.
This is necessary to offset the economic drag of a new sales tax. It would also put a cap on government profligacy that took the administration's share in gross domestic product from 17 per cent in 1997 to 21 per cent last year. Under the reform, every working person must pay income tax.
The Tung administration knows that such a task is too daunting, but the next chief executive will have to tackle the issue. A leader who can summon the best in people could convince them that it is a good idea.
There are three important reasons for a GST. First, it will enable a future government to avoid being over-dependent on property sales and in that process influenced by the private interests of a handful of tycoon underwriters. That relationship is unhealthy for a free society. The government must get revenue from a new source.
Second, a GST introduces more equity. At present, the tax burden falls on a small number of people. Out of a labour force of 3.2 million, nearly 2 million (62 per cent) pay no direct tax. About 300,000 income-tax payers account for 80 per cent of the total tax revenue from the payroll. That is unfair.
Many object to the regressive nature of a GST because the poorer classes would pay more, as a proportion of their earnings, than high-salary earners. This is true, and therefore, we should limit the GST to a less onerous 1-1.5 per cent.
Third, a tax regime that makes every citizen pay into a common "pot" also makes that person aware that everyone has a stake in how the money is spent, and by extension, how the government is run. This would effectively lay a more solid foundation for democracy. Everyone would become far more concerned with public affairs and, out of that concern, future leaders are born. Those unhappy with the way their hard-earned dollars are spent may wish to get elected to kick out those in power.
The people who always say that Hong Kong is not ready for democracy should be pushing for an overhauled tax regime, and should trust the public to vote for its own interests. The end result will be more stability, less chaos. That is what democracy is about.
Sin-ming Shaw is a visiting scholar at Columbia University. This is the third of a five-part weekly series on Hong Kong's economy and leadership
Stardust in Thy Eyes
By Sin-ming Shaw
Hong Kong biggest property tycoons are accorded social prominence and political influence not seen in any other developed society.
Senior government officials treat them with deference. Their public utterances, however pedestrian, are reported by the media as if they were voices from the Burning Bush on Mt. Sinai.
The public no doubt assumes that property industry is at the centre of the local economy dwarfing any other economic sector. Guess again. Its weight in the economy, beyond funding importantly the fiscal budget, is grossly exaggerated.
Take job creation, which must rank at the top of any government’s economic priorities, the property sector comes up short.
Recent data register 62,000 workers employed by the construction industry, 89,000 in the real estate sector totaling 151,500 people.
Hong Kong’s manufacturing sector which everyone has long written off as irrelevant, dying or “dead” has 168,000 on its payroll, besting the combined work force of construction and real estate.
In the import/export business there are 510,000 people employed, over 3 times that in the entire property business.
Then our wholesale/retail/restaurants/hotels sectors also employ nearly 500,000 people.
Overall, these 3 non-property economic areas employ nearly 8 times more workers than the property sector.
If there were to be one person one vote to shape the agenda of the economy, the property owners and workers would have to take a backseat close to the exit door while the “others” would
sit at the front.
Perhaps the property sector generates more value to the economy despite their smaller work force? Wrong again.
Real estate’s share in GDP was 5.3% (2004 figures). Construction was 3.7%. The total was 9% -- not even remotely close to the less glamorous “others” from the wrong side of Mt. Sinai.
The import/export sector contributed nearly 23% to Hong Kong’s GDP. Its sister sector, Transport and Storage, was another 8%. They add up to 31% -- more than 3 times that of the property sector.
Not only does the import/export business contribute far more to the economy, the profits of that sector also vastly dwarf those of the property cartel, and consistently so despite volatile swings in global business cycles.
It is these profits, mostly from Kong owners’ factories turning out unglamorous products sold to the world shipped through Hong Kong as re-exports that are a major source of demand for Hong Kong properties.
Re-export margins -- profits from goods made in China and transshipped through Hong Kong -- as a percentage of GDP went from 10.4% in 1996 to 16.5% in 2003 while Profits of the Real Estate as a percentage of GDP peaked at 5.9% in 1997 which was a bubble year.
Developers are also sellers. The rest of us are buyers. Anyone who has ever bought a share ought to know the interests of buyers and sellers do not usually coincide.
The real drivers of our economy remain the “dead” manufacturing sector now mostly relocated to the southern provinces of China responsible for an estimated 10 million workers in China.
Beijing and the Hong Kong government should be kowtowing to these invisible Hong Kong manufacturers for their contribution to the motherland since “patriotism” is so IN. Instead, both they and the local media continue to treat property tycoons as if they were the rock upon which Hong Kong was built.
In any other developed country developers don’t even rank as the most respectable since the business has little, if any, intellectual content. Underpaid architects provide that.
Developer Donald Trump in New York has wisely turned himself into a media entertainment because he knows his business is not intellectually serious in a country that does not automatically rank money over the mind.
Why is Hong Kong different?
Two reasons. The property industry is concentrated in just a few individuals unlike the other businesses. The impressive concentration of wealth dazzles the way rock or Hollywood movie stars do.
Second, owning properties has been a successful one-way bet for many residents, including those who live in subsidized housing. A prime exhibit is Joseph Yam, the head of the Monetary Authority who had famously “invested” in several luxury flats.
Everyone seems hooked on this habit of property speculation and the tycoons are the biggest suppliers and addicts always kowtow to suppliers.
Stop kowtowing to developers
By Sin-ming Shaw
Hong Kong's biggest property tycoons are accorded clout not seen in any other developed society. Senior officials treat them with deference and their public utterances, however pedestrian, are reported by the media as if they were voices from the Burning Bush on Mount Sinai.
The public, no doubt, assumes that the property industry is at the centre of the local economy. Guess again. Take job creation, which must be at the top of a society's priorities. Here, the sector comes up short.
About 62,000 workers are employed in the construction industry and 89,000 in the estate-agent sector - a total of 151,000.
Yet the manufacturing sector, which everyone has long written off as irrelevant, dying or "dead", has 168,000 people on its payroll; 510,000 are employed in the import-export sector; and the wholesale, retail, restaurant and hotel sector has a workforce of nearly 500,000 people.
Overall, these three sectors employ eight times more workers than the property industry.
If society's economic agenda were decided on a purely democratic basis, the property tycoons would have to take a back seat, proportionate to their smaller contribution to jobs.
So, does property generate more for the economy? No. Last year, property accounted for 5.3 per cent of gross domestic product; construction, 3.7 per cent - a total of 9 per cent. By contrast, the import-export sector contributed nearly 23 per cent to Hong Kong's GDP. Its sister sector, transport and storage, accounted for another 8 per cent - a total of 31 per cent, or more than three times that of property.
Not only does this sector contribute far more to GDP, its profits also consistently dwarf those of the property business. Re-export margins - profits from goods made in China and transshipped through Hong Kong - as a percentage of GDP rose from 10.4 per cent in 1996 to 16.5 per cent in 2003, while property profits as a percentage of GDP peaked at 5.9 per cent in 1997, which was a bubble year. The re-export profits accrued to factory owners and their staff living in Hong Kong are, in fact, a major source of demand for local properties.
The real driver of our economy is the "dead" manufacturing sector, now mostly relocated to the southern provinces of China, which is responsible for an estimated 10 million workers. Beijing should be kowtowing to these less visible Hong Kong manufacturers for creating jobs and adding to the country's foreign reserves. And so should the Hong Kong government. Instead, both treat property tycoons as if they were the rock on which Hong Kong was built. In any other civilised country, developers seldom rank as the most respectable people, as the business has little, if any, intellectual content. Underpaid architects provide that.
In the US, Donald Trump has endeared himself to the public by reinventing himself as an entertainer because he knows that a property developer is not taken seriously in a cosmopolitan city such as New York.
Hong Kong, alas, is different. The property industry is in the hands of a few individuals whose wealth is dazzling. Then there is the fact that owning properties has mostly been a good bet for many residents, including those in subsidised housing. Buying properties has become like a drug culture. Even Joseph Yam Chi-kwong, head of the Monetary Authority, "invested" in several luxury flats.
Everyone seems to be addicted to property speculation, and the tycoons are the biggest suppliers. Addicts always kowtow to suppliers, and the government has been hooked for many years.
Sin-ming Shaw is a visiting scholar at Columbia University. This is the second of a five-part weekly series on Hong Kong's economy and leadership
An open alliance of property addicts
By Sin-ming Shaw
The Hong Kong public is upset at the alleged collusion between the government and big business. The jury is still out on the issue, but there is definitely something going on. That "something" is much less secretive than conventional wisdom would suggest. It involves institutionalised relationships between government and the biggest property companies. This relationship is not clandestine, but open, and it pre-dates the current administration.
At the centre of the bond is the addiction to land revenue, with the property tycoons as the principal suppliers. Almost the entire population is also addicted to the idea that trading in property is a life-long profitable habit.
Last year, land income was 2.6 per cent of total operating revenue. It was low because the government stopped selling land, to support property prices. Historically, the share has been much higher, reaching 25 per cent in the 1997-98 financial year. As the economy recovers, land's prominence in the budget will rise again.
Many believe that land-related income is understated in the budget because it excludes profits tax on property companies and stamp duty on property shares trading.
A double-digit share in the budget has political significance because less than half a dozen developers typically account for most of that revenue. Among them, three dominate: Cheung Kong, Sun Hung Kai Properties and the Henderson Group.
The developers rely on the government's co-operation to ration its sales, thus ensuring prices rise over time, notwithstanding short-term volatility. Protesters against "collusion" sometimes forget that these tycoons are major underwriters of public finance. Put another way, they are an arm of the Inland Revenue which collects from the tycoons who, in turn, collect, via a finished product at monopolistic profit margins, from the end-users. Naturally, the government is tolerant of this exclusive club because it is a dependable tax collector. The administration is understandably against enacting anti-competition laws, as they would impinge on tycoons' interests that have extended beyond property. Higher revenue also allows senior officials to pay themselves salaries several times higher than those of their counterparts elsewhere. Joseph Yam Chi-kwong, head of the Monetary Authority, who controls neither money supply nor interest rates, is the world's highest paid "central banker".
The top developers sit on huge inventories of land that could supply at least six years of total private housing needs. Hong Kong property tycoons are the world's biggest land speculators. Sun Hung Kai, Cheung Kong and Henderson are the world's three largest property companies. Their financial success depends critically on a co-operative government which values this co-dependent bond that has served both parties well.
Former governor Chris Patten learned the hard way by fiddling with that relationship. In 1994, when he wanted to curb runaway property prices, he broke with tradition by not consulting the tycoons before launching his measures.
At a historic auction in May of that year, the 12 largest property companies formed a united front to hugely underbid for two multibillion-dollar residential property sites. No other developer tried to outbid it. In fact, no one else could afford to.
The government was shocked. Unlike the climax to the classic western High Noon, this time the sheriff was gunned down by the bad guys. Never again did Mr Patten try to upset the financial relationship. This has remained intact, until Chief Executive Tung Chee-hwa began to show apparent favouritism to one family - riling the other tycoons. Will there be a price for Mr Tung to pay?
Sin-ming Shaw is a visiting scholar at Columbia University. This is the first of a five-part weekly series on Hong Kong's economy and leadership
It’s the Budget, Stupid!
By Sin-ming Shaw
The Hong Kong public is upset at “collusion” between the government and big business.
Collusion means secret agreements between officials and private individuals for deceitful or illegal activities. The jury is still out on this issue. However, there is definitely something going on.
That “something” is much less secretive than conventional wisdom would suggest. It involves institutionalized relationships between government and the biggest property companies, not with all tycoons or all developers. This relationship is not clandestine, but open and it pre-dates the current administration.
At the center of the bond is the budget’s addiction for land revenue with the property tycoons as its principal suppliers.
Almost the entire population is, too, addicted to the idea that trading in properties is a life-long profitable habit.
Last year the share of land income in total operating revenue of the fiscal budget was 2.6%. It was low because the government stopped selling land to support property prices. The share was historically much higher reaching 25% in fiscal year 1997/98. As the economy recovers, land’s prominence in the budget will rise again.
Many believe land-related incomes in the budget are understated because they exclude profits tax on property companies and stamp duty on trading of property shares on the stock exchange.
A double-digit share in the budget has political significance because less than half a dozen developers typically account for most of that revenue. Among them 3 companies dominate: Cheung Kong, Sun Hung Kai Properties and the Henderson Group. Many believe Cheung Kong’s chairman is first among equals.
The developers rely on the government’s cooperation to ration its sales to ensure prices would rise over time notwithstanding short-term volatility.
Protestors against “collusion” sometimes forget that these tycoons are major underwriters of public finance. Put it differently, they are an arm of the Inland Revenue which first collects from the tycoons who in turn collect, via a finished product, at monopolistic profit margins from the individual end-users. The margins average 50%, sometimes over 100%, besting knowledge-based monopolies such as Microsoft.
Naturally the government is tolerant of this exclusive club since it is a dependable tax collector. This government is understandably against enacting anti-competition laws for they would impinge on the top tycoons’ interests that have extended beyond property.
Higher government revenue also allows the senior officials to pay themselves fabulous salaries several times more than their counterparts anywhere on this planet.
Joseph Yam, the Head of the Monetary Authority, who is not even a central banker for he controls never money supply nor interest rates, is the highest paid “central banker” in the world.
Like the now disgraced former chairman of the New York Stock Exchange, Richard Grasso, his compensation was determined by a committee with many members whose business the Monetary Authority regulates.
The top developers sit on huge inventories of land accumulated over the years that could supply at least 6 to 7 years of total private housing needs. Hong Kong property tycoons are the world’s largest land speculators. Sun Hung Kai, Cheung Kong and Henderson are the world’s three largest property companies. Their financial success depends critically on a cooperative government who values this co-dependent bond that has served both parties well over many years.
Former governor, Chris Patten, learned the hard way by fiddling with that relationship.
In 1994 when Chris Patten wanted to curb runaway property prices, he broke tradition by purposely not running past the tycoons for advice and consent before he launched his measures.
At a historic auction in May of 1994 twelve largest property companies formed a united front to grossly underbid two multi-billion dollar residential properties. No developer outside the united front raised a hand to outbid the cartel. In fact, no one else could afford to bid for multi-billion land except the cartel.
The government was shocked by the showdown. Unlike the climax at the classic cowboy movie, High Noon, the Sheriff this time was gunned down by the bad guys.
Never again did the Patten administration dare to upset that financial relationship which remains intact to this day until the current Chief Executive began to show apparent favoritism on one single family at the cost of riling all the other tycoons.
Sin-ming Shaw is a visiting scholar at Columbia University, New York.
Bow out with some dignity, please
By Sin-ming Shaw
Is the Hong Kong government once again set on stirring up unnecessary social discontent while fuelling rampant cynicism? The issue at stake is the West Kowloon cultural hub, which is meant to become a "world-class arts, cultural and entertainment district". At 40 hectares, it is about twice the size of Tsim Sha Tsui.
For the "culture" portion, the Tung administration insists that there must be a canopy, up to 40 storeys high, covering 55 per cent of the land. A detailed study commissioned by the Arts Development Council estimates that it would cost close to $6 billion. The government insists that the real price will be $2-4 billion, but it has not provided any backup data.
Even if the government was right, the canopy entails an absurd expense for a roof with no discernible purpose except perhaps to satisfy the ego of a few public servants hungry for a legacy.
More bizarrely, the government insists that only one private property company should develop this project. This shuts out nearly every enterprise in Hong Kong, including the government - except the largest and richest property companies.
Further, any developer worth his salt can tell you that if the land was sold by auction separately, the public coffers would receive far more revenue than by handing it to one developer. More money would mean that more could be spent on the cultural and arts side of the project. The government, however, asserts that this plan would fail.
The three finalists represent six of the richest property families. Industry analysts say that the winning bidder will become a price maker in the property market. Senior government officials insist this will not be the case. But its record in forecasting supply and demand, hence, property prices, has been comical since 1997.
The financing of the cultural portion will come from the profits of the developer. Ask any taxi driver and he will tell you that the cultural hub is, in fact, a property project. But Chief Secretary Donald Tsang Yam-kuen denies that, too.
Everyone agrees that more culture is a good thing, and yet many people remain unconvinced that all those billions could not be more wisely spent on human capital rather than bricks and concrete. And they have said as much.
But community activists say that Mr Tsang has only paid lip service to their concerns over the years, casting doubt on the value of the ongoing public consultations.
If the government has decided that both the one-developer approach and the canopy are non-negotiable, many people are questioning the value of any consultations. District councillor Ada Wong Ying-kay, a well-known arts promoter, describes Mr Tsang's behaviour as "insincere, inconsistent and dismissive" during meetings.
The people are not angry at the developers' talent to bag a great deal - a skill which is much admired in this town. But they are mad at their leaders, who are supposed to represent them. These officials are, in many cases, acting increasingly as if they were already personal assistants to the most powerful property families - before their retirement.
A number of top officials - including former chief of police Tsang Yam-pui - have, after retirement, made a beeline for lucrative jobs in property companies that, many allege, are now beneficiaries of the government's sweetheart deals.
In a much publicised week-long celebration last winter for his son's wedding, Donald Tsang invited several hundred of his "best friends" to three different parties. The list read like Hong Kong's Who's Who. One guest half joked that he saw the owners of the entire gross domestic product in the banquet room.
The chief secretary sits above government bodies that regulate just about every business his friends own in Hong Kong. While he is well within his right to broadcast the fact that he has rich friends, is that the kind of behaviour for civil servants to emulate? Shouldn't a public leader bend over backwards to avoid any appearances of a possible conflict of interest? One senior communist visiting at the time remarked wryly that this would not happen even in Beijing, where corruption is rampant, unless the minister in question wished to finish his dessert in a detention room. During the dotcom years, the government handed over Cyberport without a tender, or wanting any money upfront, to Richard Li Tzar-kai, the young scion of the richest man in Hong Kong. The other tycoons were furious. A delegation reportedly marched to see Chief Executive Tung Chee-hwa, offering $80 billion to buy that land from the government - all to no avail.
As if on cue, the government this year sold to two of these unhappy developers the controversial Hunghom Peninsula waterfront housing estate. Many believe that the administration has been less than candid regarding the terms and conditions under which the deal was struck, allowing the new owners maximum flexibility in redevelopment.
Two of the three West Kowloon cultural hub finalists freely admit in private that their chances are slim, because they believe the government has long decided on the chosen one: the joint venture between Cheung Kong and Sun Hung Kai Properties.
These potentially unsuccessful bidders are, nevertheless, happy to invest a few million US dollars on the bidding process. Clearly, they must feel confident that the government will "feel their pain". Meanwhile, no outsider can obtain any financial details.
Christine Loh Kung-wai, the founder of policy think-tank Civic Exchange, demands to know: "Why is there no transparency when the public is, in fact, financing the future developer by providing it with the land?"
Others ask why the government is prepared to be flexible on the plot ratio restriction, while remaining fixated on the canopy and the one-company approach.
During the colonial heydays, the governors, too, were sympathetic to the financial interests of British firms. But they seldom forgot that they were representing higher ideals than just money. Nor did they allow friendships formed at Harrow, Winchester, or later at Oxford or Cambridge, to influence public policies.
With rare exceptions, past governors and senior civil servants retired with dignity, living off their already generous pensions. Now, senior civil servants retire to multimillion-dollar jobs with property companies or as private consultants to them.
If this administration and future ones wish to show the world that Hong Kong can indeed be better governed by ethnic Chinese, they could do a lot worse than remember a few lessons about public governance from their former colonial masters.
Sin-ming Shaw was formerly a visiting fellow at Oxford, reading British imperial history.