HK$28m – that is about £2.2m – is quite a lot of money to spend on something to grace your mantelpiece. But this is the price of a pair of white jade pillars on sale at Chinese Arts and Crafts, the store beside Hong Kong’s seething Star Ferry Terminal.
Conspicuous consumption is alive and well in the former British colony. Shoppers queue patiently outside the numerous luxury goods shops; Bentleys and Maseratis make their frustrated way through the traffic jams; while restaurants lure diners with Kobe beef, Boston lobsters and £30,000 bottles of wine.
It is five years since I was last in Hong Kong and what struck me most forcibly over Christmas is the sheer prosperity of the place, the result of relentless economic expansion that shows no signs of slowing. Blink and you miss another World Business Centre soaring into the polluted sky. Turn your back and another suspension bridge has joined a once tranquil island to the maelstrom, or another marbled shopping mall has opened its doors.
I also spent a few days in Panyu which, with a population of two million, is officially too small to be a city. So it is a town in Guangdong some two hours’ drive from the border crossing; a convenient distance, I am told, for wealthy Hong Kongers to install a mistress.
No blue sky since 2008
Panyu’s newfound prosperity is evident. Huge gleaming tower blocks crowd the landscape, the shops are smart and inviting, the people are fashionable, and the bicycles of yesteryear have been replaced by Mercedes and Minis. Mobile phones are in constant use, iPads are ubiquitous. Apple and Samsung are rulers. If Hong Kong is to China what Hollywood is to the USA, Panyu is doing its best to close the gap with the former. Western brands are beginning to appear, with McDonald’s inevitably leading the pack. Those with money want to flash it, and luxury goods stores are only too happy to meet the demand. We went to the circus, I played golf at the excellent Lotus Hill course, and we feasted on dim sum at a hotel which boasted three white tigers in a glass-enclosed courtyard.
For sure, there is still room for improvement. The air quality is abysmal and nobody expects the government to do much about it. The last time Panyu residents saw a blue sky was when the government ordered factories to close down before the Beijing Olympics in 2008. It is sad to see people having to resort to facemasks to keep respiratory problems at bay, and it is no wonder that many wealthy Chinese aspire to retirement in Vancouver.
The roads are lethal. We made the mistake of taking a private car from Hong Kong to Panyu – a terrifying experience. The driver, his foot flat on the pedal, wove from one lane to another and when a toll gate promised to interrupt his progress he simply smashed straight through it! Road signs are few and far between, and ignored anyway. Anybody on two wheels is on a kamikaze mission, zebra crossings have no meaning whatsoever, and the rule of the road is simply that he who blinks first gets out of the way.
Nothing can derail this mighty economic engine
The government introduces regulations that are widely despised. Companies routinely produce two sets of accounts, one showing the true picture and the other a fiction for the tax man, and connections matter more than the law. For the price of a Blackpool B&B we stayed in a hotel of extraordinary opulence, because somebody knew somebody who knew the hotel’s general manager. Building standards are poor and the conditions for workers, although generally much improved, can still be barely tolerable. In one apartment block still under construction, the chemical smell of paint, glue and cement was sickening. And people are still careful of what they say, especially in matters of politics.
For all this, there is an unmistakeable air of progress and a confidence that this will be sustained. The Chinese are proud of what they have achieved and sensitive to criticism. “It is all very well to accuse of low wages”, said one, “but if Western buyers beat down prices, we have no alternative”.
Admittedly Guangdong is one of the most economically successful parts of China. But I heard no voices arguing for political change, and even a grudging admiration for Chairman Mao’s unification of the country. I see nothing that can derail this mighty economic engine. Just as they have done for years in Hong Kong, the Chinese on the mainland are hustling their way to the land of luxury.
• This article is taken from Tom Bulford’s free twice-weekly small-cap investment email The Penny Sleuth. Sign up to The Penny Sleuth here.
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