Business Commentary As I Am Traveling

No time for long posts, but I will try to record down interesting observations pertaining to business and commerce. Still in HK, contrary to popular perception, this financial center has many layers to it. The ultra rich (listed company owners and property owners) basically get to enjoy all the perks. HK is a place where its good to be rich. The ultra rich population probably is just the top 1%-2%. Then there is the upper middle class. To qualify, you basically has to have paid up at least one property and be invested / paying off one or two more properties - that will put you in the net assets region of HK10m-HK30m. I think that makes up another 10% of the population. I think I have to qualify here, its 10% of households, and not an absolute number of people.

Its crazy I know, but if your net worth is below HK10m, I don't even consider you as upper middle class, because you are not living as upper middle with your net worth below that in HK. If your net worth is between HK1m-HK10m, you are middle class. That grouping probably makes up another 20% of households. If your household net worth is less than HK1m, you should be living in government flats, busily saving to put down payment on a private property - this grouping should total about 50%. Included in this group are those who are still battling the negative equity aspect from the last financial crisis.

What about the rest? The rest are barely making ends meet, and its a significant grouping, with a large number of them being recent immigrants. Many are just around the poverty line, and would be receiving some sort of subsidy or monthly allowance from the government.

Of course, this is not a scientific data collection but rather from my observations from having been in HK many times over the past 10 years. Its a brutal society when it comes to money. Its unapologetic in its pursuit of money, and when you have it almost all your other character failings an be overlooked. The funny thing is that even the poor would still be wanting to work and live in HK, rather than complaining and protesting of the wide disparity of income between the poor and rich. Here is one place where the poor and striving will work hard willingly, grumble a bit about where they are but will not blame the place or the rich because they somehow embody and breathe the spirit of capitalism - its OK to be poor, but at least its a place that give me a shot at being rich if I work hard, get the right opportunities, and/or the other cards fall in the right places for me.


p/s photo: Rachel Kum

When Not To Go To HK

Was just in HK for business... never go during summer... its like a steam bath sauna every time I go out walking. Just 5 minutes and you will be bathing in your own sweat. I think I took 4 baths a day when I was there. Another reason why one should not be in HK during the last week of September and first week of October is the extended China holiday period. Smiles are forecast across much of Hong Kong for the next 8 days as a stream of visitors with money to spend pours in from the mainland.

Retailers, caterers and people in the travel sector are those who will sport the biggest grins, generated by a windfall as an estimated 8.85 million people pass through border checkpoints. The estimate by the Immigration Department shows a 10 percent increase from the number of visitors last year during the Golden Week holiday period, when most factories in the mainland are closed. This year's holiday has an additional layer on top of Hong Kong's usual shopping and sightseeing come-ons and attractions, with the Mid- Autumn Festival adding zest on October 3.

Joseph Tung Yao-chung, executive director of the Travel Industry Council of Hong Kong, said most tours were 80 to 90 percent booked, and he expects a 10 percent increase in business. The Standard reported last week that the travel sector had forecast a 5-10 percent boost despite the strains of the human swine flu (H1N1).

There is certainly confidence across the retailing, catering and travel businesses that cash registers will ring merrily, with plenty of predictions about double-digit increases in business. Gearing for the rush from the mainland, many shops are hiring extra staff for the first two weeks of October. Officers of the Immigration Department are also bracing for busy times over the next 12 days. About 3.4 million passengers - a daily average of 262,000 - are expected to pass through Lo Wu alone.

The heaviest outbound day will be October 1, when 206,000 people are expected to head into the mainland, but there will be a solid stream flowing in the opposite direction for days. The heaviest inbound day is likely to be October 4, with 196,000 visitors expected to go through the checkpoint. Passenger traffic at Lok Ma Chau is also going to be heavy over the holiday period - an estimated 1.43 million, for a daily average of 110,000 - with October 3 looking like the busiest day.

On top of stopping all leave to handle the rush, the Immigration Department will have additional security guards to help in crowd control. And department officers along with police, customs and the MTR Corporation will be in a joint command center at Lo Wu to oversee traffic and handle any emergency. The department has appealed to would-be cross-border travelers to avoid the October 1-4 period if possible and in any event to be sure all their documents, such as home visit permits, are valid.

p/s photo: Eva Huang Sheng Yi