The Hong Kong role model?

zoom

zoom

Hong Kong is fighting to avoid a house price bubble burst, similar to the one that has hurt Dubai.

GCC states have much in common with Hong Kong, not least their desire to push through the downturn ahead of the rest of the world. But still the Gulf looks more West than the East. Isn't it time that changed?

The Thursday night Cathay Pacific red-eye from Dubai to Kai Tak airport, Hong Kong, is packed. Europeans and Chinese clamour at check-in, all on the hustle for an upgrade or at least an aisle seat.

I last made this journey in 1996, when Dubai was a different city from the sprawling metropolis it is starting to resemble today, and Hong Kong was owned by the British. So much change, then, but not to the demographic make-up of this queue.  Emiratis, in fact ‘Gulfies' in general, are still conspicuous by their absence.

We read all the time of the GCC's burgeoning trade links with China, and of course they are indeed getting stronger. China's economy is about to become, if it is not already, the biggest and most powerful in the world, and trading between the Middle and Far East makes a nice alternative for both sides to solely trading with Europe and America for a variety of reasons, political and pragmatic.

But in Hong Kong, this most magnificent and famous of cities, the Arab influence is not obvious. In London it is. In Geneva it is. In most major European cities, Arab banks and restaurants, for example, are plentiful these days. In fact, last time this correspondent was in London, every cab in the city seemed to be a moving billboard for an advertisement imploring anyone who cared to look to visit Dubai, or Abu Dhabi, or Bahrain, or Qatar.

In Hong Kong, the only evidence of Arab influence I could find, although admittedly I did not search it out in the short time I had there, was a little restaurant called Habibi in Lan Kwai Fong. Its website tells me it puts on belly dancing displays for its customers.

On Friday night, over dinner, I spoke to the manager of one the most famous and luxurious hotels in the city. He's been doing the job for the last fourteen years. I asked if he was seeing an increase in the number of Arabs staying in the hotel, or in other hotels there.

"Not really," was his response. He explained that the Middle East was still a largely untapped market, in tourism terms. With a diffident shrug he explained that people from the Middle East preferred to go to Europe and that it had been ever thus. Perhaps that might change, he said, but he didn't sound convinced.

But residents of Gulf cities could learn so much from visiting Hong Kong, not least from its valiant attempts at preventing a house price bubble burst like the one that has so afflicted Dubai over the past year. Like most Gulf currencies, the Hong Kong dollar is pegged to the US dollar. With American interest rates being held down by the Fed to close to zero percent in an effort to get the economy going again, borrowing has become incredibly cheap in Hong Kong.

Given that Hong Kong is doing just fine in the face of the greatest global economic downturn in living memory (two reasons: it is impressively self-sufficient and it enjoys huge investment from mainland China), low interest rates equate to something approximating free money.

When the crash first hit, Hong Kong property prices dipped some fifteen percent, almost in sympathy with the rest of the world. But this year, particularly  the second and third quarters, has seen them making impressive gains as ‘HongKongers' (they call themselves this, the same way a Noo Yawker is only secondarily an American) have in droves taken advantage of low interest rates to snap up bargains.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM