Inequality in Hong Kong


The Census and Statistics Department (C&SD) of HKSAR Government recently announced that the Gini Coefficient, a measure of inequality (based on original monthly household income) was 0.539 in 2016, a historically peak since 1971.  The C&SD of course did not mention this latter piece of information in its press release.  Instead they said the higher Gini Coefficient “indicated that the household income disparity widened during the period under the effects of population ageing and an increase in households with one person or two persons as indicated above”.

There is also one more thing that the C&SD failed to mention: According to the CIA website, Hong Kong’s Gini Coefficient is so high that it ranks no. 9 in the world, fares better only to the below countries: Lesotho, South Africa, Republic of Central Africa, Federal States of Micronesia, Haiti, Botswana, Namibia and Zambia.  As far as all independent economies in the developed world are concerned, Hong Kong’s Gini Coefficient definitely ranks world no. 1.


If Hong Kong’s aging population could be cited as a justification to the rising Gini Coefficient, let’s look at Japan, a country which is ageing so fast that its population is actually contracting.  What is its Gini Coefficient? 0.379, ranking 73 on that chart.

Perhaps the C&SD had noticed that comparsion with other countries makes Hong Kong look really bad, its press release directed citizens’ attention away from this comparison by saying that: ” In general, income disparity of metropolitan cities tends to be higher than that for individual countries due to difference in economic structure. Hong Kong is a metropolitan city. It is considered more appropriate to compare the income disparity situation in Hong Kong with other metropolitan cities rather than individual countries.”

Interestingly enough, comparisons are predominantly drawn with cities in the US {New York City (0.551), Washington, DC (0.535), Chicago (0.531), Los Angeles (0.531) and San Francisco (0.521)} a country which has the worst Gini Coefficient in the western world.  And so what? Does the fact that these US cities have similar Gini Coefficient justify our suffering to live in a city which has the least affordable housing in the world?  UN-Habitat regards Gini Coefficient of 0.4 the international alert line.  A situation which if no remedial actions are taken could discourage investment and lead to sporadic protests and riots.  Indeed protest and riots have already happened in this city…

The ultimate ludicrousness shows up at the end of this press release, when the C&SD spokesman added that “the Gini Coefficient only reflected household income distribution. Although the effects of taxation and social transfer were taken into account, it did not consider the assets owned by households and hence could not fully reflect the actual economic well-being and living conditions of some “income-poor, asset-rich” households. The figures should be interpreted with caution when the Gini Coefficient is used as an indicator to reflect the gap between the rich and the poor.”

Since the spokesman asked, let us talk about asset.  According to a Bank of America Merrill Lynch report, the net worth of Hong Kong’s billionaires in 2013 represented 76.4 per cent of the city’s gross domestic product. Sweden’s billionaires were a distant second accounting for 20.7 per cent of GDP. Next was Russia with 20.1 per cent, Malaysia 18 per cent, Israel 18 per cent, Philippines 16.5 per cent and Singapore 16.3 per cent. US billionaires accounted for 13.8 per cent of GDP, Britain’s 6.2 per cent, China’s 3.5 per cent and Japan’s 1.9 per cent.

The C&SD, let’s use this to measure the gap between the rich and the poor in Hong Kong, shall we?


Photo credit: Joey Kwok Photography 


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