Transcription
Hong Kong's Gross Domestic Product (GDP) in the first quarter of this year saw a real increase. Not only did the growth accelerate compared to the fourth quarter of last year, but it was also the strongest single-quarter growth in nearly five years. If one only looks at the GDP figures released by the Census and Statistics Department, one might mistakenly believe that Hong Kong has returned to its golden 1990s era. The numbers make it seem as if a filter has been applied, causing government officials to lead the celebrations. Our column, "The Middle-Class Economy," published an article titled "The Gap Between Bright Data and Reality" to explain this.
GDP growth was largely driven by the recovery of tourism figures. This recovery is related to external factors. The war between the United States and Russia has led to high geopolitical risks in Hong Kong and mainland China, causing mainland tourists to choose Hong Kong. During the recent May Day Golden Week, over 1.01 million inbound and outbound travelers were recorded, significantly exceeding expectations. In May, the most popular destination for mainland tourists, Guangdong, saw no decrease in visitor numbers. This is likely due to increased demand driven by the rise in gold prices. The shops in Tsim Sha Tsui were packed, and even the luxury stores seemed to be experiencing an unprecedented surge. A new flagship store opened, with a minimalist interior design, a stark contrast to the previous impression of Tsim Sha Tsui's glittering gold. However, the prices remain stubbornly high. A gold bracelet can cost nearly 500,000 yuan. Even though the US stock market frequently breaks records, one might think, "These opportunities don't belong to me; they only belong to those who spend money without restraint."
The consumer spending patterns and government expectations are out of sync. Currently, most tourists are more interested in shopping and dining, and their pulling effect is not as strong as before. Therefore, looking only at the number of visitors without considering per capita spending can easily lead to misinterpretations. In a non-prime location in Mong Kok, a noodle shop pays a monthly rent of 130,000 yuan. This is not a prime commercial area, which raises questions. How many bowls of noodles does a small shop need to sell daily to afford such expensive rent? Ultimately, the owner will be unable to sustain the business and will have to leave. Hong Kong's shop rents are severely detached from the actual business environment. Everyone knows this. In fact, it's not just the property market; the structural problems in the film industry are also similar. Both have experienced extreme highs.
Actors' exorbitant salaries and the inability to objectively quantify metrics have led to a downturn in the industry. When the industry is in decline, even top actors have to face reality. The most famous example, of course, is Louis Koo leading the charge to support productions. Another example is his film "The White Storm 2 - Drug Lords," where profit sharing only occurs after a certain threshold is reached. When filming "The White Storm," he even paid for post-production himself after the film was completed. The era of sky-high salaries and constant contract breaches from the 1990s is over. People in the film industry must also get their feet on the ground.
Returning to the property industry, property owners and landlords are often unwilling to get their feet on the ground. They fear high interest rates and being heavily indebted to banks. The market is now being touted as recovering, with some exaggerating the potential increase to 50% to 60%. In reality, the market is only being propped up by high prices, with some registered sales barely meeting demand, but the value of properties continues to plummet. The bottom of the property market is being used for speculation, but in reality, the wave of restaurant and retail closures continues. The property market is trying to turn things around, but the high operating costs and limited profit margins mean that new businesses cannot be sustained. The film industry is beginning to reform, with actors willing to accept reduced salaries and profit-sharing terms to save the industry. However, the property market remains stubborn, continuing to maintain high rents.
GDP figures are a bit like the weather. The Observatory releases a number, but looking at the temperature gives a different feeling. Although Hong Kong's GDP growth is good, the retail and cultural economies, such as the film industry, are still facing challenges. IPOs frequently break records, but there are many regulatory issues and violations. Ultimately, even regulatory departments cannot pretend not to see them. There is a gap between the numbers and reality, and the cost of post-production assets is limited. The government's economic data may be the reason for high rents, and the middle class seems to be unable to fully benefit from the fruits of the new economy. Exclusive YouTube offer: Scan this QR code to get a one-month online subscription for only 30 yuan, without even waiting half a day.