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Sandwich Class Confronts Mainlanders Over Hong Kong’s Future

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Wilson Wong is manning a barricade in the heart of Hong Kong, letting only emergency vehicles pass, when a purple Bentley drives up and tries to force its way through. As fellow protesters jump in front of the luxury car, two women get out and start yelling at them in Mandarin.

Immediately the tension escalates. Most Hong Kongers speak Cantonese. For Wong and his fellow students, Mandarin means mainlanders. Their anger reflects an underlying resentment fueling the city’s two-week-old protest: that the flow of people and wealth from across the border has strained the city’s services and driven the cost of a home out of reach of most.

“The place we live in is changing with more mainlanders,” said Wong, a part-time computer-science student. “They may help our economy but they’re bringing bad practices and driving up prices.”

The frustration is especially evident with the middle class, who mostly have been shut out of the city’s economic gains as their wages rose more slowly than the economy while prices soared. Wong, who lives in his parents’ 500-square-foot (46-square-meter) apartment, identifies himself as part of this Sandwich Class, so-called because it’s squeezed between the rich who get an increasing share of the city’s wealth and the rising numbers of poor who are draining money for public services.

At the heart of that squeeze is property. Hong Kong now consistently ranks among the five most-expensive cities in the world alongside New York, London and Paris, and a real-estate index in the city rose to a record in September.

Multiplying Millionaires

Rising asset prices have made Hong Kong home to the highest concentration of multimillionaires on earth, yet one in five live in poverty. Half of Hong Kong earns less than HK$13,000 ($1,676) a month, and 13 percent earn less than HK$5,000, according to government figures. Nearly half the city lives in public or subsidized housing.

“The protests are a perfect storm,” said Paul Yip, professor of social work and social administration at the University of Hong Kong, in a phone interview. “We made this situation. Ninety percent of the protesters are aged 30 or below. It’s the frustration of looking for jobs but not being able to get decent pay. They cannot tell where they are going. They see no future.”

Even as the city’s wealth gap widens, a steady stream of people come from the mainland to shop, buy property and take advantage of medical facilities. The backdrop to the students’ barricades in Causeway Bay and Admiralty is a parade of luxury-brand shops such as Fendi, Chanel and Salvatore Ferragamo that mostly serve rich Hong Kongers and mainlanders and would normally be having one of their busiest times of the year.

Hard Times

Instead, sales at major retail chains fell as much as 50 percent during the first five days of the Chinese National Day holidays last week, as the protests disrupted the bonanza, according to a survey by the Hong Kong Retail Management Association. Watch and jewelry sellers were among the hardest hit.

Since China regained control of Hong Kong in 1997, “the lives of the middle class are getting worse and worse,” said Terry Mao, a shipping clerk who used his annual leave to join the pro-democracy protesters in front of Hong Kong’s main government building after he saw police firing tear gas at students on Sept. 28. “You see the neighborhoods where there are only gold shops and pharmacies catering to mainland tourists. There are so many Chinese.”

Mao, 32, said he lives with his parents an hour from his office because he can’t afford his own place. His father is a retired ship captain who earned enough to buy an apartment.

Generation Gap

“I have fewer opportunities than my parents,” he said. “Lunch, dinner, my shirt — everything is getting more expensive, but my salary is staying the same.”

While concern about living standards has added fuel to the protests, students are also driven by ideology, said Yip at the University of Hong Kong. “They also have the aspiration to have a fairer society,” he said.

Tensions over Beijing’s role in Hong Kong have been building for more than a year. On June 4, tens of thousands crowded a vigil in Hong Kong to mark the 25th anniversary of the 1989 Tiananmen Square crackdown.

Seemingly arcane bureaucratic issues — such as a decision to grant broadcasting licenses to companies controlled by Hong Kong billionaires instead of a startup operator — have drawn thousands of protesters who saw it as a battle over free speech and containing Beijing’s influence in Hong Kong.

Hong Kong has the highest inequality in the developed world, according to Paul Schulte, head of Hong Kong-based Schulte-Research. The bottom 30 percent of Hong Kong has only 6.4 percent of the wealth, while the top 30 percent have 70 percent, a trend he blames on a political and economic elite that are out of touch.

Trailing Rwanda

“Hong Kong is a more unequal society than Paraguay, Rwanda, Egypt, Niger or Ecuador,” he wrote in a note. “More and more people are being deprived of the dream of a better future, have no hope of ever owning their own apartment and are living in shoe boxes.”

Dawn Wong, preparing a sign while seated on the divider in the middle of an empty highway, has had enough. The daughter of a single mother, a cleaning lady who earns HK$8,000 a month and lives in public housing, saved up to move to Sweden where she just completed a design degree. She flew back to lend her support to the protests.

“For us young people, now it’s too hard to buy an apartment no matter if in the city center or far away, even if you get a decent job,” she said. “In Sweden, food may be expensive, but an apartment is super cheap compared to Hong Kong.”

Around the corner, 20-year-old student Ron Lau sits with a group of smokers, some with skateboards and rollerblades. His dream is to open his own mountain-bike shop after he wins enough races. He works part-time in an ice-skating rink and lives with his younger brother and parents in a 300-square-foot apartment.

Lost Savings

His father earns about HK$10,000 a month — just enough to disqualify them from public assistance, he said. Sometimes, the money he saved for his shop goes on rent, or groceries, or medicine.

“This world is crazy. It’s getting harder and harder since the handover,” said Lau, wearing a t-shirt with the logo BMX Revolution. “Britain could have made this place better. The poor keep getting poorer and the rich get richer.”

Back at the barricade, the Bentley gives up, but is soon replaced by an Audi R8 trying to get through.

“They keep pushing us,” said a 24-year-old part-time business school student who would only give his first name Heman because he feared his father’s anger. “You pay taxes for the mainlanders who come here and get all the benefits.”

To contact the reporter on this story: Shai Oster in Hong Kong at soster@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Adam Majendie, Young-Sam Cho