Page 1 of
2 Yuan changing hands, attitudes in
Hong Kong By Kent Ewing
HONG KONG - Things have never been better
in this Asian hub for shopping and finance if you
are Chinese - mainland Chinese, that is, and flush
with the country's steadily appreciating currency,
the yuan.
Ironically, as Hong Kong's
mini-parliament, the Legislative Council, debates
whether now-commonplace discrimination against
mainlanders should be outlawed in a proposed
anti-racism bill, the mainland currency is
increasingly accepted at parity with
the
Hong Kong dollar by the city's merchants.
Because mainlanders do not constitute a
different race from the ethnic Chinese who make up
96% of Hong Kong's population, it is unlikely that
they will be included under the bill's
protections, but the yuan's exchange prospects
only get rosier with time. And the city's tourism
board hopes this means an increase in visitors
from the mainland, despite the shabby treatment
that sometimes greets them here.
It may
not be long before Hong Kong people can no longer
afford to look down on their brothers and sisters
from across the border as they look up at the
rising yuan. A typical Hong Kong shopping foray
reveals the increasing popularity of the Chinese
currency. Nowadays, the yuan is virtually a second
currency circulating in Hong Kong's market.
The first stop for an Asia Times Online
correspondent was a branch of Fortress, an
electronics chain well known for its reasonable
prices and reliable quality, in the city's Wan
Chai district. The salesman there was more than
happy to accept yuan and offered HK$-yuan parity
for a number of items that the store is promoting
with tourists from the mainland in mind: digital
cameras, mobile phones, MP3 players and more.
But for other products, the Fortress
exchange rate is 0.98 yuan to HK$1. Because the
correspondent did not carry a mainland passport,
however, even the promotional parity did not apply
in his case.
Out on the street, merchants
were not so picky when offered yuan at parity.
"No problem," replied a salesman hawking
mobile phones and an array of related accessories
at a small shop on Johnston Road. Indeed, he
appeared pleased to see the Chinese currency,
whose value is expected to increase against the
Hong Kong dollar.
At Langham Place, an
upscale 15-story mega-mall known for attracting
well-heeled mainland tourists, the yuan is
universally welcome. The complex in Mongkok
occupies two blocks of city real estate and houses
a 59-story office tower and a 665-room hotel. It
hosts a cinema complex, a food court and more than
100 trendy shops, such as French Connection,
Armani Exchange and The Body Shop.
While
the Langham branch of the Japanese-owned
department store Seibu offered a stingy 0.935 yuan
to HK$1, at Continental Diamond, on Level 2 of the
mall, one could buy the stone of his or her choice
at parity. "We have many tourists from China
shopping here," said shop assistant Gigi Ching,
"and we offer a very good price."
Outside,
on teeming Portland Street, away from the cachet
of the mall's boutiques, parity is the norm -
whether you are loading up on designer perfumes
and makeup at Sasa Cosmetics or buying a candy bar
at 7-Eleven.
The question now for
merchants and mainland shoppers alike is: How soon
will it be before the yuan trumps the local
currency, which is pegged to the US greenback at a
rate of HK$7.8 to US$1? That will only make Hong
Kong more attractive to mainland tourists, who are
now regarded as big spenders in this former
British colony.
Yuan appreciation may also
add fuel to the city's high-priced property
market. Currently, mainland buyers account for
"less than 5%" of the market, according to Wong
Leung-sing, associate research director for
Centaline Holdings, one of the largest property
agencies in the city. But that could increase as
the yuan appreciates, especially in the luxury
sector, where a growing number of very rich
mainland entrepreneurs have already made an
impact.
Just on Monday, many local
property agents were taken aback by the news that
Sun Hung Kai Properties had purchased a
residential site on The Peak, Hong Kong's most
exclusive area, for HK$1.8 billion (US$231.5
million). The site has a potential gross floor
area of only 42,658 square feet (3,963 square
meters), which local property experts say makes it
the most expensive piece of real estate in the
world. For Sun Hung Kai to make a profit, it will
need to offer an extraordinary sales price of
HK$50,000-HK$60,000 per square foot (about
HK$538,000-HK$646,000 per square meter) for the
luxury houses it plans to
