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Last Updated: Monday, 2 July 2007, 07:31 GMT 08:31 UK
Hong Kong wealth soared after handover
By Juliana Liu
Business reporter, BBC News, Hong Kong

Shoppers in Hong Kong
Wealth in Hong Kong has soared following the handover
Hong Kong's skyline is flashy at the best of times. But now, the neon is going into overdrive.

Big corporations are trying to outdo each other to celebrate the 10th anniversary of Hong Kong's handover to China. And the city has much to cheer about.

In many ways, life has not changed.

Some feared Beijing would crush the city's spirit. But believe it or not, Hong Kong is 40% richer than it was 10 years ago.

Ever resourceful, its locals have bounced back from the Asian financial crisis and SARS. The economy is growing at its fastest since the 1980s. And it is still a great place to do business.

That is the case for stock trader Andy Lee, 37. He took a gamble on Hong Kong 11 years ago, and he is one of many to hit a lucky streak since the handover.

Originally from New York, Mr Lee has done so well that he has opened a club near Lan Kwai Fong, the downtown pub street.

The stock market has been hitting record highs day after day. And there is one big reason: China.

Ronald Arculli, head of the Hong Kong stock exchange, says he is the envy of exchanges around the world.

Failed constituents

But there is a side to Hong Kong tourists rarely see.

Hong Kong at night
The Fragrant Harbour is no longer such a source of envy

Kowloon is located across the bay from the main island. It is home to two million people, some of them old, many of them working class. Here it is possible to find whole families living in a single room.

Li Jinfeng, in her 40s, is divorced and unemployed. It is getting harder and harder to put food on the table for her 12-year-old daughter. She has been looking for a full-time job for five years now.

Ms Li moved to Hong Kong nearly 15 years ago from the mainland, looking for a better life. But her hopes have been shunted aside by the her homeland's prosperity. Previously plentiful, factory jobs have moved to the mainland.

"This is a problem with society, not with people like me," she says. "We want to work."

Albert Chan, Ms Li's local legislative councillor, feels the same way. He says the government has failed many of his constituents.

Yet Hong Kong's newly promoted chief secretary, Henry Tang, insists the handover has been a complete success. He is vowing to do more to help unemployed Hong Kong people.

Worthy rival

To understand the pressures Hong Kong is facing, leave the territory and go across the border to mainland China. It is a rather crowded train ride, but it lasts for 45 minutes.

Half a million people commute from one side to the other regularly: to work, to see relatives or just to shop.

And the city on the other side is Shenzhen, one of the first places China opened to foreign investment. It is a glass and steel boomtown, launched by Paramount leader Deng Xiaoping, the mastermind behind China's economic reforms.

Southern China has more to offer than just cheap workers these days. Shenzhen, for one, is looking more and more like Hong Kong, but with lower wages and without the expats. It's motto is: anything Hong Kong can do, we can do better.

Mr Le Zheng, an academic and advisor to Shenzhen's parliament, says Hong Kong has reason to feel anxious. Cities like Shenzhen, Shanghai and Guangzhou are catching up quickly.

Mainland arrival

For now, Hong Kong people are still carving out a space for themselves on the mainland.

Many cities in mainland China now rival Hong Kong

The Joyful factory makes bespoke furniture. It is owned by Hong Kong investors and staffed by more than 1,000 Chinese workers. It is just one of the thousands of plants that have moved to the mainland in the last 20 years.

Factory boss Kelvin Law, 29, is a Hong Kong native. His business has changed unexpectedly since the handover. Now, half his customers are from mainland China.

For a century, the Fragrant Harbour was the place that all other Chinese cities aspired to be.

But as the rest of the country catches up, soon Hong Kong may have to get used to being just another high rise city in greater China.

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