`We Are Not Prepared'

More immigrants, and a bigger wealth gap, are straining government services

On the fourth-floor landing, Choi Shu Fong pauses to catch her breath. For Choi, 73, getting to and from her tiny sixth-floor apartment is a daily challenge. The old building in the congested Sham Shui Po section of Kowloon has no elevator. At the fifth floor, she pauses again, grasps the banister, and after one more flight finally makes it to her 300-square-foot flat. Choi, who has no children, makes ends meet by renting out a closet-size bedroom to a middle-aged couple for $230 a month. A five-foot-tall woman with a bright smile, Choi says she needs more than the $78 she gets monthly from the government. "Welfare should be expanded so the elderly can have a good living," she says.

Choi's existence seems a world away from the wealth and success that glittering Hong Kong represents. Even though Hong Kong has a British-inspired social welfare system, with subsidized medical care and housing, many people fall between the cracks. Among Hong Kong's 6.3 million people, 11%, or 640,000, live below the poverty line. Soaring property prices have enriched well-connected tycoons and helped the stock market reach record highs, putting housing costs out of reach for many workers and the elderly. Moreover, manufacturing jobs are disappearing, and unskilled and semiliterate workers are making less money than ever. The gap between rich and poor is growing, and people in the middle class are feeling squeezed, too. "There's a lot of frustration," says popular legislator Christine Loh.

With immigrants streaming in from China, the pressure on housing, health care, and welfare is bound to increase. Thousands of working-class mainlanders and their children are expected to try to move to Hong Kong, and officials are concerned about a sudden influx. "There may be 130,000 children," says Chua Hoi Wai of the Hong Kong Council of Social Services. "We are not prepared."

C.H. Tung's government is considering quick fixes. It may limit immigration of children, make more government land available for low- and middle-income housing, and give more assistance to the elderly. Initial plans call for building 40,000 more flats a year to alleviate the 6 1/2-year wait for public housing, in which about half of Hong Kong's people dwell. But Tung's advisers are wary about spending too much and making a big dent in Hong Kong's $64 billion in reserves, which are seen as vital to protecting the Hong Kong dollar from currency speculators. That's why officials are likely to support pension and insurance plans paid for by employers and workers rather than government.

LONG HAUL. Long term, moving the low-income and elderly to land now occupied by the wide-open rice paddies of Guangdong province could be an inexpensive alternative to Hong Kong's chronic land shortage. Policymakers "need to plan with the assumption that the border is blurred," says Jane C.Y. Lee, chief executive of the Hong Kong Policy Research Institute. In May, the Hong Kong Jockey Club donated $22 million to two groups to build housing for the elderly across Hong Kong's border. "This will help a lot of elderly people have a much better environment," says Jockey Club official Wilson Cheng. One benefactor, Helping Hand, plans a 300-bed facility 100 kilometers west of Guangzhou.

But it will take many years before southern China's roads and other infrastructure are able to handle masses of the old and infirm. The Hong Kong government this year has started allowing elderly people to retire to China without sacrificing their welfare benefits, but few have signed up because of the difficulties and expense of getting health care across the border. Policymakers also have yet to work out the problems that might come from having Hong Kongers with special rights living side by side with mainlanders.

Choi isn't waiting. She already spends 10 days a month with relatives in Guangdong. "Everything is cheaper," she marvels. As Hong Kong officials search for inexpensive solutions to their welfare needs, they may hope more people come to the same conclusion.

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