The Special Administrative Region of China, better known as Hong Kong has come up with plans in order to deal with the housing crisis that it is currently going through. The property market is the least affordable in order to draw customers is planning to construct four artificial islands. The islands would be around a fifth the size of Manhattan and might be able to house more than a million people.
The government-backed plan to construct a glittering property and commercial hub has been tried and tested before also. For instance, Dubai’s Palm Jumeirah, which is basically a palm-shaped archipelago, is having luxurious developments. Similarly, one can also take a look into Malaysia’s housing project Forest City that has been dedicated for 700,000 people. Also, Singapore’s Jurong Island provides energy and chemical facilities.
However, developing artificial islands in Hong Kong has a number of distressing issues, such as price tags. In Hong Kong dollars, the project might cost a whopping $500 billion ($63.8 billion).
There are technical as well as political challenges. For instance, during a referendum in November, it was revealed that 49% of the public opposed the plan of building artificial islands. Added to that the environmental costs associated with the project is a huge one. Although, the government claimed that for the project they have selected a less ecologically sensitive area.
Paul Chan Financial Secretary recommended that the government might issue bonds to fund the project, amidst worries that the city could run into small fiscal deficits in the coming years. However, Chan Ka-Keung, Former Secretary for Financial Services and the Treasury, stated that the project is fiscally justifiable as the government would be able to reclaim costs since the constructed land would have important commercial value.
For the government of China, the notion was clear, as it holds some control on Hong Kong under the axiom of ‘one country, two systems’ Chinese President Xi Jinping plans to convert the Lam envisions Lantau, the biggest outlying island of the city, into a trillion dollar economy and compete with Silicon Valley.
Steve Tsang, director of SOAS China Institute at the University of London, stated that the plan might be going in the right direction for China; however, for Hong Kong, it might not be the right one.