Hong Kong has made significant progress on Wednesday toward ending its social and political stalemate.
First, the legislature killed, for real and finally, the hated extradition bill that would have allowed the rendition of suspects into China's rigged legal system.
Second, China appears set to replace the politically crippled leader of the city, Carrie Lam. It is drafting a plan to replace her with an "interim" chief executive, as the city's leader is known, according to a report in the Financial Times.
But all anyone wants to talk about is real estate. Specifically, how much it costs to park your car.
Literally every other car in the country-club parking lot next to where I'm writing this in suburban Hong Kong is a Mercedes-Benz or a BMW or a Tesla sedan. Hong Kong loves its high-priced real estate, and its high-priced cars.
The two worlds converged on Wednesday after confirmation that Hong Kong has re-set its own record for the world's most-expensive parking space. A one-car lot at The Center fetched HK$7.6 million ($969,000). Rich people haven't apparently lost total faith in Hong Kong.
The Center is a 73-floor skyscraper that's also called the "Disco Building" due to its nightly light show. It became the world's most-expensive office building when it changed hands for $5.5 billion in 2018.
The car-park seller, warehouse and truck operator Johnny Cheung Shun-yee, told the South China Morning Post that he offloaded his fourth and final space in the building to a businessman he declined to identify, but who bought an office in The Center. "The buyer now needs a car-park lot," said Cheung, who is one of the 10 members of the consortium that bought The Center.
Bay B1-1023, the 135-square-foot car park space, works out at US$7,200 per square foot. It's three times the price of a normal apartment in the city, where the smallest "nanoflats" on sale are the same size as the car park space.
The exorbitant cost of housing is one of the factors fanning the flames of this summer's protests. Private apartments here are the least-affordable on the planet, according to Demographia. In a city of 7.4 million, 46% of the population lives in government rental or subsidized housing.
Hong Kong's leader, Lam, is a lame duck after five months of turmoil in the city over the summer. She's detested by the pro-democracy demonstrators, was heckled by lawmakers while attempting to quack through her "state of the union" policy address last week, and is unable to govern. Even the pro-Beijing forces hate her, since she hung them high and dry after they backed the extradition bill -- right up until she pulled it.
Afraid to appear in public, Lam is essentially ruling by exile in her own city, as I explained last week. But the Beijing government up to now has not allowed her to step down.
Lam recently told a meeting of executives that she would "quit" her post "if I have a choice," thanks to the "unforgivable havoc" she has unleashed on the city. She then denied she has ever asked Beijing officials to let her step down. That's legalese; she just hasn't officially handed in her resignation papers. Reuters caught her confessed desire to step down on a leaked tape.
The plan to replace her will go ahead if approved by Chinese President Xi Jinping, who has himself changed the rules in China so he can rule for as long as he wants. It would fit the pattern set by the resignation of former Hong Kong Chief Executive Tung Chee-hwa, the city's first post-colonial leader. Tung stepped down for "health reasons" after 500,000 people in 2003 marched against his administration's plan to introduce anti-sedition legislation. Tung was allowed to leave after a face-saving gap, in 2005.
The fact that Lam can't step down until Beijing lets her proves that Hong Kong does not actually govern itself at all. The chief executive is "elected" by a cabal of business leaders, hand-picked by Beijing to do its bidding. Still, this process is supposed to ensure that Hong Kong's political system functions with a "high degree of autonomy."
The new plan reveals Beijing's hand. The Communist Party is deciding who rules Hong Kong and for exactly how long. Though I don't see why Lam can't just resign if she really wants, my conspiracy-theory-loving wife insists her family would be under threat of death from Beijing if she did.
Beijing now plans to replace her by March, according to the FT's sources briefed on the plan, with an interim leader serving out the remainder of her term, which runs to 2022. The front-runners for this thankless task are Norman Chan, who is the former head of Hong Kong's central bank, the Monetary Authority, as well as the textile tycoon Henry Tang, who has served both as the No. 2 Chief Secretary and the city's financial secretary.
Chan was regarded as a firm hand on the city's financial tiller, which isn't that hard in a city that runs a perpetual budget surplus. Tang managed to pull off the unthinkable in 2012, and lose an election for the Hong Kong leadership that was rigged for him to win. It was the appointment of his opponent, C.Y. Leung, known as "The Fox" for his cunning and deceptive nature, that really started the downward spiral in Hong Kong's freedoms that has brought us where we are now.
Personally, I suspect that the insurance tycoon Bernard Chan will end up as the next "official" chief executive. Chan, the Hong Kong-born Thai-Chinese grandson of the founder of Bangkok Bank (BKKLY) , is the current convenor of Hong Kong's cabinet, the Executive Council. The Pomona College alumnus is glib and wily. He has made all the right pro-Beijing noises when commenting on Hong Kong's political chaos. Chan, who is currently president of the Hong Kong insurer Asia Financial Holdings HK:0662, basically denies that anything is wrong.
I expect that Lam will step down, Chan or Tang will serve out her term and that Chan will eventually take over. Lam's departure is not going to settle all the issues afflicting Hong Kong, which ultimately revolve around Beijing's increasingly heavy-handed interference in this free-market city.
But the death of this extradition bill, and her departure, are a good start.