Shenzhen, a blueprint for Chinese cities, must abandon Hong Kong's property model, warns China's 'godfather of real estate' Meng Xiaosu

By Martin Choi martin.choi@scmp.com / https://www.scmp.com/business/article/3026090/shenzhen-blueprint-chinese-cities-must-abandon-hong-kongs-property-model?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 11, 2019 11:57 AM SGT
The southern city of Shenzhen, now a blueprint for China's urban development, should abandon the Hong Kong property model it borrowed decades ago, warned the country's "godfather of real estate".
Meng Xiaosu, who spearheaded China's property reform policies in the 1990s, said Shenzhen and other cities in the Greater Bay Area should learn from the pitfalls of Hong Kong's market, which he said included cramped conditions, wealth inequality and a chronic shortage of land for development.
"Hong Kong's economic inequality and disparity has not lessened but in fact has continued to grow in recent years, surpassing many countries and regions. The outlook for the youth in the city is bleak," said Meng.
"From our perspective, a core reason is that the [Hong Kong] government has neglected the need to provide suitable housing conditions for its citizens, making living conditions harsh in the city."
His stark warning comes after Shenzhen has been labelled by the central government as a new special economic zone to carry out bolder reforms as a model for other Chinese cities.
Beijing unveiled a detailed plan earlier in August, calling for wide-ranging reforms to be implemented in Shenzhen that will make the southern coastal city a leader in terms of innovation, public services and environmental protection by 2025.
The government of Shenzhen " one of the early leaders in the development of private property " borrowed a key idea from Hong Kong: selling land-use rights to developers through auctions.
Shenzhen held its first land auction in 1987, pioneering the sale of land-use rights in mainland China.
But now, with rising wealth inequality one of the many gripes of angry protestors who have taken to the streets of Hong Kong in recent months, Meng has called for major cities to stop following the model. Many blame the city's notoriously high property prices " the result of a serious land shortage " for the rising gulf between the haves and the have-nots.
"Now we have seen the pitfalls of the Hong Kong model," said Meng. "Many of China's larger cities today are cramped and suffer from...