You may not know his name but you’ve probably heard of his company, Centaline Property Agency. You may have read his newspaper too – AM730, the city’s ‘third’ free newspaper. But, for those who haven’t had the pleasure, meet Shih Wing-ching, one of Hong Kong’s biggest property vendors – and one of its biggest personalities.
Born in Shanghai in 1949, Shih immigrated to Hong Kong at the age of three years old. He graduated from Form 5 in 1969 and joined the workers’ movement. In 1978, he founded Centaline with his partner, a business which has grown ever since. It would be difficult to find anyone else in town who knows more about Hong Kong’s land and property market than Shih. But when specialists are warning Hongkongers about the possibility of a ‘property bubble’, Shih sees the picture in a different light.
“We are nowhere near a property bubble,” he tells Time Out. “Hong Kong’s property market is the healthiest in the world!” he adds, seemingly ignoring the ever-rising prices in the city. According to Shih, about 60 percent of homeowners have paid off their mortgages and there aren’t many property speculators around. “You only get a bubble when properties are over-built,” he claims. “But here the vacancy rate is only about 4.3 percent. It is actually very low. And demand is larger than the supply.”
Shih thinks it’s natural for property prices to keep rising. “Most of the man-made products will depreciate over time,” he says. “Only land is eternal – and reflects the productivity of those living on it. When the economy grows, prices grow accordingly. This is why I like to do property business. The city’s rising prices are the result of a fast growing economy.”
Although Shih admits that Hong Kong has a ‘high land price environment’, where the government controls supply and only sells a limited amount of land each year, he believes it does so to make Hongkongers happy. “To Hong Kong people, property means profits,” he says. “No homeowner likes to see prices decrease. And 52 percent of families here own properties. Tung Chee-hwa crushed the market pretty successfully – and look at what he ended up with. Half a million people took to the streets and brought him down. It’s all people’s choice. Sometimes they choose wrong but will correct themselves. It’s people who make the decisions.”
What Shih says seems to ring true. However the reality is that prices are rising so fast that many people can’t afford to buy a home. And, if this situation continues, private properties could just become luxury purchases in the future, with only the rich having enough cash to buy one. While the poorest people can live in public housing, what about those sandwiched in between? To Shih, there is only one answer. It depends on whether the distribution of wealth is fair. Though the days when the 63-year-old was poor and fighting for workers’ rights are long gone, some of the Marxist ideology he took on board in his youth is clearly still in his mind. “I advocate a free market,” he says. “But, in terms of distribution, I’m a Marxist.”
According to Shih, companies which distribute profits come under the banner of ‘first distribution’, and the government’s public spending comes under ‘second distribution’. He doesn’t appreciate an over-reliance on this ‘second distribution’ and believes a fair ‘first distribution’ will solve our social problems. “Currently the first distribution is extremely unfair in Hong Kong,” he says. “Companies only distribute profits among shareholders, so capitals are only accumulated in a few people’s hands. These people can’t use all that wealth to consume, so they use it to gamble in the financial market, while common people have no money to consume in real markets. The result is the financial market becoming way larger than the real economy. It can block the progress of the society and cause social crisis.”
In Shih’s world, companies shouldn’t only give out profits to shareholders but also to workers who ‘invest their effort and creativity to add value’. “A free market should be built on the grounds of secured property rights,” he argues. “The workers produce but the rights to their productions are deprived by employers. How is the system fair?”
Shih’s idea sounds almost utopian. But he doesn’t think he’s an idealist. “I’m practising this in my companies,” he says. His distribution system is simple – a third of the profits go to the employees, a third to shareholders and the rest is reinvested in the companies. “If I run my companies better than others by doing this, others will follow. If they don’t, I’ll kick them out,” he laughs.
It will be interesting to see the day come when Shih Wing-ching kicks companies out who don’t fit his worker-empowerment model but, until then, even for the property vendor himself, there’s probably still a long way to go.