March 26th, 2012
01:10 PM GMT
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Hong Kong, China (CNN) – After a divisive and fiery campaign season, Hong Kong has a new chief executive. His name is Chun-ying Leung, or C.Y, for short. He’s a 57-year old pro-Beijing politician who made his multi-millions in Hong Kong property.

But the city native inherits the leadership mantle as his hometown faces a series of unenviable economic challenges. And it’s not just Hong Kong’s financial problems he has to address - it’s also his own popularity problems. More precisely, lack thereof.

On Sunday, Leung could be seen giving the thumbs-up for victory in Sunday’s fourth chief executive election. But he’s gotten a thumbs-down in approval. The Hong Kong Standard, a local newspaper, said Leung only mustered a 40% approval rating. Compare that to the 70% rating of the two previous chief executives.

To change that, Leung said he would address a swath of economic woes after he takes over in July.

“On economic and political polices, I will consult widely on measures to tackle the deep-rooted problems on uneven distribution of income, inflation, housing, medical services, education and political reform," he said. "I stress we do not need major reforms - just a government that is proactive and introduces change while maintaining stability."

So Leung says Hong Kong doesn’t need major reforms - but there are major economic issues that loom long and large over the island.

The first is Hong Kong’s growth, or in this case potential contraction for this first quarter of 2012. In January, Hong Kong data showed both imports and exports fell for the first time in two years. Europe’s debt crisis and slower demand from the continent are partly to blame. Leung is at the mercy of weak overseas demand in a time of sluggish global growth.

Hong Kong’s income gap is another issue. Civic Exchange, a Hong Kong think tank, says it’s the widest of all countries in the OECD, the Organization for Economic Cooperation and Development. The city’s GINI coefficient, a measure of wealth disparity, is higher than that of Japan, the United Kingdom and the United States. It edges out Mexico by a hair.

And any Hong Kong resident can tell you that home prices are just ridiculous, notching up as some of the most expensive in the world per square foot. Leung has said he’ll aim to build more low-income housing to increase market supply and affordability.

That would help boost his popularity among low- to middle-income earners. But would that hurt the big-name developers that have the money as well as the political clout? Based on their share price reaction on Monday, it seems not.

Cheung Kong Holdings, owned by Asia’s richest man Li Ka-shing, rose nearly 2.5%. Henderson Land jumped nearly as much. Sun Hung Kai managed about a quarter of a percent gain too.

That follows Citibank’s earlier research note from this morning that said Leung’s property strategy isn’t that much different from the outgoing administration’s.

Also, one Citic Securities analyst told me the city’s high-end property prices will really continue to depend on mainland Chinese buyers - and not so much on what Leung could or would do.

So Hong Kong’s new chief executive-elect has his work cut out for him, to keep Hong Kong from falling into recession and to pull his own approval numbers up.

He’s got the next five years to try.

soundoff (9 Responses)
  1. Anon_C

    HK is, at this point, a dump. It will continue to be a dump until human and environmental interests trump financial interests, an event that will probably never happen since those interests are held by those with political power. It does not help that its financial situation is sandwiched between the US and mainland China, either. Almost anyone in the know is wary of Leung, just as they were wary of Tang. Neither of these men, likely Beijing puppets, would have been a victory for this nation/city/business that is HK. Yes, I call it a business. Why else would you have a CEO at your head? I can only hope that I am being overly pessimistic here and that the quality of life in HK might actually improve. Now excuse me while I continue to be deafened by the absurd noise pollution and die from the mass air pollution.

    March 27, 2012 at 6:48 am |
  2. Wayan Chan

    Not all parts of Hong Kong are polluted or noisy. See for example Park Island which is a nice clean to live and very peaceful too.

    March 27, 2012 at 4:40 pm |
  3. Mara

    Yes, Park Island may be nice, but it is a rare example of sustainable living in Hong Kong. Much of HK is becoming a dump, just as Anon-C has noted. The mentality is so short term there, money, money, money, that in the long them they may harm themselves as countries like Singapore become more appealing. Less than 1% of people live in HK live like those on Park Island, that is the reality of Hong Kong life.

    March 28, 2012 at 5:14 am |
  4. sameh

    You will not believe what is happening in the stadium during the match

    March 30, 2012 at 11:24 pm |
  5. Alejandro

    video limits are the same round the world. They will not prcuode different video times for different areas. Not economicalIf the EU imposes a strict limit on vid, then that will be the limit for all cameras world wide, such as the Canon 5/7Ds

    May 15, 2012 at 6:31 am |
  6. icon pack

    Ideal variant

    September 22, 2012 at 1:55 am |
  7. icon archive

    Let's talk.


    September 24, 2012 at 12:16 am |

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