Young Hong Kongers Who Defied Xi Are Now Partying in China









Bloomberg News
Sun, March 3, 2024

(Bloomberg) -- In 2019, Leung joined a Hong Kong movement to boycott Chinese-owned restaurants like many protesters opposing President Xi Jinping’s encroachment of the former British colony. Now she and her peers regularly go out of their way to the neighboring mainland city of Shenzhen for cheap food and massages.

“Hong Kong used to have freedom,” said Leung, who asked to use only her last name because she joined what authorities deem as illegal protests. “Now it’s lost all that. So why wouldn’t I go to mainland China, where at least things are cheaper?”

Xi’s efforts to crush dissent in Hong Kong have weakened its distinct identity from China and instilled a new sense of political apathy. In the wake of the crackdown, many disillusioned residents left for democracies such as the UK, where more than 180,000 Hong Kongers have applied for a visa that provides a pathway to citizenship since 2021. For those who stayed, some have set aside their ideals and embraced a new cross-border lifestyle they once rejected.

Travel to the mainland has been made more compelling by new infrastructure that cut travel times in half between the cities, a booming array of entertainment choices and low prices further driven down by China’s longest deflation streak since the Asian financial crisis. In February, Hong Kongers’ trips to Shenzhen hit a new high for that month since records began in 1984, packing the city’s subway trains and filling a new Costco Wholesale Corp. store.

That’s a boon for Xi’s efforts to integrate Hong Kong with Shenzhen and nearby cities into a region called the Greater Bay Area, which Beijing hopes will challenge the Silicon Valley in terms of innovation and economic output.

“It will certainly be viewed as an improvement of the Greater Bay Area integration,” said Dongshu Liu, an assistant professor specializing in Chinese politics at the City University of Hong Kong.

But he added the integration could raise questions about the city’s identity: “If Hong Kong is moving closer with mainland China and becomes another mainland Chinese city, then what is the unique value of Hong Kong?”

Stephen Roach, the former Morgan Stanley Asia Ltd. chair who caused a heated debate last month arguing “Hong Kong is over,” said the city risks playing second fiddle to Shenzhen in Xi’s plan.

“Hong Kong is at risk of getting marginalized,” Roach told Bloomberg TV. “It still has the talent, the institutional heritage, the rule of law, and you hope that all of that remains enduring features of Hong Kong in the years ahead. But many are asking questions about those very attributes.”

The Shenzhen frenzy dovetails with Hong Kong residents’ growing willingness to work and live in mainland China. A survey of people under 40 in the city by the Hong Kong-Guangdong Youth Association conducted last year found 66% of them are now open to employment across the border, tripling from 22% in 2020.

The increasing connectedness is changing the business landscape and social fabric of both cities, creating new winners and losers.

Cantonese-speaking travelers from Hong Kong now crowd Shenzhen shopping malls every weekend. Locals in the mainland city lament long lines at spicy fish and dim sum joints.

On holidays, Hong Kong shoppers account for as much as half of all customers at Link CentralWalk, a stylish mall next to Shenzhen’s high-speed railway station that’s a 20-minute ride from Hong Kong, said a company spokesperson. About one in three moviegoers at a cinema in that same area come from Hong Kong, Now TV reported.

“Shenzhen is cheaper and has everything,” said Kit, who works in the restaurant industry in Hong Kong and goes to Shenzhen to sing karaoke with friends. Like most others interviewed in the mainland city, Kit requested to use only part of his name for privacy reasons. “Hong Kong is my home but it’s too expensive.”

It’s a stunning reversal from just ten years ago, when a surge in mainland Chinese tourists in Hong Kong spurred raucous demonstrations and complaints of overcrowding.

This is all happening while mainland tourism to Hong Kong has failed to recover from pre-pandemic levels, prompting calls from some politicians and economists in the city to levy a tax on departing Hong Kongers to protect local retailers and restaurants. More than 1.2 million mainland residents came to Hong Kong over their eight-day New Year holiday starting Feb. 10, down from 1.4 million during 2019’s weeklong break.

“Hong Kong’s economy is suffering this way,” said Junhua Zhang, senior associate of the European Institute for Asian Studies. The growing integration of Hong Kong opens a new market for Shenzhen businesses at the expense of the Asian financial hub, he said. “That is the dark side of the Greater Bay Area scheme. The trend is in favor of mainland China.”

Tourists from Hong Kong are set to spend as much as HK$84 billion ($10.7 billion) in Shenzhen and the rest of Guangdong province this year, according to an estimate by Gary Ng, senior economist at Natixis SA. That’s about 14% of Hong Kong’s revenue from retail sales, catering services and hospitality.

For Shenzhen, the more affluent travelers pouring in provide a much needed lifeline after a pandemic slump. In a work report in January, the city’s government called the cross-border shopping trend a “new bright spot,” contributing to the city’s 7.8% retail growth last year to an all-time high of 1.05 trillion yuan ($146 billion).

Hong Kong leader John Lee, who has pushed to accelerate the city’s integration in the Greater Bay Area, has described the shopping trend as a win-win situation for both cities. His office declined to comment but referred to remarks he made on Feb. 23 about plans to attract more mainland tourists.

Newly completed infrastructure projects have brought the two cities closer together. At the peak of the recent Lunar New Year travel season on Feb. 12, one in four Hong Kong residents who went to the mainland and Macau by land or sea did so taking high-speed trains or using a new $15 billion Hong Kong-Zhuhai-Macao Bridge. Growing demand may bolster the government’s case for a new cross-border railway linking northwestern Hong Kong to Shenzhen’s Qianhai economic zone.

Shenzhen seems to have something for every Hong Konger. Once a fishing village, the tech hub is dotted with massive modern malls, bustling night markets and hip cultural parks preserved from old factory buildings. Warehouse-style supermarkets like Walmart Inc.’s Sam’s Club retail stores are a magnet to residents from Hong Kong, where average monthly rent in prime shopping districts is almost eight times as expensive as in Shenzhen’s.

The appeal of Chinese brands goes beyond the mainland’s borders. Just as Hong Kongers are flocking to the north for cheap products and a good time, Chinese consumer companies are making inroads in the city and challenging local and Western brands.

Budget beverage choices like Mixue ice tea and Cotti coffee are winning over the city’s Starbucks-chugging office workers during a time of layoffs and bonus cuts. The KeeTa food delivery app, operated by Beijing-based Meituan, quickly gained market share from local rivals Deliveroo Plc and Delivery Hero SE’s Foodpanda.

In 2023, four out of the top ten most-downloaded apps on Apple Inc.’s Hong Kong App Store were Chinese apps, including TikTok-twin Douyin, Instagram-like Xiaohongshu and KeeTa, according to Sensor Tower data.

These growing ties add to the already intertwined economies and financial markets between Hong Kong and mainland China, and underscore a shift in economic power.

Ryan Yip, a 25-year-old who grew up in Hong Kong, could attest to the mainland’s pull.

Lured by cheaper prices in Shenzhen, Yip moved across the border into a bigger apartment in November and now has a 1.5-hour commute to work in the Central business district on Hong Kong island. The research associate at a financial firm laments the shrinking space for speech in his former home, but doesn’t believe politics should get in the way of a good life.

“People may oppose the central government or have concerns about political freedom, but how does these concerns affect your everyday life? The truth is that it doesn’t,” he said.

Feng, a taxi driver who’s lived in Shenzhen for two decades, witnessed the dramatic change in mindset first-hand.

“Hong Kongers used to look down at Shenzhen,” he said. “It looks like the situation has reversed.”

--With assistance from Shirley Zhao, Allen K Wan, Zheping Huang, Rachel Yeo, Venus Feng, Jinshan Hong and Aria Chen.

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