Professor Stuart Gietel-Basten’s talk at The 6th International Conference of Social Policy and Governance Innovation - GBA not a cure-all for Hong Kong’s demographic problems


Professor Stuart Gietel-Basten


In his keynote address, Professor Stuart Gietel-Basten of the Hong Kong University of Science and Technology set out a demographer’s perspective on policy innovation in the Greater Bay Area (GBA).


Though he noted that it was difficult to obtain reliable figures for Guangdong Province, Professor Gietel-Basten believed he was on very solid ground when he said the GBA, which includes Hong Kong and Macau, is characterised by a low fertility rate and high life expectancy. The two causes of the low birth rate that he focused on in his presentation, were labour market frictions and the shortage of affordable housing.


While one million yuan will buy you approximately 90 square metres of living space in Huizhou, it is only sufficient for a fifth of that area in Shenzhen, and under seven square metres in Hong Kong. These sort of property prices are leading young people to stay at home longer and delay family formation even when they do move into a place of their own.


In his 2000 policy address, the then Hong Kong Chief Executive Tung Chee Hwa set a goal of 60 percent of secondary school students going on to tertiary education within 10 years. By the academic year 2015-16, 70 percent were achieving this target. But a mismatch between the qualifications of graduates and the skills required in the labour market, as well as declining salaries and limited opportunities, have left many young people frustrated and anxious. “Graduates don’t necessarily want to work in retail or tourism, but these are the jobs that have to be filled,” Professor Gietel-Basten noted.


He then went on to outline a number of the rational policy ideas that had been pursued, or advocated, to tackle these demographic problems.


One idea to alleviate local housing issues is to encourage people who work in Hong Kong to live in other parts of the Greater Bay Area, where property prices are lower. Even so, in Guangdong the buying process is less transparent and there are greater legal risks which, taken together, make it difficult to live a trans-border existence.


Other policies, such as internship schemes, have been introduced throughout the GBA to promote labour migration. However, Professor Gietel-Basten pointed out, on the Mainland, Hong Kong graduates would be competing with the, around eight million, young people leaving university there every year. And that’s before the personal feelings and attitudes of young Hongkongers to relocating across the border are considered.


Currently, he noted, the SAR is unprepared for the consequences of having a rapidly ageing population. “There is no real plan to manage long term care in Hong Kong.”


Guangdong, since 2013, and Fujian, since 2018, have run Portable Comprehensive Social Security Assistance Schemes, which allow Hong Kong’s elderly, with a number of restrictions, to retire in these provinces. A number of care homes, and special residential developments, for the elderly have also been launched in Guangdong, which are cheaper than those available in Hong Kong. But while accommodation costs can be lower, medical bills can outweigh any savings.


It has to accepted, he said, that at the moment the two systems that prevail in the one country are not always complementary. “We can’t pretend there isn’t a border. We can’t pretend that buying a house in one place is the same as buying a house in another. We can’t pretend that getting sick in one place doesn’t have different consequences to getting sick in another.”


And this is just at an institutional level. When cultural issues and personal attitudes are considered it makes it even more of a stretch to suggest the GBA is some sort of silver bullet to solve Hong Kong’s demographic problems. Instead questions such as, why is housing so unaffordable, and why is fertility so low, need to be addressed locally. “Why is it we have one of the highest childlessness rates in the world but according to the surveys, very few people want to be childless,” he wondered.


Similarly with the jobs market, instead of desperately using more and more elaborate ways to find graduates a job, Professor Gietel-Basten suggested Hong Kong might need to look at its education system and consider what it wants the large number of graduates being produced to achieve, and whether the skills they are being equipped with are appropriate for the prevailing labour market.