In a city such as Hong Kong, known for high property prices, dense living, and even cage homes, wide-open spaces do not easily come to mind. Yet in 2020, China Evergrande Group paid US$ 541 million to turn farmland at Wo Shang Wai into luxury single-unit homes. At its centre would be a palatial home measuring 240,000 sq ft. For perspective, that villa would be larger than 180 blue-chip middle-class homes in Tai Koo Shing (Li and Liu, 2021), sixteen times bigger than homes found at the colloquially named ‘tycoon village’ on Shek O Road, or as large as the entire residential complex of the city’s Chief Executive (tennis courts, pools, gardens, security offices included). Plans include the allocation of nine living rooms, a kitchen for Chinese cuisine, a kitchen for Western cuisine, and just two bedrooms.
The northwest New Territories, where the project was planned to be built, has gained further attention as the focus of government development for the coming decades. The 2021 policy address by the city’s leader has earmarked the northwestern region of the city as a new Northern Metropolis, where Hong Kong’s urban living would be closer and more enmeshed with the economic opportunities of neighbouring Shenzhen as part of connecting Hong Kong to the Greater Bay Area cluster of cities along the Pearl River Delta. Underutilised land would be turned into a robust regional conduit for life, work, and travel, as the logic goes.
Evergrande would seem to be a promising candidate to plan and articulate such ambitious visions. The firm already had a wide portfolio of property development across China and many ambitious flagship projects ready for investment and construction (Liang, 2022). Evergrande, with its experience, capital, and ambitions, fit perfectly in the growing trend of Asian urbanism – projects that appealed to the economic and aesthetic aspirations of the city because of extensive experience, financial resources, and marketing attractive to the needs of Asian markets. This emphasis on local processes echoes scholarship that has highlighted the need to identify political and economic contexts in city-making separate from Anglo-American experiences (Shin et al., 2020).
Ironically, the developer’s announcement of such grand plans was followed within a year of its announcement by its financial collapse. The company had grown fast in previous years because they took out loans for new projects with unfinished projects as collateral, knowing that the increase in prices of their unfinished projects would yield far more profit once completed. However, slowing increases in housing prices meant that Evergrande had taken too many loans to properly pay down, leaving many projects yet unfinished. Evergrande has lost many flagship projects with similarly audacious plans across China, from Crystal City in Hangzhou to Ocean Flower Island in Hainan (Liang, 2022). The developer saw its plot seized by American distressed capital investment firm Oaktree Capital after failing to find buyers for the plot (Bloomberg and staff reporter, 2022). The failure to find buyers despite pronouncements on the integral role of the region in the city’s future has shown the limits of the speculative optimism behind urban projects. Despite the speculative ardour behind its investment, with its land plot seized, the style and scale of Evergrande’s dreams at Wo Shang Wai will not be built.
With the magnitude larger than regular apartment flats and even the homes of Hong Kong’s elites, plans to build a private palace are not only categorically unequal but reckless. The project was ridiculous because it spent vast sums on proposals that could not cater to the needs of regular residents nor the actual tastes of tycoons and elites. The project was ridiculous because it could not cater to the needs of ordinary residents nor the actual tastes of tycoons and elites. Understanding the origins of such recklessness requires understanding the local context. Hong Kong does not merely commodify land and property; the transformation of properties into financial assets has been key to its societal development and to fulfilling popular expectations of progress, while the revenues from controlling the land supply have been a major part of the government’s revenue. These features have been described by Haila (2000) as their own category of a ‘property state.’
Much of this context can be explained by the historical experiences of Hong Kong in managing and arriving at its economic success. Much of the city’s economic success after manufacturing was moved to mainland China did not come simply from being a professional services and logistics hub for South China. A key element of the local economy came from the creation of an expensive and speculative property marking that absorbed the incoming wealth brought by investors keen to access the Chinese market through Hong Kong’s services and logistics centres (Jessop and Sum, 2000). That experience is made more significant by the way it has established expectations for future economic growth and the methods taken to achieve it. For example, homeownership is not only seen as a culturally engrained aspiration but has also become the financial asset most people use to interact with the accumulated wealth of the city, meaning that the coalition favouring speculative development comes from grassroots middle-class residents as well as business and political elites (Wah, 2000).
However, it is vital to go further to explain the audacity of the project. To buckle popular and market expectations of development requires more than just the general openness of the city to speculation and global finance. In a description taken from cryptocurrency speculation, the over-the-top project at Wo Shang Wai demonstrates the concept of ‘magical capitalism’ (Lee, 2022). Observations about the tendency of Hong Kong residents to believe strongly that homeownership and property speculation are rational aspects of societal development cannot fully explain Evergrande’s project. The seemingly outrageously luxurious and irrational design of the palatial home can be understood in part as a ‘reflexive response to the magical mechanisms’ of a speculative market (ibid.: 98).
Therefore, while the project to build a complex at Wo Shang Wai shows us that Asian urbanism has profound impacts on the development of opportunities shaping urban spaces, there needs to be a fundamental scepticism against the assumptions about claims of success. The model has worked for the property state, and speculation and financialization of the same land used to build homes and urban lives continue to generate profits and international attention. Amid the current era of globalization, adapting local conditions to capture international wealth and prestige continues to be a convincing method of development despite its serious flaws. Paying attention instead to the actual economic and political conditions would serve analysts well, whether in an Asian city like Hong Kong or other regions of the world not sufficiently explained by studies of the Anglosphere.
References
Haila, A. (2000) ‘Real Estate in Global Cities: Singapore and Hong Kong as Property States.’ Urban Studies 37(12): 2241–2256.
Jessop, B. and Sum, N.-L. (2000) ‘An Entrepreneurial City in Action: Hong Kong’s Emerging Strategies in and for (Inter)Urban Competition.’ Urban Studies 37(12): 2287–2313.
Lee, S.C. (2022) ‘Magical capitalism, gambler subjects: South Korea’s bitcoin investment frenzy.’ Cultural Studies 36(1): 96–119.
Shin, H.B., Zhao, Y. and Koh, S.Y. (2020) ‘Whither progressive urban futures? Critical reflections on the politics of temporality in Asia.’ City 24(1–2): 244–254.
Wah, C.K. (2000) ‘Prosperity or Inequality: Deconstructing the Myth of Home Ownership in Hong Kong.’ Housing Studies 15(1): 28–43.
About the author
Victor Meng has recently graduated from the MSc in International and Asian History programme at the London School of Economics and Political Science. He is training to be a teacher of history in Hong Kong. His research interests include the impact of transnational processes on identities and societies and the history of Chinese port cities in the early twentieth century.
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