Unrest in Hong Kong has economic roots

[HONG KONG] Hong Kong's struggle for democratic rights promised by China has erupted into the streets in recent days. But although this is a political battle, part of the reason Hong Kong is fighting so hard for its freedom is that it has already seen what being subsumed by the mainland means economically. And it's had enough of that.

China's rise hasn't just lifted hundreds of millions of people out of poverty. It has also transformed the economic balance of power with Hong Kong. The latter's economy is 3 per cent the size of China's today, compared with 18 per cent when Britain handed over the city in 1997. All this growth in China has created a new class of mainlanders who want, and can afford, the very best Hong Kong has to offer.

That means apartments, luxury goods and even baby formula. It's all about status, prices and trust. There is no better way for mainlanders to show they've really made it than to buy property in Hong Kong. The real estate appetite of wealthy mainlanders happy to pay in cash has contributed to a doubling of Hong Kong property prices since 2009. As a point of comparison, prices had, in total, increased 26 per cent in the 16 years before that.