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    Sep 02, 2015

    China's property buying spree in HK


    THE Chinese government has spent at least US$70 million (S$98 million) buying Hong Kong properties over the past year, official records show. Beijing is expanding its presence, especially after mass democracy protests raised tensions in the semi-autonomous Chinese city.

    Three sources said the move reflected Beijing's desire to tighten its grip on Hong Kong, after the youth-led "Occupy Central" movement at the end of last year rejected a political reform proposal from Beijing.

    "They're very concerned," said a Hong Kong delegate to China's Parliament, the National People's Congress, who meets with the staff of the Liaison Office, Beijing's main representative in Hong Kong.

    "I think it's natural for them to expand... They feel they have to try harder, most definitely."

    The Liaison Office declined to comment on the purchases, which seemed to be made to house staff. It is not confirmed whether it has increased the size of its staff in Hong Kong.

    According to Hong Kong's Basic Law, its mini-Constitution, there is no legal restriction against the Liaison Office buying property.

    Since December, the office has paid more than US$70 million for at least 62 new apartments, according to a Reuters review of more than 500 land registry records.

    The Liaison Office, set up in 1999, owns a sizeable real estate portfolio in Hong Kong.

    Reuters calculations suggest the Liaison Office has spent around HK$3 billion on properties, including an ocean-front clubhouse, offices in six locations and at least 490 apartments.

    Around a quarter of that sum was spent after 2012.

    The role of the Liaison Office and its operations in Hong Kong are little known, and it does not publish information on the size of its staff, its budget or property holdings.

    A former employee of the Liaison Office told Reuters that the latest moves were a "re-allocation of its offices and dormitories" rather than an outright expansion.

    A third source said there has been a "conspicuous increase" in Liaison Office staff carrying out youth outreach work and grassroots patriotic initiatives since the mass protests, in a bid to cool the democratic fervour of local youth.