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New Finance Expat’s Guide to Hong Kong

If you move to Hong Kong, the first thing that people will tell you is that Hong Kong is the most expensive city in the world and the salaries simply need to be that high in order for people to live.

Now this is sort of true but not really. In reality there is a bifurcated economy for rich people and another one for the Cantonese speaking proletariat. If you do not speak Chinese, you can only participate in the economy for rich people and it is expensive.

Renting in Hong Kong as a Finance Expat

This applies to everything except for rent. Rent is universally expensive to the point of being farcical. If you are an MD in Toronto you can probably live in a penthouse, no problem.

If you are an MD in Hong Kong you can probably get a 3 bedroom, 950 square foot place in a nice neighbourhood but a dilapidated building. Practically everyone lives in a disgusting shoebox at the analyst or associate level, with those that live in nicer establishments sacrificing a material amount of their monthly compensation.

Expect to pay HKD20,000 – HKD35,000 ($2,500 – $4,500) for a 1BR in the expat enclaves, with the quality varying greatly. Expat enclaves are areas that are close to a metro line that takes you directly to work in Central, Admiralty or West Kowloon with a reasonable English speaking service sector. You can go lower if you choose a more local neighbourhood or get roommates (which is frowned upon) and share a bathroom.

In this way, Hong Kong is similar to Manhattan – but the difference is that the poor people (i.e. not bankers and consultants) do not have a choice to live in the outskirts of Queens or the Bronx or Jersey. They all live in Hong Kong, and this means that all young people not in banking live with their parents until they are 40, or in unhygienic subdivided flats or take refuge in McDonalds.

This isn’t an attempt at humor, however, it’s a sad reflection of the craziest wealth inequality in the world. Despite above global pay in Hong Kong’s finance industry, the average Hong Konger makes HKD18,000 a month ($2,250) – with younger people making materially less. The price-to-income ratio for housing is the highest in the world.

There are various reasons why Hong Kong has a failed housing market in contrast to Singapore or Mainland China, but some of the recurring themes are that there is a real estate developer oligopoly that owns most of the land banks and restricts the land supply and certain green spaces are protected (in prime real estate land) because they have been politicized.

The Service Sector in Hong Kong for Expats

For expats, the first rule is that you need a Cantonese speaking friend. Hong Kong has a bizarre caste system where the top of the pyramid is English speaking (inclusive of the landed gentry Cantonese who speak English, although increasingly shifting to Mandarin) while the working class and the bureaucracy is Cantonese speaking.

Without delving into the intricacies of the school system, 90% of Hong Kongers do not speak English at a basic level. They also do not speak Mandarin, which makes them inefficient in a global city that serves Chinese capital markets.

As such, expats will avoid the local economy and shop at much more expensive supermarkets and eat and drink at much more expensive restaurants and bars.

The bigger problem is that for professional services such as banking, telecommunications and regulatory bodies, there is still nobody that speaks English at an acceptable level. Default communications will also be in traditional Chinese. Imagine an MD that gets regular SMS blasts in Chinese, banking emails from HSBC in Chinese, quarreling with some Securities and Futures Commission representative on the phone and she does not understand anything you are saying.

Somewhat ironically, Hong Kongers are very proud of using traditional Chinese as a writing system over the simplified version the Mainland Chinese use – however a significant percentage of Hong Kongers are illiterate or semi-literate and would be better served if they adopted simplified Chinese instead. This is evidenced by WhatsApp communications where they will opt to leave voice messages or write with homonyms.

That is Hong Kong every day, so if you have a commercial dispute be ready for a headache. This brings us back to you need to have a Cantonese speaking friend. Otherwise when you call your phone provider to dispute something they will have to scramble to find the one person in the office that speaks intermediate English.

As a result, an expat will have limited choices and will have to use HSBC or Standard Chartered as their banking provider notwithstanding HSBC’s awful service and risible fee culture.

Hong Kong culture is also broadly rude and curt, although this may be somewhat mitigated if you have the right skin tone.

Dining in Hong Kong as an Expat

Do you like Western food? Get ready to pay through the nose in Hong Kong. If you ask anyone about it, they will simply say because you are paying for the space or the view.

In reality the food is terrible and overpriced accordingly because there aren’t enough sophisticated palates to engender any competition.

That said the views are quite nice. Check out Skye, any bar at the Ritz Carlton, eyebar, Red Sugar at the Kerry Hotel and Shake Shack.

If you want a decent non-Asian meal, get ready to pay HKD2,000 per head before alcohol ($225). Otherwise you will end up paying HKD800 ($100) and getting a raw deal. Last week I ate at Otto di Mezzo 8 ½ Bombana. It was fantastic – Michelin 3 star, I believe. It was also HKD800 for their most basic lunch set with no alcohol.

Of course, the Cantonese, Southern Min, Japanese (Sushi, Izakaya, Ramen), Sichuan, Korean, and Indian food are all very good, but again you will need to know a foodie local with some sort of sophistication to take full advantage of this. You will also end up saving a lot of money this way.

Drinking in Hong Kong as an Expat

If you are drawn to the nightlife, expat haunts and the most popular clubs in Lan Kwai Fong can be massively detrimental to the wallet. Although a $20 cocktail is rare in Toronto, they are starting bids in Hong Kong. Eventually you get used to paying HKD300 for lame cocktails if you are part of that life.

However, for the underclass and exchange students from Germany, beers are HKD8 ($1) at 7-11.

Going on a junk boat party is mandatory. But only once.

Your Coworkers are a Little Dumber in Hong Kong

Hong Kong has a lot of money flowing through it. A large percentage of all capital raised for China is done through Hong Kong with a population of only 8 million and only 3 or 4 million real Hong Kongers with the HKSAR passports.

Since working visas are difficult to get for more basic jobs, the competition is weak and the money is great, so you end up having to deal with incompetent and entitled people on a more regular basis than in New York or London.

Being a major commercial hub, a large number of your local coworkers will have had a previous career as a flight attendant. Many of your coworkers will leave to pursue a career as a flight attendant.

Expect to proofread coworker emails for grammar.

ex investment banking associate

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