November 2019 | Volume 21 No. 1
A City Fuelled by Migrants
“Hong Kong has always been a city of immigrants,” says Professor YC Richard Wong, Chair of Economics and Philip Wong Kennedy Wong Professor in Political Economy, a description that still applies long after revolution and war sent hundreds of thousands of people scurrying into the city. The percentage of first-generation Mainland China immigrants who have arrived since the late 1970s currently totals nearly a quarter of Hong Kong’s population. When their offspring are included, it reaches nearly one third.
These immigrants have provided the only source of labour growth in Hong Kong in recent times, particularly immigrant women. Although they are less entrepreneurial than immigrants of the past, they have nonetheless been critical to the city’s economy because of the ageing population. “Without them, we would not have an adequate labour force,” he said.
It is a conclusion that could apply to much of Hong Kong’s modern history.
Professor Wong has been analysing census data dating to 1921 to track the impact of immigration on Hong Kong’s economic development. He has identified three waves and drawn parallels and comparisons between them to show the impact of each wave.
The first wave came before the Second World War, when people could traverse the Mainland border with relative ease. “There was a small local population, but most people were men who came from the Mainland, laboured here and went back to their hometown. The elites among them worked with British companies and set up local stores. That would be the beginning of the city,” he said.
Rapid growth with second wave
The second wave came in the 1940s and 1950s, after the end of the war and China’s 1949 revolution. From 1945 to 1951, Hong Kong’s population nearly quadrupled from about 600,000 to 2.3 million.
“Most of the arrivals came from Guangdong province, while a smaller group were from all over China. These were mostly businessmen and professionals who were sometimes euphemistically lumped together as ‘people from Shanghai’,” he said. “They brought a variety of skills – manufacturing, shipping, movie-making, banking – and they began to do business in Hong Kong with labour from workers who mostly had come from Guangdong province. This created rapid economic growth largely based on export-oriented manufactured goods.”
The demography of this group also differed from the first wave. Both men and women came, they were relatively young, and their average family sizes were large. As their children grew into young adults, they boosted Hong Kong’s industrial labour force of the 1960s and 1970s.
The third and current wave started with China’s opening in 1978. Initially, there was a rush of 300,000 new immigrants due to Hong Kong’s ‘touch base’ policy that allowed them to stay if they reached the city. The policy ended in 1980 and was followed by a more orderly daily quota for family renewal that started at 75 per day and later increased to 150. This quota has been filled largely through cross-border marriages.
“This third wave of immigrants has been heavily dominated by women who have relatively less schooling than the post-war generation. But they have subsequently become important for Hong Kong’s labour force,” Professor Wong said, filling jobs such as security guards, waitresses and gas station attendants, particularly in the New Territories. But many now occupy skilled and professional jobs.
China’s opening in 1978 has brought a steady flow of immigrants into Hong Kong. In 1996 they constituted 13.2 per cent of the population, 14.5 per cent of the labour force, and contributed 10.3 per cent of total earned income. By 2016, they were 22.3 per cent of the population, 23.8 per cent of the workforce, and producing 16.5 per cent of total earned income.
(Source: Hong Kong By-Census Sample Datasets)
Part of Hong Kong’s fabric
The youthfulness and labour participation rate of recent immigrants set them apart from local residents. Between 1996 and 2016, 43 per cent of recent immigrants were of the prime working age of 25–44 against only 26 per cent of the non-immigrant population. And 55.6 per cent were participating in the labour force, against 51.3 per cent among the rest of the population.
“If we had not had a constant stream of recent immigrants, the ratio of elderly to working age population would have been even worse and our economic performance would have been more challenging,” Professor Wong said.
He draws comparisons with Japan. In 2015, about 22 per cent of Hong Kong’s working age population was elderly (65 or above). When Japan reached this level in 1995, it coincided with the onset of economic stagnation that has persisted to this day.
“The two events are not coincidental but in fact intimately related. Today, Japan’s elderly population is 47 per cent of its working age population. By 2030, Hong Kong will reach this stage.” The answer, he believes, is to continue to look to immigrants to sustain Hong Kong’s labour force and to consider ways of scaling up efforts to attract quality immigrants. And to remember that immigrants are part of Hong Kong’s fabric.
“Very often politicians complain about this third wave as competing for public resources. But the important thing to remember is that they are members of a household in which overwhelmingly one of the members is local. They have migrated here for family reunion,” he said.
If we had not had a constant stream of recent immigrants, the ratio of elderly to working age population would have been even worse and our economic performance would have been more challenging.
PROFESSOR YC RICHARD WONG