South China Morning Post: Can Hong Kong deliver on 2049 target to wipe out subdivided flats and ‘cage homes’? Resident says ‘I will probably die in one of them’

Illustration: Adolfo Arranz.

To mark World News Day on September 28, 2022, the World News Day campaign is sharing stories that have had a significant social impact. This particular story by Fiona Sun (Edited by Emily Tsang and Alan John) with visual storytelling by Adolfo Arranz, Marcelo Duhalde, Kaliz Lee, Han Huang and Dennis Wong — was shared by the South China Morning Post (Hong Kong).

In the last of a three-part series on Hong Kong’s subdivided flats, Fiona Sun looks at the alternatives for tenants, their prospects for better accommodation, and what the government needs to do to achieve Beijing’s target of getting rid of such housing by 2049.

Cindy Lu finally put her days of living in a tiny subdivided space behind her, after waiting 10 long years. 

The housewife, 37, moved into a public rental flat in Kwai Shing East last October with her husband, 39, two daughters aged 14 and 11, and two-year-old son. 

Their 450 sq ft flat has a living room and three bedrooms, and the monthly rent is about HK$2,500 (US$320). 

“ Finally I don’t have to worry about rats and cockroaches or the ceiling leaking on rainy days. Nor need I fear rent increases or being kicked out at any time,” she says. 

Before this, the family paid HK$4,200 a month to squeeze into a 100 sq ft subdivided unit in Kwai Chung. It seemed even smaller during the coronavirus pandemic, when all five were at home. 

The family had only known living in similar tiny spaces, because they could not afford better on her husband’s income of about HK$10,000 a month as a construction worker. 

Public rental housing was their only hope of better living conditions and they applied in 2011, only to wait a decade before the good news finally arrived last year. 

“The wait and struggle seemed endless,” Lu says. “But now I’m looking forward to a stable and secure life. It finally feels like a home.” 

More than 220,000 people live in about 110,000 subdivided units, Hong Kong’s smallest and most substandard housing, and many long for better accommodation. 

According to a report released by the Transport and Housing Bureau in March last year, nearly half of households in subdivided flats had applied for public rental housing. 

A survey by the Hong Kong Council of Social Service between June 2020 and January last year found that about seven in 10 of the 2,108 respondents living in subdivided flats had no idea how long they would remain in such housing. The rest expected to stay for about four years on average. 

Long wait to move out 

Social workers and experts say that skyrocketing private home prices and rents, the severe shortage of affordable public housing, and insufficient government and social support have left many unable to get out of substandard living conditions. 

For many, public rental housing is their only shot at anything better, but the wait can be agonisingly long.

Hong Kong had 844,078 public rental flats at the end of March this year, housing about 2.2 million people. 

As of March this year, there were about 147,500 general applications for public rental housing from family and elderly one-person applicants, with an average waiting time of 6.1 years. 

Further back in the queue were another 97,700 non-elderly one-person applicants, many of whom have been waiting decades. 

“I have grown older in these tiny units. I will probably die in one of them,” says Jane*, 47, who has lived in subdivided units for about 30 years. 

The single woman, a clerk, left her parents’ public rental flat at 18 and has moved about eight times over the years, whenever landlords sold the property or raised the rent. 

On her salary of HK$10,000 a month, this is all she can afford, even as rents have crept up and her living space has shrunk. She started out paying HK$2,000 a month for a 200 sq ft unit, but now pays HK$4,200 for less than 100 sq ft in Sham Shui Po. 

Her current place has room for only a single bed, table and fridge, but she worries her landlord may raise the rent and she will have to move again. 

Jane applied for a public rental flat in 2005 but has no idea if one will ever come her way. The endless waiting has left her feeling helpless and depressed. 

New moves to ease housing woes 

Social workers have long urged the authorities to build more public rental flats to meet the demand. 

“Some residents have waited so long that they grew old and gave up, waiting for death in their subdivided units,” says Sze Lai-shan, deputy director of the Society for Community Organisation (SoCO). 

Outgoing Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor said last October that the government had identified about 350 hectares to build about 330,000 public housing units over the next decade, exceeding demand. 

She said another 5,000 units would be added to the overall supply of transitional housing, making a total of 20,000 units in coming years for people living in poor conditions while waiting for public rental flats. 

As of May, there were 4,484 transitional housing units with about 6,000 occupants. 

The government has also subsidised NGOs to rent suitable hotels and guest houses to use as transitional housing. As of April, it had approved five NGOs to provide 730 units and about 450 have already been occupied by about 570 people.

SoCO has provided about 300 transitional housing units, including hotel rooms and private flats, for about 700 people, who pay HK$2,000 to HK$6,000 a month and can remain for up to three years. 

Sze says such units – clean, with windows and are under good management – are still in too short supply and there are thousands on the waiting list. 

Among the first to move into SoCO’s transitional housing was Steffen Lee Kar-chow, 72, who settled into a 100 sq ft hostel unit in Mong Kok last August at a monthly rent of HK$2,500. 

He has a double bed and cupboard, but no table. The bathroom is small but clean. Without a kitchen, he has to buy takeaway food and eat over his suitcase. The only window opens to a podium that stinks of sewage. 

“It is much better than the place where I used to live,” says Lee, who has four children from a past relationship but has no contact with them or their mother. 

The retired underground surveyor used to pay HK$1,500 a month for a bed space in a flat with a dozen other male tenants who shared one toilet. 

He had nothing but a bed and, for privacy, he had to hang a piece of cloth around his tiny space. He wore earplugs when he wanted to shut out the sounds around him. 

Happy with his SoCO unit for now, he hopes he will get a public rental flat eventually. He applied for one last year, but was told he did not qualify because his savings exceeded the limit. 

He will apply again when his savings run out. 

More efforts to protect tenants 

A new tenancy control bill passed by the Legislative Council last year took effect in January, which, among others, restricts rental hikes and utilities charges. 

But tenants and concern groups said not much has improved, as many occupants were still overcharged for water and electricity, and some landlords resorted to oral agreements instead of signing a written contract with tenants to bypass the regulations. 

They also criticised the authorities for failing to enforce the law and intervene in cases where the rules had been breached. 

Other schemes by the administration aim to improve the living conditions of those waiting for public rental flats. 

The Cash Allowance Trial Scheme, launched in June last year, offers cash allowances of HK$1,300 to HK$3,900 a month for households who have waited for public rental housing for more than three years. About 90,000 households are expected to benefit.

The Community Care Fund started a two-year programme in June 2020 to provide a one-off subsidy for low-income households in subdivided units. The subsidy, with a ceiling of HK$8,500 to HK$13,000 depending on household size, can be used to make minor improvements and repairs, buy furniture and household goods, or engage pest control services. 

NGOs and other social institutions also offer help. 

The Caritas Community Development Service runs activities for households of subdivided flats on Kim Shin Lane in Sham Shui Po and has set up a platform for them to give their views and approach government agencies for help. 

Wong Siu-wai, its senior social work supervisor, says these efforts have encouraged households to clean the common areas in and around their flats to improve their living environment. 

“Although they still live in subdivided units, they now contribute to the community, which helps improve their well-being,” she says. 

The Hong Kong Sheng Kung Hui Lady MacLehose Centre has a 100 sq ft kitchen, a washing machine and clothes dryer at its Kwai Chung centre for residents of subdivided units in the area to use. About 100 residents use these facilities each month. 

The centre also provides residents with legal advice and help with moving and home maintenance. 

Worries, optimism over 2049 target 

While these various schemes are welcome, the main question is whether Hong Kong can meet Beijing’s target to get rid of subdivided flats and “cage homes” by 2049. 

This was a goal set last July by the director of the State Council’s Hong Kong and Macau Affairs Office, Xia Baolong, for the city’s administrators to achieve by 2049, when the People’s Republic of China celebrates the centenary of its founding. 

Peace Wong Wo-ping, chief officer of policy research and advocacy of the Hong Kong Council of Social Service, a federation of non-government social service agencies, says the existence of subdivided units reflects the problems of the city’s housing market, including the shortage of supply, lack of regulation and the inability of low-income people to meet their living needs. 

He says it will take a determined effort by the city authorities to deal with the issue of subdivided units. 

“If it is successfully achieved, all residents, both rich and poor, will reach a minimum housing standard,” he says.

But Tang Po-shan, convenor of the Hong Kong Subdivided Flats Concerning Platform, a community organisation of social workers and scholars, warns that simply eliminating subdivided flats could give rise to other forms of inadequate housing with poor living conditions. 

He says the government should not only get rid of such designs, but also resettle the households. 

“The key should be improving the living environment and quality of the residents,” he says. 

Tang adds that many tenants are indifferent to the government’s target almost three decades from now, and some are worried about what choice they will have if these cheap units are wiped out. 

He says:“ They are asking, ‘Will my living conditions truly improve after subdivided units disappear?’” 

Professor Yau Yung, of Lingnan University’s department of sociology and social policy, says the key to achieving the 2049 target without driving households to other forms of inadequate housing is the government’s ability to increase the supply of public rental flats significantly. 

He says the current average waiting time is too long and should be reduced gradually, to at least four years initially. 

The government should also consider legislation to ban more subdivided units coming on the market. 

Yau points out that this is not the first attempt to wipe out these tiny units. Former city leader Leung Chun-ying’s administration also tried to do so, but found it too difficult to rehouse affected residents because there were not enough homes they could afford. 

“The 2049 target is a good thing for Hong Kong,” Yau says. “It can be achieved, but it depends on what the government will do from now on.” 

Dr Lawrence Poon Wing-cheung, a senior lecturer at the building science and technology division of City University, says the city’s political conflicts left many government policies in limbo over the years. 

He urges the government to take advantage of the current stable social environment to move forward quickly with land-related policies to increase housing supply. 

A former member of the Town Planning Board, he suggests exploring land reclamation possibilities, changing the land use of some areas, and raising plot ratios – which fix the built-up area on a site – to build more homes. 

Optimistic that the target can be achieved before 2049, he says: 

“In a city with a highly developed economy like Hong Kong, it is unacceptable to have these subdivided units, which must be wiped out.”

*Name changed at interviewee’s request.

South China Morning Post: ‘This is not a home’: depression, cockroaches, rats and shame add up to misery for Hongkongers in subdivided flats

Illustration: Adolfo Arranz.

To mark World News Day on September 28, 2022, the World News Day campaign is sharing stories that have had a significant social impact. This particular story by Fiona Sun (Edited by Emily Tsang and Alan John) with visual storytelling by Adolfo Arranz, Marcelo Duhalde, Kaliz Lee, Han Huang and Dennis Wong — was shared by the South China Morning Post (Hong Kong).

In the second of a three-part series on Hong Kong’s subdivided flats, Fiona Sun looks at the physical and mental toll on tenants of the city’s most inadequate housing. Beijing has set the city government the target of getting rid of these tiny units and ‘cage homes’ by 2049.

Siumei* prepares dinner in the living room of the 100 sq ft space she calls home in Mong Kok, while her seven-year-old son does his homework at a massage bed near her. 

The 42-year-old divorcee lives with her son and widowed mother, 70, in a subdivided unit too small to have a separate kitchen. 

The adults eat at a small foldable table, while the boy has his meal on the bed, with a line of drying laundry hanging over him. 

After dinner, Siumei plays with her son on the floor while her mother watches TV. Sometimes the three go for a walk outside to leave their tiny space for a while. 

Their 10 sq ft bathroom, most of which is occupied by the toilet and sink, is so small that Siumei must stand outside to help her son bathe. The blocked drainage means they can only shower for less than five minutes at a time, or smelly waste water will flood the floor. 

Siumei and her son share the upper berth of a bunk bed, while her mother sleeps below. They are occasionally startled by rats, which have chewed into their wooden furniture. Cockroaches and dragonflies are common.

One window opens to a podium of stinking garbage, so it is kept closed. Poor ventilation makes their home stuffy, but they switch on the air conditioner only at night to save electricity. 

“When my son asked why we live in such a tiny, poor place, I can only tell him I was too poor to afford a bigger home,” says Siumei, who came to Hong Kong from Guangdong after meeting a Hongkonger. 

The couple married in 2009 but divorced six years later. 

She pays about HK$4,000 (US$513) a month for their unit in a seven-storey tenement building that is more than 50 years old. The amount is more than half her monthly income working part-time at a restaurant. 

“I feel so burnt out and helpless, but I don’t even have room to vent my emotions,” she says. 

Hong Kong has about 110,000 subdivided units ranging from 20 sq ft to 200 sq ft, and they are notorious for their substandard conditions, poor hygiene and fire and security hazards. 

The poor environment has taken a heavy toll on the physical and mental health of the more than 220,000 people who live in them. 

Flimsy partitions, fire hazards 

Most subdivided units are in dilapidated tenements, many of which are dubbed “three nil buildings” because they are without owners’ corporations, residents’ organisations or property management companies. 

The findings of a survey released by the Transport and Housing Bureau in March last year showed that concerns about electricity supply, law and order, and the lack of a fire escape were the top sources of dissatisfaction among subdivided unit tenants. 

Professor Yau Yung, of Lingnan University’s department of sociology and social policy, says the subdivision of flats often results in narrow, long and blocked escape routes, and poor ventilation makes it hard for smoke to disperse. 

Some partitions are not fire-resistant and, without access to kitchen facilities, cooking over an open flame within the units is a fire hazard. 

The Buildings Department warns that work to remove original walls and install new partitions to create subdivided units or add toilets and kitchens may adversely affect safety and hygiene, and put tenants’ lives at risk. 

The department issued 1,913 removal orders for such works from 2016 to 2020, for flouting the Buildings Ordinance. It issued 475 orders last year, and 18 in the first three months of this year.

The operation of the city’s tiniest bed spaces, known as “cage homes”, is regulated by the Bedspace Apartments Ordinance. 

The Home Affairs Department says the number of licensed bed space apartments fell from 15 in 2011 to nine this year. They included six in Yau Tsim Mong district, and one each in Central and Western, Eastern, and Sham Shui Po districts. 

But social workers say many more cage homes as small as 20 sq ft are available in unlicensed flats that go unrecorded. 

‘Inhuman conditions’ 

Yau Sai, 68, pays HK$2,000 a month for his boxlike compartment in an unlicensed bed space flat he shares with 18 other men and women in Mong Kok. 

Returning at night from his job at a food factory in Tsuen Wan, the single man, who asked to be identified only by his given name, unlocks his unit and climbs into it, taking care not to hit his head. 

The flat is stacked floor-to-ceiling with three-layered boxes separated by wooden boards, each big enough for one adult to lie in. 

Yau Sai’s mid-level space keeps him sandwiched between tenants above and below him. A tall man of 180cm, he cannot stretch out as half his space holds his personal belongings. 

There is a small kitchen and three bathrooms. A tenant used to be paid by the landlord to clean the common areas, but that stopped, leaving the bathrooms dirty. 

For privacy, Yau Sai keeps his compartment door closed, but that does little to block the sounds of other tenants chatting, making phone calls or watching TV. 

He browses his mobile phone for the news and to watch videos before bedtime, but is sometimes startled when the tenant above him hits the wooden boards accidentally. 

A bad night’s sleep can leave him with an aching back the next day. He makes sure to lock his unit and take all his cash and bank cards with him when he leaves the flat. 

“It’s inhuman to live in such conditions,” he says, adding he cannot afford anything better on his monthly income of about HK$10,000. 

According to a report on the quality of living in subdivided units released by the Society for Community Organisation (SoCO) last August, almost all 347 households surveyed complained about hygiene problems. 

Many subdivided flats had rats, mosquitoes and bugs. Many units had a makeshift kitchen installed in the living room or a bedroom.

Wrongly connected water pipes smelled bad, and water seeped through walls or from the ceiling. Poor ventilation was common, and some units had no windows. 

In another SoCO survey of 385 households living in cage homes and cubicles in 2020, one in three said they did not feel safe having to stay at home during the Covid-19 pandemic and feared contracting the virus. 

More than half shared a toilet with seven to 10 others – with some using the same toilet with as many as 16 to 20 others – and there were complaints that common areas such as the kitchen and bathroom were not cleaned during the pandemic. 

Impact on physical, mental health 

Living in such poor conditions affects tenants’ physical and mental health, social workers say. 

A survey conducted between 2020 and 2021 by the NGO Caritas Community Development Service of 527 households living in inadequate housing, including subdivided units, asked tenants to score their physical and mental well-being on a scale of up to 100. 

Three in five scored below 50 for physical health, and more than nine in 10 scored below 50 for mental health. 

Many suffered muscle strain, cardiovascular diseases and respiratory problems, as well as mental disorders, and some blamed their poor living conditions. 

Wong Siu-wai, the NGO’s senior social work supervisor, says children living in subdivided flats face higher risks of eye problems because of a lack of natural light, and many have spinal problems from studying in bed. 

“Housing has a significant impact on people’s physical and mental health,” she says. 

The Kwai Chung Subdivided Flat Residents Alliance, made up of residents living in such units in Kwai Chung and social workers, found in a survey last year that about three in four of 78 people living in inadequate housing units suffered moderate to severe depression, and more than two in five had moderate to severe anxiety. 

Social worker Poon Wing-shan, a member of the alliance, says sharing small spaces often leads to conflict and there is no escape for tenants at home. They are also burdened by their rent, which accounts for about 40 to 50 per cent of their income. 

She says tenants live in a constant state of insecurity, subject to rent increases and utility charges by landlords, and fear being kicked out at any time. 

Some who are parents feel guilty for being unable to provide their children a better living environment.

“They regard living in subdivided units as a failure,” Poon says. “None of them thinks of their unit as home, and they view themselves as passers-by with no roots.” 

‘No sense of belonging’ 

Housewife May Lau, 34, feels too ashamed to tell anyone where she lives with her husband, a renovation worker from mainland China who is also 34, and their five-year-old daughter. 

“Living in a subdivided unit makes me feel inferior to others,” she says. 

The family moved into a 150 sq ft subdivided unit in Kwai Chung for HK$6,300 a month in June last year after living with her parents at their public rental flat in the same area. 

But with her husband’s monthly income of about HK$14,000 – below the city’s poverty line for a three-person household – they could not afford anything bigger. 

Their unit is one of the three within a flat and has no separate bedroom or kitchen. There is no space for a sofa or television, and they eat at a small, low table. All three squeeze themselves on the lower berth of a bunk bed, keeping their belongings piled above. 

Her daughter, a kindergarten pupil, complains that there is no room to play and asks to return to her grandparents’ home. 

Her husband’s parents in mainland China also blame her for the family’s poor housing, and Lau says she has stopped seeing some friends who look down on her because of her circumstances. 

Alone at home, she is sometimes overwhelmed worrying their rent might go up, and fearing the impact of the family’s poor living conditions on her daughter. 

“It is not a home. I have no sense of belonging here,” Lau says. 

*Name changed at interviewee’s request.

South China Morning Post: ‘Like a caged animal’: why Hongkongers in city’s notorious subdivided flats say they have no choice

Illustration: Adolfo Arranz.

To mark World News Day on September 28, 2022, the World News Day campaign is sharing stories that have had a significant social impact. This particular story by Fiona Sun (Edited by Emily Tsang and Alan John) with visual storytelling by Adolfo Arranz, Marcelo Duhalde, Kaliz Lee, Han Huang and Dennis Wong — was shared by the South China Morning Post (Hong Kong).

Hong Kong’s poor and destitute have long been unable to afford anything but subdivided living spaces. Now Beijing wants the local government to rid the city of these tiny units and “cage homes” by 2049. John Lee Ka-chiu, who will be sworn in as the city’s next leader on the 25th anniversary of Hong Kong’s return to Chinese rule on July 1, has pledged to resolve housing woes. In the first of a three-part series, Fiona Sun looks at the city’s worst homes and speaks to the people living in them.

After a long night shift, security guard Leung returns to the tiny space he calls home in an old residential building in Sham Shui Po. 

He has 50 sq ft in a loft space that has been subdivided into 12 units of more or less the same size, each barely enough for one person. 

His space is so small that he piles boxes of personal belongings and clothes on the bed, which means he cannot stretch out fully when he sleeps. He has a sink, and a bathroom with no door, but there is no kitchen. 

The windowless space is stuffy, even more so in summer. Mosquitoes keep him up on many nights, and his mattress is stained by squashed bed bugs. 

“When I tell people new to the city about my living conditions, they just cannot believe it,” says Leung, 58, who asked to be identified only by his surname. 

Divorced with an adult son, he moved into the unit in April last year. He had a slightly bigger unit in the same loft for about a year, but downsized when he could no longer afford the HK$3,900 (US$500) rent. Now he pays HK$2,800 a month. 

There are more than 220,000 people like Leung, living in Hong Kong’s worst housing. The city has about 110,000 subdivided flats, mostly in dilapidated buildings in Kowloon and the New Territories. 

Most are rented by singles or couples, but occupants also include single parents and their children, and even three-generation households. 

The severe housing shortage in the city has driven people to rent tiny spaces in overcrowded flats with as many as 40 occupants. 

The most notorious are “cage homes”, which are also known as “coffin homes”, where partitioned, boxlike units are stacked from floor to ceiling, separated by thin wooden boards or wire mesh. 

Leung’s current accommodation reminds him of his childhood, when he and his two brothers squeezed with their parents into a subdivided flat before moving to a public rental home in Sham Shui Po. 

He left home when he got married and bought his own flat. Now divorced, he left the property to his ex-wife and son.

Leung ran a logistics company in mainland China, but it went bankrupt in 2019 and he returned to Hong Kong. He was jobless until he found work as a security guard last year. 

He longs to have a better place to stay, but says:“ Bad as it is, this is all I can afford for now.” 

Most occupants have no choice 

Hong Kong’s subdivided housing spaces, many of them windowless and plagued by hygiene and fire hazards, have been criticised for their poor living conditions. 

Despite their state, the government has long adopted a policy of merely ensuring their safety rather than phasing them out, as many believe the city’s poorest need these homes. 

Last July, however, the director of the State Council’s Hong Kong and Macau Affairs Office, Xia Baolong, set city administrators the target of eliminating deep-seated social problems by 2049, when the People’s Republic of China celebrates the centenary of its founding. 

Specifically, he demanded city leaders eradicate subdivided units and cage homes. 

In what was her final policy address last October, city leader Carrie Lam Cheng Yuet-ngor did not refer to Xia but made housing and land supply a major focus, setting the goal of providing decent accommodation to all residents. 

Her successor as chief executive, John Lee Ka-chiu, has pledged to act on housing, and made a point during his election campaign to visit poor residents of subdivided flats. 

A report by the Transport and Housing Bureau in March last year said there were an estimated 110,008 subdivided units housing 226,340 people, or about 3 per cent of the city’s 7.5 million population. 

It said the median area of these units was 124 sq ft, but social workers estimate that some are as small as 20 sq ft. More than 60 per cent of the units are in Kowloon, about 24 per cent are in the New Territories and the rest are on Hong Kong Island. 

To protect renters, the government introduced a tenancy control bill on subdivided units last July, which was passed by the Legislative Council and took effect in January. Among other measures, it restricts rent increases when leases are renewed. 

Most tenants of subdivided units say that with their meagre incomes, they have no other choice of lodging. 

Unable to buy their own homes in a city with skyrocketing property prices, their best hope is to get a public rental flat. But the queue is so long that it can take a decade to get one, and most say they are forced to rent a subdivided space while waiting. 

An irony of Hong Kong’s housing scene is that on a per-square-foot basis, the city’s poorest people pay rents comparable to those for private flats, or even more.

Statistics show that in April, the average monthly rent per square foot of a private flat under 430 sq ft was about HK$37 on Hong Kong Island, HK$35 in Kowloon and HK$28 in the New Territories. 

For subdivided units, the median monthly rent – the midpoint between the lowest and highest rents – was HK$39 per sq ft, according to the report by the Transport and Housing Bureau. 

But still people choose these homes because the overall monthly rent is still lower. The report showed that the median monthly rent for a subdivided unit was HK$4,800, much lower than for the smallest private flats. 

For those in subdivided units, rent takes up about a third of their monthly household income. 

The Transport and Housing Bureau report showed that these households had a median monthly income of HK$15,000 in 2020, less than half the HK$33,000 for all households in the fourth quarter of that year. 

When the Society for Community Organisation (SoCO) interviewed 432 households living in tiny spaces in April last year, it found that the median monthly rent was between HK$4,500 and HK$6,500 for traditional subdivided flats – in which a standard unit is partitioned into two or more smaller spaces – HK$2,300 for tiny bed spaces, and HK$2,800 for cubicles. 

SoCO found that in March last year, average monthly rents per square foot worked out to HK$104 for a bed space, HK$30 to HK$43 for a traditional subdivided flat and HK$40 for a cubicle – higher than the rate per square foot for most private homes of various sizes. 

Lawrance Wong Dun-king, president of Many Wells Property Agent, says the higher rent per square foot for subdivided spaces shows the imbalance between supply and demand in Hong Kong. 

“The smaller the unit is, the higher its per-square-foot rent. The result is, the poorest pay the highest rent,” he says. 

‘Waiting for death’ 

For the past seven years, Xing Aizhen, 46, and her two sons from her first marriage, aged 20 and 15, have shared a 100 sq ft space in a Mong Kok flat. 

Originally from Hainan province, she came to the city with her sons in 2015 after marrying again, but her second marriage to a Hongkonger ended in divorce too. 

Earning about HK$10,000 a month as a part-time waitress, she says she cannot afford anything better than the subdivided unit, which costs HK$3,900 a month. 

Her two sons share a bunk bed while Xing sleeps on a single bed. Their bathroom and kitchen practically share the same space, and she can smell the stench of the toilet while preparing food.

With only two small windows, the place is so poorly ventilated that stir-frying food leaves a strong, greasy odour. She only boils or steams their meals. 

“The place is just too small for the three of us,” she says, adding that her older son often complains about the arrangement. 

She says the space seemed even smaller during the coronavirus pandemic, when the three of them stayed at home. Her older son took online vocational cooking courses, and her younger son, in secondary school, also had online classes. She has been staying home more too, as her employer cut her working hours and income. 

After waiting five years for a public rental flat, Xing says she hopes to provide a bigger place with better living conditions for her sons. 

“A good place to live is important for us to lead a stable and secure life,” she says. 

For many like her, public rental housing offers the only hope, but such flats are hard to come by. 

As of March this year, there were about 147,500 general applications for public rental housing from families and single elderly people who had priority, with an average waiting time of 6.1 years. 

Further back in the queue were about 97,700 non-elderly single applicants, many of whom have been waiting for decades. 

SoCO deputy director Sze Lai-shan says that when it comes to inadequate accommodation in Hong Kong, the “coffin homes” are the worst of all. 

“Some elderly people describe their lives in cage homes as ‘waiting for death’,” she says. 

Hongkonger Tsang Shiu-tung, 51, says he sees “no light at the end of the tunnel”, having been in the queue for public rental housing for 16 years. 

He lives in one of 18 coffin-like bed spaces separated by wooden boards in a flat in a dilapidated tenement building in Yau Ma Tei. 

“I live like an animal in a cage,” he says. 

Divorced with no children, he moved into the place in May last year and pays a monthly rent of HK$1,500. The pandemic has left the part-time supermarket porter with a reduced income of less than HK$10,000 a month. 

The tiny compartments, each marked with a number, are stacked into two levels. The 18 male tenants, aged from their 40s to their 80s, share two bathrooms, only one of which has a shower. There is no kitchen.

The environment is hellish, Tsang says. His upper-level bed space is so narrow that he can barely stretch out fully or sit upright without hitting the wooden partition, only to have the man in the bunk below kick upwards to signal his irritation. 

Some of the men stay up late, others smoke indoors and the pungent smell of cigarettes lingers. Tsang draws the door of his compartment, but that does little to block the noise or smoke, and only makes it stuffier inside. 

There have been times when he resorted to sleeping rough in parks just to get away. 

“I want to escape from this place, where I feel so helpless,” he says. “All I want is a safe place to live.”

South China Morning Post: Life in Hong Kong’s worst living spaces: from cage homes to subdivided flats

To mark World News Day on September 28, 2022, the World News Day campaign is sharing stories that have had a significant social impact. This particular series was shared by the South China Morning Post (Hong Kong).

Everyone is familiar with the sight of people crammed into Hong Kong’s cage homes, with barely enough space to lie down. More than 220,000 people live in these notorious subdivided flats, facing grim conditions as well as fire and security hazards because they can afford nothing better. 

This three-part story on the emotive topic struck at the heart of the matter. Through phenomenal infographics and detailed, on-the-ground reporting, the Post looked at the realities of life in such dwellings and spoke to the people forced to live in them. 

They spoke of living like caged animals. ‘This is not a home,’ they told us as they shared the toll taken by the poor living conditions on their physical and mental health. 

And with Beijing having demanded that the Hong Kong government rid the city of these tiny units by 2049, our series of reports hammered the point home, spotlighting the impact of policy decisions on real people and recording these experiences for posterity, with the hope that one day no Hongkonger would have to repeat them.

Part one: ‘Like a caged animal’: why Hongkongers in city’s notorious subdivided flats say they have no choice.

Part two: ‘This is not a home’: depression, cockroaches, rats and shame add up to misery for Hongkongers in subdivided flats.

Part three: Can Hong Kong deliver on 2049 target to wipe out subdivided flats and ‘cage homes’? Resident says ‘I will probably die in one of them’.

South China Morning Post: Why size matters when it comes to China’s new leadership line-up

Illustration: Henry Wong.

To mark World News Day on September 28, 2022, the World News Day campaign is sharing stories that have had a significant social impact. This particular story was shared by the South China Morning Post (Hong Kong).

The Communist Party is set to hold its 20th national congress in mid-October, a gathering that will usher in a new line-up of the party’s leadership. In the second piece in series exploring the rules of the personnel reshuffle, Jane Cai looks at the conventions surrounding the Politburo Standing Committee. 

At the end of the ruling Communist Party’s twice-a-decade congress in October, following a leadership reshuffle, those at the very top of Chinese politics will walk down a red carpet and meet the press. 

Only then will it be known who and how many of China’s political elites will make up the new Politburo Standing Committee, the party’s top decision-making body. 

There are no written rules on how many members it can have – the number has fluctuated between three and 11 since 1927, when the standing committee was first formed. But if the past is any guide, a change in size could reflect a shift in the concentration of power or a move to balance factions. 

Theoretically, the members are chosen by delegates to the national party congress to represent the rich and diverse voices of the 90 million party members. While the members are ranked by a hierarchical order, they carry the same voting rights and make decisions collectively, with the party secretary as first among equals. 

And they vote to decide on most key issues. For this reason, the size of the standing committee is almost always kept at an odd number to ensure there are no tied votes. 

In practice, the standing committee is effectively “the small council” to help the party chief rule the country and the party. Each member is given certain portfolios and areas of responsibility. The exact division of labour and chemistry among the standing committee members varies greatly, and some party secretaries are more dominant than others. 

During Deng Xiaoping’s era, when the real power was in the hands of the party elders, there were mostly just five standing committee members. Deng’s eventual successor Jiang Zemin expanded the standing committee to seven in 1992, and again in 2002 as he stepped down from the party leadership role. 

Hu Jintao, whose tenure was marked by a diffusion of power, had eight other colleagues. While the extra seats ensured different factions had a voice in the top decision-making body, it also led to fragmentation.

During Hu’s decade, the standing committee was often half-jokingly called “nine dragons ruling the rainfall” – a Chinese idiom based on the mythical creature’s role in controlling the rain. Too many dragons lead to severe droughts, as none is powerful enough to produce a downpour. 

When Xi Jinping took over in 2012 with a mission to revitalise the party, he reduced the standing committee back to seven. It was seen as a step to concentrate power for the most powerful leader since Mao Zedong and Deng. 

Most of the analysts interviewed by the South China Morning Post believe this was the right balance between representation and efficiency. 

Xi, 69, leads the current Politburo Standing Committee. The others are, by hierarchical order, Premier Li Keqiang, 67; Li Zhanshu, 72, head of the top legislative body; Wang Yang, 67, chairman of the top political advisory body; ideology tsar Wang Huning, 67; Zhao Leji, 65, head of the top anti-corruption body; and Vice-Premier Han Zheng, 68. 

Xi is widely expected to secure a third term in congress. One of the earliest and surest indications was the 2018 amendment to China’s constitution removing term limits on the presidency. 

Although the presidency and party chief are different roles, they are usually occupied by the same person. Removing the term limits for the presidency strongly suggested that Xi would stay for more than two terms. 

It is, however, unclear whether other Politburo Standing Committee members aged 68 or over will have to retire, as has been the case in the past. 

If the convention holds, Li Zhanshu and Han Zheng will step down. 

Li Keqiang, 67, must step down as premier after completing his second term. He may stay in the standing committee and pick up another official position, although most analysts believe a full retirement is more likely. 

This raises the question for Wang Yang and Wang Huning – both also 67. 

Analysts are divided over how the leadership change will pan out, with estimates of how many seats could be vacated ranging from one to five. 

There are plenty of hopefuls waiting in the wings to take them. 

They include Chen Miner, Ding Xuexiang, Hu Chunhua, Chen Quanguo, Cai Qi, Li Hongzhong, Li Xi, Huang Kunming and Li Qiang – all currently either party secretaries of provinces or municipalities or heads of key party organs. 

But many analysts say the size of the Politburo Standing Committee is unlikely to change, given that Xi has already consolidated his hold on power.

“Historically, the committee had three to five members when the overriding need was power centralisation,” said Chen Daoyin, a political scientist and former professor at the Shanghai University of Political Science and Law. 

“When the emphasis was on balancing power, the [committee] usually expanded to have more members. In the Xi era, power centralisation is the main theme, which means the possibility of the committee expanding is low,” Chen said. 

“Meanwhile, Xi has already cemented his power, so there’s no need to reduce the number of seats.” The Politburo Standing Committee has not always been the party’s supreme body. It was given exclusive decision-making power in 1992, when then paramount leader Deng disbanded the Central Advisory Commission – a body made up of influential, retired party elders that had previously had the final say on key decisions. However, some retired elders have remained influential within the party. 

Xi has become the most powerful Chinese leader since Mao and Deng, helped by a widespread crackdown on corruption within the party, government and military, and indoctrination in his political ideology, Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. 

The propaganda machine has gone into overdrive in the run-up to the party congress, including embracing a new slogan to entrench Xi’s status – the “two establishments”. It refers to establishing Xi’s status as China’s “core” leader and establishing his political doctrine, which was enshrined in the constitution in 2018. 

Chen said a big change to the size of the Politburo Standing Committee, say an expansion to nine or a reduction to five, would be telling. 

“Both are extreme scenarios and would suggest Xi’s authority was impaired, there was an unexpected objection or an internal power struggle among Xi’s protégés,” he said. 

Steve Tsang, director of the SOAS China Institute at the University of London’s School of Oriental and African Studies, also expected the standing committee to be kept at seven. 

“The committee size used to be expanded when the general secretary needed to accommodate colleagues from different factions and there was just not enough scope to do so with a lower number,” he said. 

According to Tsang, Xi should have no need to pacify the factions by increasing the committee, with many of their key players weakened after a sweeping anti-corruption campaign that targeted high-profile figures and others, right down to the grass roots. 

Five years ago, Xi told party leaders that five disgraced heavyweights – Zhou Yongkang, Bo Xilai, Guo Boxiong, Xu Caihou and Ling Jihua – had “all engaged in political conspiracy activities”, according to a copy of the speech published by Xinhua.

Zhou had been a Politburo Standing Committee member, while the other four were either on the Politburo or the Central Secretariat, the party’s nerve centre. 

Former deputy public security ministers Fu Zhenghua and Sun Lijun are among the more recent targets, both accused of political disloyalty, establishing political factions, and forming groups for personal gain. 

Neil Thomas, a China and Northeast Asia analyst with consultancy Eurasia Group, also said Xi was unlikely to change the size of the standing committee at this year’s congress. 

“An increase would make central decision-making more unwieldy and a decrease would deny expected promotions to his allies,” he said. “Xi does not need to change the size of the Politburo Standing Committee to consolidate his power, so there seems little incentive for him to spend political capital on doing so.”

South China Morning Post: Why is retirement beckoning for 11 members of the Communist Party of China’s top decision-making body?

Illustration: Perry Tse.

To mark World News Day on September 28, 2022, the World News Day campaign is sharing stories that have had a significant social impact. This particular story was shared by the South China Morning Post (Hong Kong).

The Communist Party is set to hold its 20th national congress in mid-October, a gathering that will usher in a new line-up of the party’s leadership. In the first piece in a series exploring the rules of the personnel reshuffle, Jun Mai looks at how unofficial retirement conventions will shape the power transition.

Fading out gradually is seldom an option for top Chinese leaders. 

They appear on prime-time news every night. Then, when the day of retirement comes, they suddenly vanish, rarely making public appearances or comments. Little is known about how they spend their time. 

The biggest mystery is how retirement decisions are made. For those who sit on the Politburo – the top echelon of the ruling Communist Party – the only guideline, in place since the party’s first orderly power transition in 2002, remains the unwritten rule of retiring at the age of 68. It was established gradually after decades of political turmoil to rejuvenate the party and ensure a stable transition of leadership at the top.

The 20th party congress, starting on October 16, will produce the first exception to that rule when 69-year-old President Xi Jinping stays on for a third term as the party’s top leader, the first to do so since the death of Mao Zedong in 1976. 

The big question now is whether any of Xi’s 24 Politburo colleagues will benefit from a similar exemption. 

Eleven other Politburo members will have reached the unofficial retirement age. Two of them are members of the seven-man Politburo Standing Committee, the pinnacle of the party’s power structure, which is led by Xi. 

Most experts interviewed by the Post said the privilege of breaking the unofficial retirement age rule at the Politburo level would be reserved for Xi. But exceptions could be made for special cases like Foreign Minister Wang Yi, who is already 68 but still considered a candidate to join the Politburo. 

All eyes are on how Xi, hailed as the third definitive paramount leader in party history, will come up with a new set of rules for power transition. 

“Xi is a man with a strong historical mission who feels that a lot more can be achieved under his continued leadership,” said Zhu Zhiqun, a political scientist at Bucknell University in Pennsylvania. When it comes to leadership transition, Xi has made several bold moves – such as not promoting an heir apparent after his first term and abolishing presidential term limits in 2018. 

Setting aside the age rule would be a third one, but experts said the president would be reluctant to do so for everyone. 

“Mostly likely those who have reached the retirement age will be replaced at the 20th party congress,” Zhu said. 

Deng Yuwen, a former editor of Study Times, the newspaper of the Central Party School, also said others would mostly observe the age rule. 

“The upside is that it’s fair to everyone [other than Xi] but the downside is it would see people who are still capable step down,” he said. “I think they’ll still largely abide by the rules but special treatment might be granted to certain positions, like the foreign policy area.” 

Both of China’s top diplomats – Politburo member Yang Jiechi and Foreign Minister Wang – will have passed the retirement age for their levels when the congress is held. Yang is 72, while Wang will turn 69 in October. 

There are some rising stars in foreign affairs, but none carry the weight and authority of Yang or Wang. With China facing an increasingly complex and difficult external environment, some observers said Wang was likely to stay on and succeed Yang.

Theoretically, the same age limit would apply to Xi’s trusted aide in economic affairs, 70-year-old Liu He. The three generals in charge of the supreme command of the People’s Liberation Army would also all have to step down according to the age rule. 

The dilemma for Xi is that he has to either make many more exemptions or lose such people with proven track records who are still energetic and active. 

Yang Dali, a political scientist at the University of Chicago, also expects Xi will choose to adhere to the age limits. 

“There are not many signs that they will be broken, especially when the top leader wants to promote younger officials, you’d need certain people to step down from their positions,” he said. 

He also noted that at the ministerial level, the retirement age of 65 had been implemented quite rigidly. 

Some ministerial-level officials have even received official notice that their services are no longer required on their 65th birthdays, the Post has learned. 

Exceptions are rare but include Luo Huining, who was given the top job at the central government’s liaison office in Hong Kong at the height of the city’s anti-extradition bill protests in 2020 just months before he turned 65. 

“At the ministerial level, the retirement rule is still largely followed, because otherwise the costs of decision-making would rise dramatically,” Yang Dali said. “In the Chinese system there are lots of deputies, like vice-premiers and vice-ministers, so that makes it somewhat easier to fill the vacancies. It’s not like you’d run out of talent.” 

The real challenge for Xi and the party in terms of power transition, Zhu said, lies in picking a successor for the president. 

“The question is whether he will stay for another five years only or will stay on indefinitely,” he said. “It boils down to how to manage the power transfer from him to a successor peacefully five or 10 years later, but at this point there is no clear successor.” 

In the past 30 years, a clear successor usually would join the Politburo Standing Committee by the time the second term of the party’s top leader started. That person, young enough to serve three more terms, would usually be handed a comprehensive and wide-ranging portfolio. 

Xi and his predecessor Hu Jintao both served as vice-president for a term, anointing them as heir apparent, after they ascended to Politburo Standing Committee membership, but Wang Qishan, then 69, was appointed vice-president in 2018 despite not being a member, derailing what had become a succession train. 

There are no young potential successors to Xi in the party’s top echelon.

“To ensure stability and smooth power transition, the party will need to identify and groom the next generation of leadership soon after the party congress,” Zhu said. 

The party takes pride in the fact that it is governed by more than 3,600 regulations and directives, but there are no rules laid down for the transition of power in the 25-member Politburo. 

Those who sit on the top decision-making body get to vote and have a say on the most important issues facing China, and they always hold key state or party positions. 

A set of rules that became known as “seven up, eight down” was believed to have been implemented in 2002 to set some boundaries on the closed-door bargaining over the top seats, with that year seeing the first orderly power transition of the top leadership since the party was founded in 1921. 

At the 16th party congress in 2002 and the two that followed, all members of the Politburo above the age of 68 stepped down. On the other hand, there was no guarantee that those 67 or younger would retain their seats. 

Many hailed the unwritten rule as a sign the party’s unpredictable politics were evolving in a more stable direction, with Zhou Ruijin, former deputy editor of People’s Daily, described it as “spectacular progress” in 2008. 

But things became blurrier in 2016, when Xi was anointed as the party’s “core”, with the rule dismissed as “folklore” by a mid-level ideology official speaking to overseas journalists in Beijing. 

Throughout China’s long history, the challenge of finding the right heir and ensuring a smooth transition of power has frustrated the country’s greatest emperors and political leaders – from Qin Shi Huang and Taizong of Tang to Mao and Deng Xiaoping. 

Xi has yet to present an effective solution.

South China Morning Post: China’s Communist Party: The Rules for Reaching the Top and Staying

To mark World News Day on September 28, 2022, the World News Day campaign is sharing stories that have had a significant social impact. This particular series was shared by the South China Morning Post (Hong Kong).

This series sheds light on the Communist Party’s top-table reshuffle, providing context and laying out the implications of decisions that will impact the country and beyond.

Part one explores the rules of the personnel reshuffle and how unofficial retirement conventions will shape the power transition.

Part two looks at the history of the size of the Politburo Standing Committee and how it has grown and shrunk through the decades.

Part three will dive into the qualities needed to be promoted to the top. Taken together, the series leaves an outsized impact in the discourse around China’s ruling party.

China’s carbon neutral goal needs a lot of heavy lifting by industries

Airlines, shipping, buildings materials, chemicals and power producers, the biggest emitters of carbon dioxide, are expected to do the heaviest lifting over the next four decades for China to meet its carbon neutral goal by 2060.

Nine of every 10 vehicles on China’s roads will have to run on non-fossil fuel, while half of the aircraft fly on green hydrogen and 90 per cent of heavy industries will need to be retrofitted with carbon capture facilities to put the nation on track to cut carbon emission by 75 to 85 per cent, leaving the residual amount to be offset by removals, according to the Boston Consulting Group (BCG).

“Some of the technologies required, such as carbon capture and storage and [emission-free] hydrogen fuel are not [commercially] ready yet,” said Thomas Palme, who leads BCG’s social impact practice in China, adding that it can only be possible “with concerted effort and investment.”

The challenges underscore the technological and financial hurdles that must be overcome for China to deliver on President Xi Jinping’s surprise pledge in Septemberbefore the United Nations. If all the pieces can come together, the result could be a giant leap in technological capability for China to the top of global competitiveness, as the world grapples with strategies and policies to deal with climate change, one of the gravest problems to confront humanity.

Smoke belching from a coal-fuelled power station near Datong, in China’s Shanxi province on November 19, 2015. Shanxi, the largest coal-producing region in China, frequently ranks top among provinces with the worst air pollution. Photo: AFP

China’s coal and gas-fired power plants are responsible for almost half of the nation’s carbon dioxide emission, while heavy industries – including the world’s largest capacity for steel, aluminium, petrochemicals and cement – contribute one-third, BCG said.

With an average age of less than 13 years – out of a typical useful lifespan of 40 years – the use of some power plants could be extended even as climate policies clamp down on emissions.

Aviation has relatively low carbon impact compared to energy generation. SCMP Graphics

This is particularly important since 60 per cent of the world’s coal-fired plants could still be operating in 2050, as could 40 per cent of steel mills – mostly in China – unless they retire early, according to International Energy Agency (IEA) in Paris. That is not viable, as the cost of installing carbon capture facilities would triple the price of coal-fired power, said HSBC’s head of Asia utilities research Evan Li, citing data by the Institute for Energy Economics and Financial Analysis in Ohio.

Change is on the way, as authorities in XinjiangQinghai, Shanxi and Inner Mongolia have mandated that 5 to 20 per cent of the total capacity of solar farms must comprise energy storage, which would enhance the intermittent energy’s competitiveness against coal-fired power, said Frank Haugwitz, founder of Asia Europe Clean Energy (Solar) Advisory.

Solar power will surpass wind energy by the end of this month as China’s third-biggest source of electricity by capacity, and the rate of installing solar farms in the next five years will “much exceed” the pace in the previous five years, renewable energy officials said on Thursday.

Chinese firefighters evacuating residents during a flash flood at Pingxiang in eastern China’s Jiangxi province on 12 April 2006. Torrential rains and typhoons killed over 1,300 people in China in 2005 and destroyed 1.22 million buildings, causing direct economic loss of 155.8 billion yuan (US$19 billion). Photo: AFP

The prospect of shutting down mass coal-fired power plants could present a policy dilemma between climate change and economic stability. China’s banks could see their default ratio on loans to the coal-fired power sector surge from 3 per cent to over 20 per cent within a decade, according to a scenario analysis by Centre for Green Finance Development, Tsinghua National Institute of Financial Research.

Climate transition bonds are needed to fund the acquisition of coal-fired power companies in China, with clearly defined plans to inject renewable energy projects into them to gradually retire the plants within a set period, said the research centre’s director Ma Jun, who is also chairman of Hong Kong Green Finance Association.
This would avoid bankruptcies that spill over to bad loans and social risks, he said, adding that talks are ongoing in Shanxi, China’s largest coal producing region, to facilitate such bonds.

Compared to industry and power generation, transport is a smaller segment of total emissions. SCMP Graphics

Carbon capture, utilisation and storage (CCUS) – the capture of carbon dioxide from the emission source, or directly from the atmosphere – has been in use for 45 years, according to the consultancy Global CCS Institute in Melbourne. In the United States, large-scale CCUS projects involve injecting carbon dioxide into oil wells to enhance output.

The technology has been tested in China for about a decade, pioneered by coal mining giant Shenhua Group, now renamed as China Energy Investment Corporation. Carbon dioxide collected from coal-to-oil conversion projects in Inner Mongolia is trucked and injected into sealed underground caverns for permanent storage.

PetroChina has also been collecting carbon dioxide from a natural gas processing plant and injecting it into its Jilin oilfield since 2018.

PetroChina’s facilities in Jilin on May 24,2004. Photo Reuters

Retrofitting CCUS will have a greater chance of success for power plants and industrial facilities that are young, efficient and located near places with opportunities to store or use carbon dioxide, IEA said. When CCUS can be commercially viable in China is unclear, as details of the national mandatory carbon dioxide emission quota – critical for putting a market price on emissions – have not been announced.

“China has some successful CCUS pilots, but their applications have been rather restricted, the volumes rather limited and [they are] commercially uncompetitive,” said Yang Fuqiang, China programme senior adviser on climate and energy, at The Natural Resources Defence Council in New York.

The technology must be deployed in large scale to reach carbon neutrality, IEA said.

“Reaching net zero [carbon emission] will be virtually impossible without CCUS,” IEA said in September. “Alongside electrification, hydrogen and sustainable bioenergy, CCUS will need to play a major role.”

CCUS may be ready for industrial application by 2030 in China, with a cost reduction of between 40 per cent and 50 per cent by 2040, according to a technology development road map by the Ministry of Science and Technology (MOST) last year.

“Hurdles to faster CCUS deployment in China include the lack of a legal and policy framework, limited market stimulus and inadequate subsidies,” the IEA said. “Public understanding and awareness is relatively low.”

Global pandemic conditions have reduced emissions by aviation by around half. SCMP Graphics

“Green” hydrogen, the other key technology for fighting climate change, has made significant progress towards commercial deployment due to a drastic fall in renewable energy cost. Production of this virtually emission-free fuel involves using renewable electricity to split water into oxygen and hydrogen.

The world’s first wind-generated green hydrogen power project, scheduled for commission in January, may be expanded into a large plant for deployment around 2025, according to Siemens Gamesa, the dominant European turbines producer.

Hydrogen and ammonia are touted as the mainstay clean fuel to replace coal, diesel, petrol, bunker and jet fuel in a few decades, with potential applications in heavy industries such as iron and steel, chemicals and glass.

China’s carbon footprint is trending up. SCMP Graphics

“The pathway to emission-free electricity is wind and solar, and the pathway to emission-free everything else is green hydrogen produced from wind and solar,” said Alex Tancock, co-founder and managing director of InterContinental Energy, one of the growing list of developers pushing for hydrogen projects.

A consortium led by InterContinental proposed a US$36 billion solar and wind-powered hydrogen production project aimed at East Asia. Located in the Pilbara Desert in Western Australia state on a site six times the size of Hong Kong, it comprises 26 gigawatts of wind and solar farms, 2.3 times Hong Kong’s power generating capacity.

The consortium is in talks with Asian buyers of hydrogen and ammonia, including power and shipping firms, besides technology, energy, and asset management companies for investments by 2025 for construction to start.

Global hydrogen production could surge sevenfold by 2070 from last year’s 75 million tonnes, IEA said.

A computer-generated image of three prototypes of zero-emission hydrogen-powered aircraft made by Airbus. Photo: AIRBUS / AFP

Direct use of hydrogen by ships and vehicles may take up 30 per cent of demand in 2070, while synthetic aircraft fuel will account for 20 per cent. Liquid hydrogen can be used for short-haul flights, while synthetic fuel can be used in existing jet engines, Tancock said.

Airbus revealed three concepts in September for the world’s first zero-emission commercial aircraft, with modified gas turbine engines that use hydrogen instead of jet fuel, which could enter service by 2035.

Transport accounted for 9 per cent of China’s estimated carbon emission of 11.7 billion tonnes last year, BCG said.

Commercial aviation accounts for 2 to 3 per cent of global carbon emission, according to the International Air Travel Association (Iata), the industry guild. It has committed to cap members’ carbon emissions this year, and halve them by 2050 from 2005 levels.

An Airbus A380, the largest commercial aircraft in service, with 555 seats in standard configurations, taking off from the Toulouse-Blagnc Airport in southern France for delivery to China Southern Airlines on 14 October 2011. Photo: EPA

China has included domestic aviation among eight sectors to be subjected to carbon emission caps and quotas trading.

Domestic flights grew 7.5 per cent to 83 billion tonne-kilometre last year, while the entire industry’s carbon emission per tonne-km fell 16 per cent from 2005, according to the Civil Aviation Administration of China. Some 74.5 million tonnes of carbon dioxide emission could potentially be subject to a cap-and-trade regime.

China Southern Airlines, the nation’s largest fleet operator, said its 2019 carbon emission grew 6.4 per cent to 28.6 million tonnes. The Guangzhou-based carrier tested a 10 per cent blended bio-jet fuel made with sugar cane in a flight last year, emitting 73 per cent less carbon dioxide than conventional jet kerosene.

The CMA CGM Group’s container ship Jacques Saade at the Shanghai Jiangnan-Changxing Shipyard in September 2019. With the capacity to carry 23,000 TEUs of containers, this is the world’s largest ship to be powered by liquefied natural gas (LNG). Photo: Handout

The shipping industry is also looking to hydrogen, although huge research and development investments will be needed before this can become commercially viable, according to London-based International Chamber of Shipping.

“After a long history of wind, coal and oil-fuelled ships, a fourth propulsion revolution is needed if shipping is to decarbonise completely … an entirely new generation of fuels and propulsion systems will need to be developed,” it said in a report last month.

The task facing the industry is daunting. Long-term growth in maritime trade means even if the average carbon emission by the entire global fleet is slashed by 90 per cent, it would only cut the industry’s carbon emission by half by 2050, the chamber said. The global vessel fleet – consuming 4 per cent of oil output and contributing 2 per cent in carbon dioxide emissions – must be retrofitted, while new fuel supply networks must be developed if hydrogen and ammonia are to be adopted, it added.

The shipping industry proposed a levy on marine fuel sales to provide US$5 billion over 10 years for research to turn the “propulsion revolution” into reality, the chamber said.

For InterContinental, exporting ammonia to China is more viable, due to the high costs needed to ship hydrogen at minus 253 degrees Celsius, if the project takes off.

“I would expect China to have a big industry producing hydrogen, unlike Japan and South Korea which have little resources and would have to import,” Tancock said. “Projects like ours will supplement China’s production by providing lower-cost green alternatives like green ammonia.”

Additional reporting by Iris Ouyang and Echo Xie.

This story, originally published by South China Morning Post, has been shared as part of World News Day 2021, a global campaign to highlight the critical role of fact-based journalism in providing trustworthy news and information in service of humanity. #JournalismMatters.

Carbon neutrality: China sowing seeds of change to meet 2060 target

China’s renewable energy industry is poised to lead an unprecedented industrial transformation that would turn the world’s largest greenhouse gases emitter into a carbon neutral country in less than four decades, at an estimated cost of US$5 trillion.

The nation, already the biggest global producer of hydro, wind and solar power, will have to curtail most fossil fuel production and drastically install more equipment to harness nature’s energy to meet the 2060 carbon neutrality goal pledged by President Xi Jinping to the United Nations General Assembly in September.

The uncertain journey to carbon neutrality – where residual emission is fully offset by amounts captured from the atmosphere – will be a gradual and at times painful process, because it transforms livelihood in the tens of millions, involving trillions of dollars in funding, analysts said.

“The most challenging part of the shift is not the investment or magnitude of renewable capacity additions but the social transition,” said Prakash Sharma, head of Asia Pacific markets and transitions at resource consultancy Wood Mackenzie in London. “[Slashing] coal capacity will result in loss of coal mining jobs, affecting provinces that depend on its revenues and employment generation.”

A worker clears a conveyor belt used to transport coal near a coal mine in Datong, in China’s Shanxi province on November 20, 2015. Photo: AFP

To meet the goal, China must cut its reliance on fossil fuel to 25 per cent by 2050 from the current 85 per cent, removing much of the rest with carbon capture and storage technology, according to Sanford Bernstein’s analysts Neil Beveridge and Wang Lu.

In the makeover scenario, natural gas – with a carbon footprint half of coal and a quarter less than petroleum – is the only fossil fuel that will grow in the energy consumption mix to 14 per cent from 8 per cent. Coal’s contribution will shrink to 3 per cent from 57 per cent, while oil will decline to 8 per cent from 20 per cent.

Solar energy is forecast to be the biggest winner, rising from 1 per cent to 22 per cent and become the biggest energy source, followed by wind power at 17 per cent from 3 per cent. Nuclear energy’s weighting could quadruple to 8 per cent, and hydrogen will grow from almost zero to 11 per cent.

Solar panels arranged to form the picture of a giant panda by Panda Green Energy Group in Datong city in Shanxi province on July 21, 2017. Photo: Panda Green Energy Group

William Shen, a Chinese journalist, paid 200,000 yuan in 2017 to install a 100-square metre (1,076 square feet) solar panel on his roof in Wujiang city in Jiangsu province. He sells the power generated from his 15-kilowatt solar panel to the local electricity grid, receiving between 1,000 yuan and 2,000 yuan every month, based on the local tariff rate of 0.42 yuan for every kilowatt-hour

“It was not a good deal in business terms,” Shen said. “But I still think the money is worth of it because using clean-energy is of great social value.”

China’s energy transition will create millions of jobs in renewable energy. Already the leading equipment producer and the largest market, China employs 2.2 million people in solar power, more than half of the industry’s jobs worldwide, according to the China National Renewable Energy Centre. Chinese wind farms and factories making wind mills and turbines employed 518,000 workers, or 44 per cent of the global total.

Millions of jobs are at stake for coal mines, where the top 10 miners typically employ between 80,000 to 160,000 workers. China’s largest 50 miners, producing 71 per cent of the nation’s coal, had 4.15 trillion yuan (US$634 billion) in combined revenue last year, according to China Coal Industry Association.

SCMP Graphics

Shanxi province, the hardscrabble, landlocked region in northern China, is the nation’s largest coal production areaearning more than half of its state-owned industrial sector’s output from coal-related activities over the past three years. Coal-related assets make up 36 per cent of Shanxi’s state-owned assets, Guosheng Securities said.

Over the next four decades, many coal mines and thermal power plants may have to shut, unless the industry can slash the cost of capturing the carbon dioxide emissions.

The capture, usage and storage of carbon, a potential game-changer for the long-term decarbonisation in fossil fuel industries, is still nascent in China and is uneconomical, said HSBC’s head of Asia utilities research Evan Li. These carbon capture facilities would triple the cost of coal-fired power, he said, citing data from the Institute for Energy Economics and Financial Analysis in Ohio, which said in July that there is “no commercially viable examples of … [such projects] … anywhere in the world.”

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The world will have to look to the Chinese government’s 14th Five-Year Plan from 2021 to 2025, due to be published next year, for details of how every energy-intensive industrial segment should work toward the 2060 target. A necessary first step is the long-awaited nationwide plan for pricing, allocating and trading carbon emission quotas, which will affect the biggest emitters – most notably the power sector – when it starts within the next five years.

“I expect the change to be gradual in the next 10 to 20 years, and there will still be expansion in coal-fired power capacity in the range of 15 to 25 gigawatts over five years, similar to recent years but down from the 40 to 50GW in 2014 to 2016,” said Lucas Zhang Liutong, director WaterRock Energy Economics in Hong Kong. “The Chinese electricity system needs to get a lot of things right before participants can move aggressively on much larger wind and solar power expansion.”

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Despite the fanfare around Xi’s pledge, China’s transition to an economy with low energy intensity is in danger of stalling, as the government doubled down on stimulus policies this year and in 2021 to avert a stalling economy, especially with the coronavirus pandemic still raging around the world.

About 31GW of power plant capacity was approved in the 12 months until October, according to the China Electricity Council, while 19.7GW of coal-fired power plants were given the green light by local authorities in the first half, the biggest investments in recent years.

“Investments in renewables continue, but signs of a return to coal are emerging, a tendency that could strengthen as post-pandemic geopolitics push energy security up the policy agenda,” said S&P Global Ratings in September. “To dig the economy out of its Covid-19 low, planners are approving more infrastructure. Policymakers are stimulating heavy industry, leading to greater energy intensity.”

An array of Sinovel’s 3-megawatt wind turbines at the Shanghai Donghai Bridge Offshore Farm Project on February 22, 2011. Photo: Chinatopix Via AP

The growth prospect for renewable energy will face short-term bottlenecks. The wind power equipment industry urged the Chinese government in October to raise the average annual wind farms installation target in the next five years to 50GW, rising to 60GW after 2025, more than double the 24GW installed last year.

Such a pace may be beyond reach, as Beijing will stop subsidising new onshore wind farms and solar projects from 2021, said Daiwa Capital Markets’ analysts Dennis Ip and Anna Lu. There are also limits in the ability by power grids to absorb the intermittent and variable output from these sources.

“It is hard to achieve such an aggressive target at least in the next five years, as wind power has yet to achieve large-scale grid parity while China will halt subsidies for new installations from next year,” they said. Parity, where the cost of generating wind power matches benchmark coal-fired electricity tariffs in most regions, won’t be reached until 2022 or 2023, they said.

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For solar farms, the generation cost could drop 40 to 50 per cent by 2025, enabling grid parity to become the norm, said HSBC’s Li. Still, a wrench has been thrown into the works by the shutdown of GCL-Poly Energy’s plant in Xinjiangdisrupting the production of polysilicon used in solar panels, causing the price of the raw material to soar 60 per cent in two months. A lack of new capacity until 2022 will put a limit to solar equipment, he said.

“We invest for the future, but it is apparent that there is a long way to go before solar energy is widely used in China,” said Shen, who has solar panels on his roof in Wujiang. “Few people are able or willing to spend 200,000 yuan as an initial investment. A lot more public money needs to be poured into solar energy to encourage wide use. The government should invest for the future too.”

Smoke stacks at a coal-fuelled power station near Datong, in China’s Shanxi province, which regularly ranks near the top with China’s worst air quality, on November 19, 2015. Photo: AFP

Another constraint reining in growth has to do with financial resources.

The government’s decision to stop subsidising wind and solar tariff – financed by a surcharge on electricity bills – was intended to shift the cost burden of renewable energy to coal and gas-fired power producers. The shortfall in the state fund that pays for the subsidies is expected to triple to 300 billion yuan this year from 2018, said China Wind Energy Association’s secretary general Qin Haiyan, who proposed special government bonds to plug the hole.

Developers of renewable projects have to wait between three to five years to receive their subsidy payments, severely constraining their capacity to invest in new projects, especially for privately-owned firms that lack the deep pockets of state-owned companies.

GCL New Energy, a unit of the Jiangsu province-based GCL, was owed 9.2 billion yuan of state subsidies in June, forcing it to appoint a financial adviser to find funds to repay US$500 million of debt due in January 2021. The privately owned company was forced to sell 1.7GW, or a quarter of its projects, for 2.9 billion yuan, as its net debt surged to nearly four times its shareholders equity.

A coal worker on a goods train in the Shanxi provincial capital of Taiyuan in northern China on July 31. Photo: AP

Help may be on the way. An incentive called the “green certificate” trading system, tried on a voluntary basis since 2017 to fund carbon reduction projects, may be rolled out soon, said Global Wind Energy Council (GWEC) strategy director Zhao Feng.

If implemented, renewable energy quotas would be imposed on power generators and major energy consumers, which must buy certificates from renewable energy generators to make up for any production or consumption shortfalls. It was intended as a replacement for subsidies.

Meanwhile, the rush in installing wind farms is expected to continue until year-end to meet the deadline to qualify for subsidies, bringing onshore installations to 30GW this year, GWEC said.

“There are challenges in the supply chain, but … these can be overcome by finding new ways of doing things and new sources of supply,” said GWEC’s chief executive Ben Backwell in Brussels.

With additional reporting by Daniel Ren in Shanghai.

This story, originally published by South China Morning Post, has been shared as part of World News Day 2021, a global campaign to highlight the critical role of fact-based journalism in providing trustworthy news and information in service of humanity. #JournalismMatters.

Has the fuel cell’s day in the sun arrived on China’s road to 2060?

Qingliqingweia two-year-old start-up, wagered last year that its business in hydrogen fuel cells was about to pay off.
China’s government was increasing its drumbeat of policies to direct the nation to go green, cut carbon dioxide emissions and reduce gaseous pollution. Tens of billions of yuan were offered in subsidies, incentives and tax breaks to wean drivers, carmakers and fleet operators in the world’s largest automobile market off petrol-guzzling vehicles.

The Shenzhen-based company rolled out a fleet of 600 lorries in June 2019, each fitted with a hydrogen fuel cell engine, capable of travelling as far as 350 kilometres (217 miles) before refuelling. The vehicles, comprising light delivery trucks and 4-ton lorries, were leased to couriers, logistic companies and garbage collectors.

“It is a near certainty that the government will allocate a huge sum of additional funds to subsidise of hydrogen-powered vehicles,” the company’s vice-president Li Junzuo said in an interview with South China Morning Post in Shanghai. “An increased financial support will facilitate our expansions.”

A hydrogen fuel cell delivery truck showing its fuel cell power train. Photo Qingliqingwei

A little more than a year later, China’s President Xi Jinping pulled a surprise at the United Nationssetting a 2060 target for the country to attain carbon neutrality, becoming the second major economy in the world to put a date on the ambition.

As the world searches for the fine print of Xi’s plan – the implementation details are to be outlined in the country’s next five-year plan in March 2021 – Qingliqingwei is doing a roaring business. Its story underscores how far the Chinese government has put its considerable financial resources behind projects with very long-term, and often uncertain commercial viability.

China offers up to 400,000 yuan (US$60,836) in subsidies per fuel-cell vehicle (FCV) once it runs at least 20,000 kilometres. Fleet operators like Qingliqingwei – a pun on “do it yourself”” that replaces the “self” with hydrogen – get 30 per cent of the subsidies.

For a monthly fee of about 5,000 yuan, the trucks are leased mostly to couriers, deliverers and retailers like and Alibaba Group Holding‘s Cainiao logistics unit. JD.comone of China’s largest online retail platforms, operates 150 FCVs around Shanghai. The trucks, bought for 830,000 yuan each, comes from local manufacturers like Nissan Motor’s Chinese partner Dongfeng Motor, each fitted with a fuel cell engine.

“We serve as a bridge between the upstream vehicle manufacturers and downstream clients using trucks for logistics use,” Li said, adding that Qingliqingwei plans to expand its fleet to 3,500 trucks. “The government policies play a decisive role in the promotion of hydrogen-powered vehicles. Without cash subsidies, none of us can survive the lofty costs on purchases and running.”

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Fuel cells produce power through an electrochemical reaction of hydrogen with oxygen, generating heat and water as the by-products. They are a cleaner alternative to internal combustion engines (ICEs) that burn petrol and spew carbon dioxide, carbon monoxide and other noxious gases. They are also considered more environmentally friendly than electric vehicles that run on lithium-ion batteries, which are hard to dispose of.

Colourless, odourless, non-toxic but highly combustible, hydrogen’s versatility and cleanliness have long made it a desirable alternative energy, except for its high cost since a lot of energy is required to produce the gas sustainably.

The first hydrogen fuel cell was created in 1839 by British lawyer and physicist William Grove, by splitting water into different cells containing hydrogen and oxygen. Hydrogen was also used in the 1960s by the US National Aeronautics and Space Administration (Nasa) to supply power during space flights, since it did not emit heat or pollution into sealed spacecraft.

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Global assemblers of passenger vehicles, sports-utility vehicles, sports cars and luxury sedans have been slow to embrace hydrogen fuel cells, mostly over concern of their limited driving range, and the shortage of hydrogen refuelling stations. Almost all of the 7,200 fuel cell vehicles on China’s roads in July were retrofitted commercial trucks.

That may be about to change, as the European Union, Japan and South Korea – each with a robust car assembling industry – are also looking to hydrogen to help their commitment to carbon neutrality by mid-century.

Toyota Motor, the world’s second-largest carmaker by volume, was the first to launch a commercially viable FCV with its Mirai midsize sedan, first unveiled at the 2014 Los Angeles Auto Show. The 2016 model Mirai could go as far as 502 Km on a full tank, comparable to an electric vehicle. As of December, Toyota sold 10,250 Mirais, 60 per cent of them in the US, and a third of them in Japan.

In September,

SAIC Motor launched its EUNIQ7a seven-seat multi-purpose vehicle that runs on fuel cells, selling it for between 299,800 yuan and 399,800 yuan after subsidies of up to 400,000 yuan.

“After several false starts, the hydrogen economy has reached prime time,” according to a Sanford Bernstein report. “While hydrogen is not yet cost competitive with other energy sources, the anticipated over 50 per cent reduction in hydrogen production cost to less than US$2 a kg and 80 per cent reduction in fuel cell costs [in the next 30 years] will be a game changer.”

A Mirai fuell cell vehicle (FCV) produced by Toyota Motor. Photo: Wikipedia

Fuel cells could make up 10 per cent of China’s energy consumption by 2050, according to the projection by the China Hydrogen Alliance, an industry guild. Bernstein puts it at 11 per cent. To reach that goal, China is aiming to have 1 million fuel cell vehicles on the roads by 2030, served by 1,000 refuelling stations around the nation, according to a road map published in 2016 by an advisory committee of the Society of Automotive Engineers of China.

Such an expanded network would be a game-changer for Wu Dong, who drives fuel-cell trucks for Qingliqingwei.

“The biggest drawback of driving hydrogen-fuelled trucks is the range,” said Wu. “We have to visit the refuelling station frequently. Otherwise, the truck runs as smoothly as one running on an internal combustion engine.”

An undated photograph of a hydrogen refuelling station at Anting in Shanghai’s Jiading district. Photo Handout/Archetype Group

In China’s commercial hub of Shanghai, an experiment has been ongoing for more than a decade to promote fuel cells. At the Anting refuelling station in Jiading district, first set up in 2007, five trucks were queuing up on a recent Wednesday to top up their tanks with liquid hydrogen. Each refuel took about 10 minutes to complete.

Shanghai’s government plans to expand its network of fuelling stations to 100, from the current four, capable of serving as many as 10,000 vehicles by 2023, People’s Daily reported in September, citing Zhang Jianming, deputy director of Shanghai Economy and Information Technology Commission.

And the government is throwing more subsidies at the sector, offering 240,000 yuan for every fuel-cell passenger car, and up to 400,000 yuan per truck. These direct subsidies came to halt in April. To better incentivise the industry to work harder on cost reduction to make hydrogen vehicles more affordable, the government announced a four-year programme in September to subsidise up to 1.7 billion yuan to teams of companies involved all along the chain, from materials to refuelling stations. To qualify, the minimum target is annual sales of 1,000 vehicles, each travelling 30,000 km on average, with annual output of 5,000 tonnes of hydrogen at no more than 35 yuan per kilogram.

The world’s largest carbon dioxide emitters. SCMP Graphics

“This policy offers extra support for domestic technological breakthroughs and manufacturing of core components,” said Western Securities’ analysts Wang Guanqiao and Yu Jiaying. “It especially favours the development of the long-distance and mid-to-heavy duty truck segments that electric vehicles can hardly penetrate.”

Hydrogen is currently produced mainly through chemical processes that break down coal or natural gas, at around US$1.5 for each kilogram of the gas. Once carbon emission quotas are handed down, costly facilities will have to be installed to store carbon dioxide.

It can also be produced through electrolysis, using electricity to split water into hydrogen and oxygen. If renewable power is used, the so-called “green hydrogen” produced is almost free of carbon emission, costing about US$3 per kilogram using renewable energy.

“Existing subsidies and the rental income are not enough to support a wide use of hydrogen-powered vehicles,” said Qingliqingwei’s vice-president Li. “We are expecting the governments to make more preferential policies [to promote hydrogen-powered vehicles].”

China’s annual carbon dioxide emission has picked up after flattening between 2013 and 2016. SCMP Graphics

The average global production cost of green hydrogen is around US$4.7 per kilogram, with China as the cost-leader in the nascent industry, Sanford Bernstein’s analysts said. They estimated the global cost to fall to US$2.3 by 2030 and US$1.4 by 2050.

China is already the world’s largest hydrogen producer with annual output of 21 million tonnes, just over half used by oil refineries mainly to lower the sulphur content of diesel fuel. Output could triple to 60 million tonnes by 2050.

China is not the only country pursuing green hydrogen, whose global production could surge seven-fold by 2070 from last year’s 75 million tonnes, according to the International Energy Agency.

Several companies – most notably with projects in coastal desert regions in Australia and Saudi Arabia – are studying feasibility of green hydrogen and ammonia plants with targets to start production by the mid-2020s. They include the oil and gas giant BP and US industrial gas giant Air Products & Chemicals.

Battery cost and range of electric vehicle projections. SCMP Graphics

Fuel cells may also benefit from a mandatory nationwide carbon emission quota and trading scheme due in the next few years, which will result in higher costs of diesel and petroleum used by trucks.

For the pioneers and early adopters of hydrogen fuel cells, their day in the sun has finally arrived. Yu Zhuoping, dean of the College of Automotive Engineering at Shanghai-based Tongji University, was a partner with the Shanghai government in developing the city’s first refuelling station a decade ago.

“It was only a pilot programme to develop hydrogen-powered vehicles and refuelling stations at a rudimentary stage,” he said. “But since clean energy use is of strategic importance now with massive government support, we will naturally see a rapid growth of the industry soon.”

Still, subsidies are needed to promote the use of the clean energy.

“Without a scale, no businesses will be able to make profits or break even,” he said. “It will be some time before government subsidies to support the operation of the vehicles and stations are cancelled.”

This story, originally published by South China Morning Post, has been shared as part of World News Day 2021, a global campaign to highlight the critical role of fact-based journalism in providing trustworthy news and information in service of humanity. #JournalismMatters.