A Single Parking Space in Hong Kong Sells for $1.3 Million

Parking has been getting more expensive, especially in New York and other cities, but Hong Kong has them all beat.

• $1.3 million is the new record for world's most expensive parking space, but it isn't that much higher than the previous record, which was set at $980,000 in 2019.
• Both of those pricey car resting areas were in Hong Kong, which has some of the most expensive homes in Asia. One eye-popping location was recently rented out for a cost of $210,000 a month.
• Hong Kong has been dealing with rising real estate prices for years, but looking back at the city's claim of the "world's most expensive parking spot" in 2012, it seems like a bargain now at just $387,000.

In some places, parking a car is free. Or maybe it costs a few quarters. But in Hong Kong, it could cost you $1.3 million. It's one of the few places where the pavement a McLaren Senna sits on is worth more than the vehicle itself.

South China Morning PostGetty Images

Granted, $1.3 million is the price to buy the space outright, which someone recently did, according to the BBC. The spot is part of an ultra-luxury residential development called The Peak, located on Mount Nicholson. The BBC said this is where some of the most expensive homes in Asia are located, and other parking spaces there were also sold recently. Their prices were not recorded, perhaps because they were going for the discount rate of $1.29 million. The owner of The Peak, Wheelock Properties, did not respond to the BBC's request for comment, but to get a sense of the wealth concentrated there, the BBC said that one of its houses was rented out in May at a cost of $210,000 per month. That's $2.5 million a year to not own a home.

Every few years, the "most expensive parking spot" record topples because another, more absurd price has been agreed to somewhere. In 2012, the reported first million-dollar parking spot was part of some luxury condominiums in lower Manhattan, for example. The record that the Hong Kong spot just beat out was another spot in that city, which sold for just under a million dollars, $980,000, in 2019, according to Bloomberg.

Hong Kong has seen its parking costs rise like mad over the last decade. Back in 2012, Bloomberg noted that prices to buy parking spaces in Hong Kong—average residential parking spaces, not just at luxury developments—had climbed to $82,600 as the government put the brakes on home buying and rich people needed a place to put their money. Back then, the headline number for "this is the world's most expensive parking spot," was $387,000.

Parking spaces can be expensive all over the globe. In 2016, the Los Angeles Times noted that an "extra-exclusive private garage" called The Vault at the Bighorn Golf Club in Palm Springs, California. charged $110,000 for membership and $6500 a year to park there, plus a $250,000 fee to join the club and play golf there. In 2017, The Sun reported on a 400,000-pound ($566,000) underground parking space, but at least it could fit three cars and was located next to the Royal Albert Hall in London.

Despite three-child policy, many in China can’t afford more kids

As China allows married couples to have up to three children, boosting birth rates could collide with cost of living, education and mobility constraints.

China’s fertility rate slowed to 1.3 births per woman in 2020 and looks likely to hover around that rate unless authorities in Beijing ease pressure on working families [File: Qilai Shen/Bloomberg]

Shenzhen, China – On a sweltering June afternoon in a quiet corner of Lianhuashan Park at the heart of China’s high-tech showcase city of Shenzhen, 25-year-old Mr Ling is engaged in the decidedly low-tech activity of browsing advertisements for potential partners.

Men get light blue cards, women light pink, grouped by decade of birth. The cards hang stiff and impersonal from hundreds of wires in the circular “Matchmaking Corner” structure built by the municipal government, whose offices are a quick walk away.

Like many younger men and women living in Shenzhen without official residency in the city, Ling faces chances of finding a wife, starting a family, and actually staying in the city long-term that are slim – even if he’d prefer to take that course.

“The biggest issue is work and having enough money and getting a house,” he said. “I have a few friends who used to work in Shenzhen but have now moved to other areas. The cost of living puts too much pressure on them.”

Ling’s hukou – China’s internal family registration system – ties most of his health and social insurance, as well as his future children’s education, to a rural village in Shandong province far to the north, the place of his birth.

Ling, who did not want his full name used to protect his privacy, works as a real estate agent. But the job entails little beyond answering phones, escorting potential buyers to properties, with little chance of upward mobility.

As China moves to allow couples to have up to three children, it is increasingly clear that the government will need to address the needs and concerns of people like Ling who would like to start families and have children but are pressured by a lack of education, living costs and barriers to movement such as the hukou system – realities of life in China that are dissuading many working couples from contemplating the idea of having more than one child, let alone two or three.

A lack of education, living costs and barriers to movement such as the hukou system are realities of life in China that are dissuading many working couples from contemplating the idea of having more than one child, let alone two or three

‘How can we take care of nine?’

An online survey circulated in early May in China found that slightly over half of young people don’t want to have one child, let alone a second or third.

One reason is the cost of buying a house. Most men feel they need to have property before proposing marriage, so that is a major premarital barrier for a man and his extended family, which often helps pay for that first house. Others included concerns over who would take care of the children, the high cost of education and after-school programmes, point systems in first and second-tier cities that determine if a child can get into a local school or not, and changing mindsets among younger people who want to pursue individual dreams that don’t revolve around creating a family.

Women – who shoulder the lion’s share of childcare – are also increasingly less willing to have a second child after becoming exhausted from looking after their first.

One remark that circulated on Chinese social media the hours after China announced the move to a three-child policy on the final day of May was of a couple saying: “We already have to take care of a family of eight, how can we take care of nine?”

Translation: Working-age couples in China often have to take care of themselves as well as two sets of parents who don’t have much income from savings or pension plans if any, plus any kids they already have.

Though the parents of such workers often do help with home and childcare, the costs associated with healthcare as they age – along with child-rearing costs – are a huge burden.

China’s fertility rate slowed to 1.3 births per woman in 2020 and looks likely to hover around that rate unless authorities in Beijing ease pressure on working families. While those authorities say efforts to improve policies related to maternity leave and insurance, as well as to strengthen tax and housing policy support, are under way, most working parents in China are not getting their hopes up.

Government benefits that were rolled out after China eased its one-child policy in 2015 failed to reduce financial burdens and increase birth rates significantly [File: Akio Kon/Bloomberg]Benefits rolled out after the one-child policy was eased in 2015 failed to reduce burdens and increase birth rates significantly.

Chang Qingsong, an associate professor at the Population Research Institute of Xiamen University, believes the government should go further and remove the limits entirely so families can decide whether they want kids or not.

“The Chinese government could loosen the limit on the number of children that a family can have, and provide maximum support to the families who have the ability and conditions to have more babies,” he told Al Jazeera.

“Instead of prescribing how many children they can have, the government needs to reduce the burdens on families to increase their intent to give birth,” he said. “Predictably, even if couples were allowed to have a third child, most couples would not.”

Moving the needle

Failing or stagnant birth rates might not mean all that much at this moment, but as China’s population ages rapidly, economic growth could take a hit as the labour force shrinks 15 years from now, according to a note from Yue Su, principal economist with The Economist Intelligence Unit.

The new three-child policy could also have further negative short-term impacts on women, she wrote, with companies assuming women would want more children and potentially opting to hire men instead in order to dodge maternity costs and time away from work.

Failing or stagnant birth rates might not mean all that much at this moment, but as China’s population ages rapidly, economic growth could take a hit as the labour force shrinks 15 years from now [File: Qilai Shen/Bloomberg]Ashton Verdery, an associate professor of sociology and demography at Penn State University, said it appears that the three-child policy is more of a reaction to the recent census data showing China has a rapidly aging population and is fast closing in on its peak population, but a detailed policy to try to address the pressures could come later.

“I wouldn’t be surprised if they pivot towards some sort of special credits that people get for having more children or other policies that ease the challenges of having more children,” he told Al Jazeera.

For example, Chinese authorities are reportedly encouraging some regions to trial parental leave schemes.

“I could imagine that China may build more housing that is friendly for larger families and things like that,” he said. “The Chinese state has much greater involvement in the economy and therefore might be able to move the needle a bit.”

For Scott Rozelle, a development economist and a co-director of the Rural Education Action Program at Stanford University, China’s demographic problem is not so much about quantity as it is about quality.

Much of that lack of quality in the labour force is because China has failed to provide education for all youth through high school, particularly in rural areas.

Research shows early indications that the birth rate decline is largely coming from rural areas of China primarily because women there do not feel their families could support more than one or two children [File: Qilai Shen/Bloomberg]Without raising the education levels of rural children and re-educating those rural hukou holders who didn’t make it through high school, simply having more children isn’t going to solve China’s looming labour problems and keep it from finding itself in a middle-income trap like Mexico or Brazil.

“The quality of people really matters in this post-industrial world,” Rozelle said. “If you don’t have a high school education, you’re not going to do well in online sales, you’re not going to be able to start a business.”

Recent research Rozelle has conducted shows early indications that the birth rate decline is largely coming from rural areas of China primarily because women there do not feel their families could support more than one or two children.

“My hypothesis is that the big fall in fertility has basically come from rural China in the past 10 years,” he told Al Jazeera. “Women now have so much more decision-making power over critical decisions like family size.”

China is currently putting into place a major policy for rural revitalisation across the country, but most of it is focused on agriculture and infrastructure programmes, rather than education, health and social welfare.

Rozelle said surveys of rural families over the years find that while they appreciate many of those infrastructure upgrades, for most the priority boils down to one thing: education.

“It’s coming where we aren’t going to need big quantities of labour to run our societies, what we need is high-quality labour,” Rozelle said. “So does rural revitalisation need to include education? Absolutely.”

China Is Trying to Tame Inflation. It Matters to Much of the Globe.

Rising costs at its factories — an accelerating trend, new data showed — could trickle into the rest of the world economy.

A port in Lianyungang, Jiangsu Province, last year. Beijing has discouraged steelmakers from raising prices.Credit...China Daily, via Reuters

SHANGHAI — Prices are jumping in the United States and around the world, prompting growing warnings that a wave of inflation could threaten the global economy if it persists.

China isn’t waiting to find out.

Beijing is moving swiftly to protect its factories and workplaces from rising costs. It has discouraged steel makers and coal producers from raising prices. It has vowed to investigate price-gouging and hoarding. And it has allowed its currency to rise in value to a level unseen in years, giving it a more valuable and powerful tool for buying up the world’s grain, meat, petroleum, minerals and other essentials.

Rising prices in China, by far the world’s biggest manufacturer and exporter, could be felt around the world. China’s statistical agency announced on Wednesday morning that prices charged by factories, farmers and other producers had soared 9 percent in May compared to a year earlier, when the pandemic was holding down their costs. It was the biggest increase since September 2008.

Annabelle New York, a Manhattan-based importer and distributor that sells down-filled parkas and other high-end apparel to department stores and other retailers, already raised prices 10 percent this spring. But the company’s costs for merchandise from China are up 20 percent, said Bennett Model, the company’s chief executive and president.

Chemicals to make the parkas’ synthetic fabric shells have become costlier as world oil prices rise. Down feathers, for which China is the world’s dominant producer, have become more expensive. And trans-Pacific freight costs have tripled for some shipments as air cargo companies and shipping lines have struggled to keep up with demand.

Only the fear of losing customers has prevented Mr. Model from passing along all these higher costs to American stores. He has accepted narrower profit margins instead.

“If I really wanted to cover all the increases, the price would be prohibitive right now,” he said.

It’s far from certain that the current bout of global inflation will last. Many economists believe price increases will moderate once companies clear supply bottlenecks caused by factory closings and other measures taken during the coronavirus pandemic.

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A Shanghai market. The authorities have long used informal price measures on food.Credit...Keith Bradsher for The New York Times

But China has clear reasons to fear inflation. Its breakneck economic growth over recent decades has periodically been accompanied by surging prices that provoked anger across the country. Rising prices contributed to the demonstrations in Tiananmen Square in Beijing in 1989. The authorities have long used informal price controls and subsidies to prevent rising costs from being felt in China’s supermarkets and at the family dinner table.

For some goods, prices are indeed rising. Paper manufacturers have raised bulk volume prices for products like napkins and toilet paper four times this spring. Soybeans for tofu are becoming costlier.

But for now, Chinese manufacturers, rather than consumers, are feeling the price increases. Costlier iron ore from Australia and corn from the United States account for much of the rise.

China’s cabinet announced subsidies a week ago for small businesses to help them afford spiraling costs for commodities. New limits have been imposed on the trading of commodities for future delivery to discourage speculation. Export taxes have been raised on some kinds of steel to keep more of the metal inside China.

At a cabinet meeting on May 19, Premier Li Keqiang ordered officials to “resolutely crack down on monopoly and hoarding in accordance with laws and regulations, and strengthen market supervision.”

Government measures may slow but not stop wholesale price increases. Companies stuck with rising costs for raw materials eventually find ways to raise prices or else just suspend production. Paper producers, trapped between surging costs for raw pulp and a variety of pressures not to raise paper prices, have shut down some of their factories for maintenance this spring.

So far, price increases don’t appear to be trickling down to China’s consumers. China’s consumer price index was only 1.3 percent higher in May than a year earlier.

One reason is that the Chinese domestic economy has not yet fully recovered from the pandemic. Lackluster consumer spending means fewer households are bidding up the prices of goods like pork chops, which have become a little cheaper lately, and even men’s underwear, for which prices have not changed.

Vendors at a covered market in Shanghai said on a recent afternoon that they saw no sign yet of rising food prices. Egg and beef prices, for example, were little changed.

“The cost of living hasn’t changed much, the price of green vegetables is always” about the same, said Yang Yuxia, who has been selling eggs from chickens, pigeons and other birds at a stall there since 1998.

But merchants for foods that are not staples were already watching warily for price increases by their suppliers.

Gao Hong, who sells freshwater eels and shrimp in Shanghai, said she fretted about price increases.Credit...Keith Bradsher for The New York Times

“Of course I’m worried about the price going up — if the prices go up, I will have fewer customers,” said Gao Hong, a vendor of freshwater eels and shrimp at a store across the street from the market.

China’s consumers are also protected by the country’s surplus of factories that make essentials like clothing and household appliances. The overcapacity ensures that shoppers have plenty of competitors to choose among. That makes it hard for manufacturers to pass along price increases to buyers.

“Along the supply chain, whoever has less negotiating power will bear more cost,” said Wang Dan, the chief economist at Hang Seng Bank China. In China, the companies at earlier stages of supply chains tend to have less bargaining power than retailers and consumers.

China’s higher prices could spread abroad, however. The country’s leaders are trying to address the threat of inflation in part by letting its currency rise in value.

The renminbi is near its strongest point against the U.S. dollar since mid-2018. A dollar now buys about 6.4 renminbi, versus more than 7.1 about a year ago.

The renminbi has risen 2.2 percent against the dollar since the start of this year, making each only a fraction of a penny more valuable. But China spends huge amounts of money on resources priced in dollars — $176.2 billion just for crude oil imports last year, for example, and an additional $50.8 billion for grain imports. Those pennies add up quickly.

China’s currency has long been a hot-button political issue. American lawmakers and officials over the years have accused Beijing of unfairly keeping the currency weak to give the country’s exporters a competitive advantage in foreign markets.

But in this case, Chinese officials have simply sat back and let global forces make the currency stronger. As the United States has borrowed and spent heavily in recent months to counteract the economic effects of the pandemic, the dollar has started to slide against many currencies, including the renminbi but also the euro.

“The appreciation of the renminbi is driven by the good performance of the Chinese economy,” said Gary Liu, an independent economist in Shanghai. “The U.S. is now producing too much money supply, and as a result the dollar is going soft.”

A stronger currency has its downsides, however, and Chinese officials appear to be stepping in to halt further increases. The stronger currency makes Chinese goods less appealing in other markets. For now, the world seems happy to keep buying Chinese made goods anyway. Still, the People’s Bank of China warned currency traders on May 27 not to think that further appreciation was a one-way bet.

In the meantime, the stronger renminbi could push up the price of Chinese-made goods in the United States, adding to price pressures there, though in mostly moderate ways.

A U.S. Bureau of Labor Statistics index of average prices for imports from China shows that prices fell about 2 percent from the summer of 2018 until the start of the pandemic and then leveled off. Now those prices have jumped 2 percent since November.

“Is China exporting inflation?” said Louis Kuijs, a China specialist at Oxford Economics. “In renminbi terms, it’s not so obvious. But in U.S. dollar terms, it starts to get more sizable.”