Hong Kong Financial Reserves Only Enough for Nine Months! 900 Hectares of Developed Land Must Be Created Even If It Cannot Be Sold, Fully Backed by the Hong Kong Government, Borrowing to Create Surpluses While Diverting 150 Billion from the Exchange Fund, Changing Rhetoric Like the Chinese Communist Party If Targets Are Not Met, Poorest 10% of Households Earn Only 1600 HKD a Month! Officials Get Credit, Ordinary People Foot the Bill

The video focuses on the first five-year plan announced by Hong Kong in 2026, with a key analysis of the binding target of producing 900 hectares of developed land in the Northern Metropolis between 2026 and 2030. It argues that the risks related to land supply, infrastructure, and debt pressure may ultimately be borne by fiscal reserves and taxpayers. The video also examines Hong Kong's fiscal reserves, debt issuance, the Exchange Fund, land premium revenue, office vacancy rates, wealth inequality, fraud cases, and changes in government statistical methods, comparing official economic data with the realities of public income, poverty, and the investment environment.

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Full transcript:

Be truthful to me, refuse casual cognition. On the morning of September 16, 2026, at 11:00 AM, that fucking idiot John Lee announced the first five-year plan in Hong Kong's history at the Legislative Council. It consists of 7 parts and 28 chapters, totaling over 60,000 words, and includes 22 major indicators, 5 of which are binding.

Immediately after announcing this plan came that particularly surreal policy address. From my perspective, how do I see it? I really think it's fucking surreal. Now let's look at how a free port that started by the government doing nothing is step-by-step moving the burden of who pays for mistakes from the market into its own fiscal ledger, and that totally fucking awesome paradigm—my mom, it looks like a CCP operation at first glance.

Let me state the conclusion first. What is the most interesting line in these 60,000 words? It is the binding target of producing 900 hectares of developed land in the Northern Metropolis over five years. Why this one? Because the three words "binding target" mean it must be completed. What is this thing? Or what is its political significance? It means that once a supply figure is given political significance, the government institutionally abandons the option of not developing the land if it cannot be sold. This is equivalent to giving a guaranteed commitment to all counterparties in the Northern Metropolis, effectively saying that regardless of whether the area is suitable for planning or can be developed, the Hong Kong government will take it on. The underwriter of this commitment is Hong Kong's fiscal reserves. And how much is left in the fiscal reserves today? We will calculate that in a moment.

Do you see the logical dependency here? What is a market economy? It means land is put on the market; if you like it, you buy it; if you don't, you don't. The resources are just sitting there. If the market recognizes it, it has value; if the market doesn't, it's worthless. In other words, how resources are utilized and at what cost is entirely determined by the market. But what is the essence of a five-year plan? It's when some fucking idiot pulls an idea out of their ass, saying, 'Oh, this plot of land is good, let's set a target for it, and this target must be met—it has to be met regardless of whether there is actual demand for the land's development or whether the resource utilization is reasonable. That number pulled out of thin air must be achieved. What if it doesn't meet market demand? The answer is total consumption, paid for by the Hong Kong government. And what are they paying for? To put it bluntly, it's a fucking idiot's abstract administrative number, and the political will behind that administrative number. Then, they use a piece of land and an abstract number to prove what? To prove the government's capability. This is why the cost of governance under the CCP is always so high. On one hand, land resources are wasted; on the other hand, the waste of land resources isn't the only loss—there's also the loss from spending money on administrative numbers that have no practical meaning. Because at this stage, it becomes a judgment of whether the government is capable based solely on whether this number is met, rather than maximizing the benefits for all market participants. This is why those who engage in a planned economy never end well, because these targets pulled out of thin air are just numbers built on waste; they have no practical meaning. Let's continue.

Now, regarding the planning of this fucking idiot government in Hong Kong, first, let's talk about the land supply issue. Looking at their plan, it's basically pulled out of their asses. Let's look at what 'developed land' is: land that is leveled, with water, electricity, and buildings connected, ready to be auctioned off for construction. In the Northern Metropolis, from 2021 to 2026, these five years, a total of only 120 hectares of developed land were produced. Yet, what does the Hong Kong government's fucking idiot five-year plan demand? It demands the production of 900 hectares from 2026 to 2030, a cumulative increase of seven and a half times. I couldn't even dream up this kind of bullshit. Furthermore, this five-year plan states that no less than 200 hectares will be produced in the next two years. So I have to ask: can this fucking idiot John Lee give birth to land? Where is the remaining 700 hectares? Then I look at it, and it's all piled onto the three years from 2028 to 2030. It's elementary school arithmetic: 700 divided by 3 is 233 hectares per year. In other words, from 2028 to 2030, they have to increase land supply at a rate nearly double the total of the past five years every single year. I want to see if this guy John Lee can actually give birth to land. Moreover, this is purely a supply indicator; there isn't a single number in this plan telling you who this 900 hectares is to be sold to or how it will be used. In other words, they haven't even calculated or provided a single indicator for the demand side.

So why do I say a supply indicator is equivalent to a bottom-line guarantee? Let me break this mechanism down for you step by step. The Hong Kong government writes down these 900 hectares of land as a hard task. And what is the economic premise of this hard task? It's that the land in the Northern Metropolis can be auctioned off at a reasonable price, right? Therefore, a normal government cannot tolerate the price of land in the Northern Metropolis falling to a level where leveling the land is no longer cost-effective. Because once the land price falls, the premise of the hard task collapses. At this point, developers know the government cannot stop. Once the pricing contains this information, when developers make their bids, they factor in the fact that the government cannot stop. Take the tender for the first phase of the Hung Shui Kiu development project this month: the consortium led by China Overseas Land & Investment won the bid. What was the land price? 1.03 billion HKD. What was the requirement? The winning consortium must bear the land leveling and infrastructure investment costs of 16.8 billion HKD. Just think about this ratio: 16.8 billion in work for a fucking 1 billion land price. The net land price after deducting infrastructure obligations is fucking close to zero. So what the Hong Kong government is getting isn't real money, but a promise of electronic construction from these state-owned enterprise-backed developers. Trading real land for fucking electronic construction? This is truly fucking surreal. Is this really Hong Kong?

And what is even more ridiculous? Although this plan is from early September, Fubi actually finished buying it in February of this year. How did they bury it? The Hong Kong government came up with another bizarre regulation. What is this regulation? This budget plan is also equipped with a floor price and installment payments. This plan means that these CCP-affiliated enterprises can use the floor area of the buildings to be constructed in the future to offset this land price; that is, they use construction costs to offset the land price. If you put these things together, what does it mean? It means that the downside risk of this project has been moved from the developer's balance sheet to where? To the balance sheet of the SAR government. In economics, this is called soft budget constraint, meaning these central state-owned enterprises know perfectly well that even if they lose money, they have nothing to fear because someone will bail them out. At this point, cost discipline will vanish completely. So you see, in a broken planned economy, every link produces huge waste, and in the end, you can be sure that it will all be passed on to the taxpayers without a single cent missing. So what is the essence of the five-year plan? It is using taxpayers' money to pay for administrative figures without any cost constraints. This is why CCP bureaucrats have money; it is by using their shape to suck the blood of the market. This is the essence of this thing.

Does the Hong Kong government have the capital to bail them out? Let's look at the data. Hong Kong's fiscal reserves were over 1.17 trillion HKD in March 2019, equivalent to 28 months of government expenditure at that time. Then, in the following 6 fiscal years, 5 of them were in deficit. From 2020 to 2021, the annual deficit also broke records, directly hitting a deficit of over 230 billion. The cumulative deficit over 6 years was over 550 billion. By March of this year, the fiscal reserves were left with only 650 billion. In other words, in 6 years, they squandered nearly 50% of the Hong Kong government's fiscal reserves. Then, from 2026 to 2027, what is the total planned expenditure of the Hong Kong government? It is 840 billion. Dividing this total expenditure of over 840 billion by 12, it is about 70 billion per month. Then, dividing that 650 billion by 70 billion, that means they can only spend for about 9 more months. Former Financial Secretary Antony Leung once set an unwritten rule. What was this rule? It was that the reserves must be enough for the government to survive for 12 months with zero income. This bottom line has been completely fucking broken through this year.

But is that the end of it? Not yet. Even if the Hong Kong government has squandered a full 50% of its fiscal reserves in 6 years, looking at the 650 billion on the books, a considerable part of that 650 billion is fucking borrowed money. In the 2025-26 fiscal year, Hong Kong issued a total of 155 billion HKD in bonds. The budget plan is also fucking awesome; it directly included bond issuance as revenue. After deducting the 51.7 billion in maturing debt, the originally estimated 67 billion deficit turned into a 2.9 billion surplus. What the fuck does this mean? It means they even managed to borrow their way into a surplus. Let's look further ahead. The budget plan states very clearly that in the next 5 years, 160 billion to 220 billion in bonds will be issued each year, totaling 970 billion in debt over 5 years. The ratio of government debt to local GDP will soar from about 12% at the beginning of 2026 to 20%. This is the third time the bond issuance ceiling has been raised to 900 billion. Someone in the government asked, is the Hong Kong government now living on debt? How did Paul Chan answer it himself? He said that the debt borrowed in the past needs to be repaid when it matures, and about half of the future bond issuance is used to repay old debt and interest. What is the other half of the new debt doing? It is rolling over old debt, and what is the other half doing? It is filling in infrastructure. The assets corresponding to the infrastructure are the land in the Northern Metropolis, and the income corresponding to the land in the Northern Metropolis is still the land price that has not yet been realized. This land price is still being offset by the construction funds of the CCP-affiliated enterprises. And these funds have no cost constraints. You all see this payment chain, right? There is another sum of money that, in my opinion, is simply fucking disastrous for future generations. The 2026 budget announced what? It announced that within two years, 150 billion will be transferred from the Exchange Fund to be injected into the infrastructure reserve. This is the first time since 1984 that the Exchange Fund's money has been used to pay for fucking engineering projects. What is Hong Kong's Exchange Fund for? The Exchange Fund is to support the Hong Kong dollar linked exchange rate. Using the Exchange Fund's money to pay for the Northern Metropolis is, in fact, equivalent to what? It is equivalent to cutting off a large chunk of the buffer chain for the Hong Kong dollar linked exchange rate. So who is really messing up Hong Kong? Let's not look at the slogans, let's look at the numbers. And these numbers are what the Hong Kong government itself released.

How did such a wealthy and well-resourced Hong Kong government reach the point of having to borrow money and even tap into its exchange fund? It is because the old model of Hong Kong’s public finances has completely died. What was the old model? To put it bluntly, this model relied on land revenue to pay for infrastructure and tax revenue to pay for daily expenditures, while fiscal reserves were meant to smooth out economic cycles. Land premium revenue in the 2021-2022 fiscal year was HKD 143 billion, accounting for 24% of total revenue. Just the single commercial plot at the Central harbourfront sold for HKD 50.8 billion. By the 2026-2027 fiscal year budget, land premium revenue was left at only HKD 18.0 billion—yes, you heard that right, only HKD 18.0 billion. Plummeting all the way from HKD 143 billion down to HKD 18.0 billion, a staggering drop of 82.7%, falling even harder than the Chinese Communist Party's land-based fiscal revenue. Its share of total revenue also plunged in one breath from 24% down to 2.4%, a drop exceeding 90%. The Hong Kong government did make some efforts in between, but these efforts were not very successful. A few notable things happened: a luxury residential plot on Cape Road in Stanley, valued at over HKD 20 billion, failed to sell entirely; residential land in Tung Chung East was also unsuccessful in bidding. After a round of efforts, this term of the Hong Kong government simply gave up lying flat and stopped pushing residential land plots for an entire quarter. Land revenue is gone, so what is stepping up to take its place now? It is stamp duty. The stamp duty revenue in the 2026-2027 budget is projected at HKD 101.0 billion. What does stamp duty rely on? It relies on the trading volume of the Hong Kong stock market. And what does the Hong Kong stock market's trading volume rely on now? It relies on northbound mainland capital and IPO fundraising. Even the model has switched to align with the Chinese Communist Party, replacing land finance with securities finance. Alright, continuing onward: even if this fucking idiot Li Dagang truly has supernatural powers and manages to conjure up these 900 kilograms of land, who is he going to sell them to? Hong Kong itself has already answered this question once before. The answer is Kowloon East. Back in 2011, the Hong Kong government personally planned and launched the Kowloon East project. What was its positioning? It was positioned as the second core business district. The entire process involved land leveled by the government, infrastructure built by the government, and names promoted by the government. By April of this year, according to data from JLL, the vacancy rate for Grade A office buildings in Kowloon East rose to 20.7%, making it the area with the highest vacancy rate across all of Hong Kong. In 2025 alone, rents in Kowloon East fell by 7.9%, and Island East fell by 10.5%. Let's look at the data from CBRE: by the end of 2025, the vacant floor area of Grade A office buildings across Hong Kong was 15.9 million square feet, which translates to 1.48 million square meters. The overall vacancy rate reached 17.3%, hitting a historical high, and only fell back to 16.1% in the second quarter of 2026. In a market where 1.48 million square meters are already sitting empty, there are plans to create another 1 million square meters, and office building prices in Hong Kong have already fallen by nearly 60% from their peak. Now you know what it means to pay the price for the delusional whims of idiots.

The funniest part is this: didn't Hong Kong come up with a set of 22 indicators? If you look at how these 22 indicators were actually created, that part is the most amusing. What does this plan require? It requires the total expenditure on local innovation activities as a percentage of the local GDP to rise to 3% by 2036. We have talked about this before, and we will continue to talk about it today. Pay attention to the term "total expenditure on innovation activities"; this definition was just established in June of this year. The previous definition was "total local R&D expenditure," which is a common international standard. Under the old definition, Hong Kong maintained a long-term growth rate of around 1.1%. The 1.5% target set by the previous administration was never met. When the Secretary for Innovation, Technology and Industry, Sun Dong, took office in 2022, he even said they should be "realistic" and strive to reach that 1.5% ratio during his term. The new definition of R&D now includes enterprise product design, software development, process verification, product testing, and even intellectual property application. By 2024, with this calculation, it reached 51.7 billion, accounting for 1.63%. The same tactic has already been used once in the manufacturing sector. On April 9, 2025, the Innovation and Technology Bureau and the Census and Statistics Department merged product design, data services, software development, and even fucking testing, certification, and professional technical services into a new category called "manufacturing and new industrialization." After merging the categories in 2023, the value-added became 76.8 billion, accounting for 2.6%. Yet, the Innovation and Technology Blueprint from December 2022 promised that the manufacturing sector's share would increase from 1% in 2020 to 1.5% in 2025, and then to 5% by 2030. The 1.5% under the old definition hasn't even been met by 2025, so the baseline was just changed to 2.6%. This is a traditional CCP specialty: what to do when the data doesn't meet the target? Hey, there's a way—change the definition. What if the unemployment rate is too high? Hey, change the definition again; if that doesn't work, just stop publishing the numbers. The Hong Kong government does that too, but I'll talk about that later. And these fucking idiots in the Hong Kong government haven't even mastered elementary school arithmetic. The plan itself writes that the annual growth rate is 10%. Let's do the math: even if I hold my nose and accept this 1.63% that Hong Kong is bragging about, and use this number as the base, and calculate it with a 10% annual growth, and assume Hong Kong's nominal GDP grows at the 4.5% rate the Hong Kong government is bragging about, according to this calculation, by 2030, the ratio would only be about 2.2%, which is still far from the 3% target. As for manufacturing, starting from 2.6% and using the same calculation, by 2030 it would only be about 3.7%, nearly two percentage points short of the 5.5% target. You see, these targets were written by the same people, yet the two numbers contradict each other mathematically. Unless these fucking idiots are assuming that Hong Kong's nominal GDP will stay fucking stagnant for six years—if it stays stagnant, then it could achieve this effect. Could it be that this exposes the real thoughts of these people in Hong Kong? This time, I also saw the Hong Kong version of the CCP's "eight-legged essay." In the CCP's fucking five-year plan, there is something called "coordinating development and security." In Hong Kong's policy address, there is also a section on "coordinating security and development." Yes, it even mentions that brain-dead "new quality productive forces" bullshit. Even this concept is just copied from the mainland. Actually, the current government has been doing this for a long time, like the "low-altitude economy," which was also proposed by the CCP in 2024—wasn't that low-altitude economy destroyed after a plane crashed? Then there's the Northern Metropolis, which planned three industrial zones in one go. And what else? It's that mindless "patriotic education." And this fucking thing appears openly where? In the Policy Address. This supporting report for the policy address requires designating the Yan'an Revolutionary Memorial Hall as the second youth patriotic education base for China in Hong Kong. If you take all these pieces of garbage—whether it's the low-altitude economy or that trashy patriotic education—and look at them based on the number of activities and media exposure, you won't find a single one that is self-sustaining. Hong Kong's true comparative advantages are the common law system, the free flow of capital, and the freedom of information. But in the 22 indicators proposed by this incompetent government, they all appear in qualitative terms like "strengthening global leadership." Not a single one is quantified. The only things quantified are the number of students and tourists, and even those numbers fucking contradict each other.

Some friends might ask, is it okay for the government to step in and invest directly? We can tell by looking at two companies. I haven't talked about this before, so let's look at the first one: the Hong Kong Investment Corporation (HKIC). It manages 62 billion HKD and, as of the end of June this year, has invested in over 200 projects. They reported an internal rate of return (IRR) of 14%. Recently, I've found it quite strange—why is everything 14% now? Temasek in Singapore has an average return of 14%, then Huijun is also 14%, and now Hong Kong is also 14%. They are all financial institutions; one announces a return, and the others follow suit, right? Why is it no longer 5% but 14%? It's quite strange. What they report is that every dollar they invest leverages 8 dollars of market capital. However, this department is interesting: they cite "commercial sensitivity" as a reason to refuse to disclose to the Legislative Council or the public the names, amounts, shareholdings, or even exit times of individual projects. In February this year, Paul Chan already announced that the 62 billion HKD had been largely allocated, and the government would inject more capital in due course. In other words, the returns on the first batch of 62 billion have not been confirmed by any external audit, yet the second batch of money is already on the way.

The other one is the Hung Shui Kiu New Development Area company. The initial capital injection was 10 billion HKD. The company's chairman, Lam Kin-fung, said this month that this 10 billion is currently mainly sitting in the bank earning interest. This is also quite funny: an institution established with the purpose of replacing the market to allocate capital, after being set up, just puts all the money in the bank. But to be honest, at least I think this institution has a bit of a conscience; it's actually a bottom line not to invest in projects. Otherwise, if they really invested in those fucking projects recommended by the CCP, they would definitely get screwed every single time.

Furthermore, look at another thing: the difference in the caliber of officials in Hong Kong's history. How did John Cowperthwaite act when he was Financial Secretary? He refused to compile certain statistics or set certain targets for Hong Kong because he had a very classic saying: he said that once officials have numbers in their hands, they can't help but want to do something, yet officials lack the knowledge required to do those things. And what is the "Five-Year Plan" doing? It is replacing "highest bidder wins" with a "dual-track system." In plain language, the bidding process no longer looks at who offers the most money, but whether officials judge your industry to be "aligned." Look at these fucking things the Hong Kong government is doing: compressing the nine-month statutory official procedure into two months, and turning the government from a seller into a shareholder of the park company. Price signals are being dismantled one by one. And what happens after they are dismantled? A signal disaster, because after dismantling them, the government itself doesn't know if it's right or wrong and can only rely on changing the narrative.

Let's look at the lives of the Hong Kong people. Is it as good as the Hong Kong government's bragging numbers? It can be said that the Hong Kong government reports one set of numbers, while the common people live through another. The Hong Kong government is now learning from the CCP, and it's so similar—the numbers they brag about are so beautiful. Let's first look at the Hong Kong government's bragging numbers: they say that in the first half of 2026, the real GDP grew by 5.1%, the strongest in the last five years, and the unemployment rate is only 3.7%. There are also things like 1.61 million local production companies, a new record. But what is the situation regarding people's livelihoods? Let's look at the wealth gap. The latest available caliber for the wealth gap is still that report from the Legislative Council in October 2024, which still uses data from the first quarter of 2024. Since then, the Legislative Council hasn't issued any new reports. The Hong Kong government's own poverty report stopped updating even earlier; the one released in 2021 for 2020 just stopped. Neither side is calculating the latest data anymore. But we can do this: take the October 2024 data as the best possible estimate, because it must have continued to slide afterward. At that time, the median monthly household income for the poorest 10% of families in Hong Kong was only 1,600 HKD, a full 54% drop from the 3,500 HKD in 2019. Meanwhile, the median monthly income for the richest 10% of families was 101,000 HKD, which actually rose by 10% compared to 2019. In other words, the gap between the richest and the poorest widened from 34.3 times in 2019 to 81.9 times, and it is estimated to be over 90 times now. The poverty rate calculated from the same report is 2.2%, meaning 1.39 million people are living below the poverty line, among whom the number of impoverished elderly has increased by a full 43%. The Hong Kong government's own poverty report stopped updating, just like the CCP—if they think something is negative, they just stop updating it.

Looking at the Hong Kong government's own Spring and Autumn ice-like Zhi'an, those fucking black cops in Hong Kong put the robbery of M Innovation Emperor on the front page. However, the total number of crimes in Hong Kong in 25 was 89,137, which is a full 50% more than the 59,225 cases in 19. Can everyone guess what the fastest-growing crime is? Right, it is the specialty of the former state: fraud. Among them, fraud cases reached 43,212, directly accounting for half. Victims were swindled out of a total of 8.1 billion, whereas the total number of fraud cases for the whole year of 19 was less than 10,000. In 6 years, they have multiplied by a full 5 times, and most of what was swindled away was ordinary people's savings and retirement money. What else? There are also homicide cases. There were 194 cases in 25, among which 168 were the dead from the Hung Fuk Court fire. What were they classified as? They were classified as manslaughter. To shift the blame for maintenance supervision, the Hong Kong government arrested 16 people on manslaughter charges. Then, among the 26 homicides outside of the fire, what were 16 of them? They were perpetrated among family members and relatives, whereas there were only 10 similar cases in 24.

Let's look at tomorrow's investment again. How can the Hong Kong government brag like that, saying that private-sector investment expenditure in the second quarter increased significantly, and also saying what? Saying that the number of overseas parent companies with offices in Hong Kong was 11,070, hitting a new high. But among these 11,070, Chinese parent companies have already replaced the United States to become the largest source. At the same time, the total number of compulsory winding-up petitions in the first half of 26 is at a high level since 21. In May of last year, the number of personal bankruptcy petitions was 949, which was the month with the most since the middle of 20. In other words, it is even worse than during the pandemic. Moreover, statistics show that in the business outlook for the third quarter, among 570 large enterprises, only 10% are optimistic about the economy of the next quarter. Commercial property prices have fallen by 60% from their peak, and the vacancy rate is 148 million square meters. Why are ordinary people unwilling to invest? Because investment depends on whether the rules are stable. This fucking, stupid Hong Kong National Security Law is simply a brain-fart interpretation, saying you are violating rules if you violate them, and saying you are committing a crime if you commit one. People can't even keep their bookstores open anymore. You say under such circumstances, who the fucking hell is sick enough to invest? And originally, the economic system is a very, very complex ecosystem. Whoever makes up numbers out of thin air like that, their brain is simply pure sick. They think administration can distort economic laws, but administration can only distort economic figures. It cannot distort economic laws themselves, and it will also cause huge waste. In the end, what does this system achieve through waste? It makes the poor poorer and the rich richer, especially the bureaucratic class. They do not participate in the economic process, yet they can dictate economic distribution. Whose pockets do all these wastes finally go into? Into the pockets of those fucking corrupt bureaucrats. This is the reason for this series of phenomena. We put these two sets of figures together to look at, and everyone will be clear about what a five-year plan is. Among the 22 indicators, the ones accurate down to the hectare are developed land, and the ones accurate down to the head count are the number of mainland students and the added value brought by tourists. But as for poverty, even the reports have stopped being published. What is a five-year plan? It is to satisfy a bunch of unrealistic administrative figures. The most tragic thing is what? It is that this figure actually meets the standard, because meeting this figure means what? It means the ordinary people paid the price for this plan. This is the entire connotation of the five-year plan under the CCP paradigm. Alright, that is all for today's BV with everyone. If you like the program, please feel free to like, subscribe, forward, and tip to support the Mingjing and Diandian columns.