The Japan Times - Hong Kong homes flattened for US$28 bn high-tech hub

An area roughly a third of Hong Kong including villages, natural wetlands and farmland is being converted into the "Northern Metropolis", an ambitious project aimed at deepening integration with the mainland, diversifying the economy and providing new homes.

"I can't bear to leave... If not for the government developing this area, I would likely spend the rest of my life here. After all, I belong here," Chan told AFP as he packed up belongings in his yard.

Touted as a "new economic engine" to accommodate around 2.5 million residents and provide 650,000 jobs, the project will link Hong Kong more closely with Macau and nine cities in mainland China that make up the Greater Bay Area.

But the government's vision for a Silicon Valley-like high-tech hub in Hong Kong comes at a huge cost to the city's wildlife, local communities and public finances, environmental and social groups warned.

"If you build a new city in a place that was well preserved before, it would inevitably be very destructive, no matter how you mitigate it," said Brian Wong of Liber Research Community, an NGO focused on land issues.

"Do we need to build it so big? Is it too ambitious?" he added.

- Return on investment -

The Northern Metropolis project, announced five years ago, will eventually cover 30,000 hectares (74,000 acres).

Liber said at least 25 villages will be demolished to make way for it.

Government departments told AFP they aim to integrate rural areas into the development project, but that Chan's ancestral houses were not culturally significant enough to preserve.

Plans to integrate Hong Kong with mainland China have long faced opposition in the former British colony, where critics warn such moves would erode the city's autonomy.

But a sweeping national security law imposed by Beijing on Hong Kong in 2020 after huge pro-democracy protests has stymied dissent in the financial hub.

It "effectively put an end to the 'one country, two systems' framework that allowed Hong Kong a 'high degree of autonomy', so greater integration with the Greater Bay Area would logically follow," Steve Tsang, director of the SOAS China Institute, told AFP.

The government says the Northern Metropolis will cost at least HK$224 billion (US$28.6 billion), while global ratings agency S&P estimates it could top HK$360 billion.

Authorities have promised a return on investment, citing bank estimates -- and a rough 20-year timeline -- that the project will account for 13 percent of Hong Kong's gross domestic product.

Tech hubs across the border in mainland China, such as Alibaba's hometown of Hangzhou, are expanding far faster, spurred by AI investors such as Deepseek and Unitree Robotics.

Hong Kong is "less relevant for China's national tech ambitions" than mainland powerhouses like Shenzhen, said Gary Ng, a senior economist at Natixis.

But it can nevertheless provide what they cannot: international connections, university research, and deep capital markets.

- 'Sacrifice' -

Last month, the first large-scale land sale in the Northern Metropolis was awarded to a consortium of six companies, including Chinese state-owned enterprises and e-commerce giant JD.com, to build housing and a logistics centre in Chan's area.

Hannah Jeong of commercial real estate firm CBRE told AFP that policy support will first attract mainland Chinese companies wanting to build research centres and take advantage of its lower taxes and talent, data and capital flows.

"With that flow, more manpower coming in, talent coming in... forefign companies will also gradually (invest)," Jeong said.

The biggest hurdle to the Northern Metropolis' success is "how to maintain an efficient cross-border flow, and at the same time maintaining the confidence that the international community has in Hong Kong's uniqueness", said Wilson Chan, co-founder of the Pagoda Institute think tank.

In her village, Niki So had watched helplessly as her neighbours' homes were torn down, waiting for the bulldozers to reach the house where her family lived for three generations.

The 42-year-old received a public housing flat in compensation, but told AFP she will miss the village where neighbours are like family.

In July, So opened her gate to dozens of lands department officials and police, who declared the area government property.

"I hope the development here will go well, that it will thrive," So said.

"If it doesn't turn out as expected then I think the sacrifice of this village would be quite unfortunate."

M.Ito--JT