1997: THong Kong's 'Year of Queuing Nervously'

By Harvey Stockwin

HONG KONG (JP): One way of viewing 1997 in a Hong Kong perspective would be to see it as the "Year of Queuing Nervously".

All through the year -- and the Chinese year, of course, has still got a few weeks to run -- Hongkongers queued in extra-large numbers for several quaint or unusual reasons.

Deep down all the queues had one thing in common -- a substantial degree of justified or unjustified nervousness. This was hardly surprising. 1997 was, after all, the long-anticipated and long-dreaded year, during which Hong Kong people were formally returned to the sovereignty of the nation from which most of them had once fled as refugees.

Nervousness expressed in odd ways was therefore to be expected prior to the British handing over Hong Kong to China on July 1, 1997. But the nervous queues have continued even after the Chinese takeover has proved, in its initial period at least, much less fearsome than many anticipated.

As I reported at that time for the Jakarta Post, from early in the year onwards there were, on several occasions, many long queues at Hong Kong post offices, as a surprisingly large number of people decided to mount a run on the postage stamps of the departing sovereign, namely those with the head of Queen Elizabeth 11 on them.

The calculation was that, both here and in the vastness of the Chinese market too, such stamps would soon become an item of stored value, multiplying their worth several times over, and therefore a very rewarding investment, even though the stamps could no longer be used in the mail.

I have not checked yet to find out whether the China stamp market has justified these high-flown expectations. What I do know is that many citizens bought hundreds of thousands of dollars worth of such stamps, sometimes after queuing all night. If they then bought out of nervousness apprehension, they could be even more anxious now if the value of the stamps has failed to appreciate.

Correspondingly, later in the year, and until now, there has been an unseen run on the Queens-head coins of the departed British sovereign. Of course in this case there is no place where they sell coins of legal tender, so there have been no nervous queues. But the Hong Kong Monetary Authority (HKMA) has apologized for the fact that coins are in short supply and one reason for that is people have been hoarding Queen Elizabeth II coins as another good prospective investment.

Prior to the handover, there were massive queues as Hongkongers went to every local branch of the Bank of China in the territory seeking application forms for a stake in the initial issue of shares in a firm called Beijing Enterprises. This was the first of the hot "red chips" to launch itself on the Hong Kong stock exchange.

Again, the widespread expectation was of quick profits, as it was calculated that the firm's assets would be increased at the will of the Beijing authorities, and as the Beijing Enterprises share price rose on the (then) fast-rising stock exchange. No one wanted to miss out on the opportunity. Those who had no time to queue paid goodly sums of cash merely to purloin application forms from those who had been queuing.

The share offering was oversubscribed several thousand times, yet people still queued, and still applied. Everyone applying had to pay a deposit, so the weekend of the issue liquidity in the banking system was threatened by the tens of billions of dollars placed on deposit.

The same device, of buying a place in a queue, is commonplace in the huge queues which arise whenever a new housing project in the private sector puts its flats on the market. This is a constant in Hong Kong, and certainly not unique to 1997. These queues relate to the never-ending scarcity of accommodation in a crowded city. But the queues also relate to the property bubble, almost certainly one of Hong Kong's economic weaknesses.

The bubble contracted a little during 1997, but almost certainly by an insufficient amount to end the weakness. As a sign of the bubble, rather than queue for several days, or even a week to secure the right to buy an apartment, anxious property- seekers are willing to add tens or even hundreds of thousands of HK dollars to the price of their flat, merely in order to secure the queue place the speculators (often alleged to be related to triad organized crime) have occupied.

As the Asian financial crisis spread from country to country in the latter half of 1997, and even the firmly pegged Hong Kong dollar came under speculative attack, it was feared that Hong Kong's penchant for bank runs would again manifest itself.

In fact, there was only one case of long nervous queues mounting a run on a commercial bank, and that was as quickly squelched by the Hong Kong Monetary Authority, as was the "attack" on the dollar. As pre-planned the HKMA ruthlessly edged overnight interbank lending rates up to a peak of 300 percent, which really put the squeeze on speculation.

Perhaps this "smack of firm government" explains why there were no more bank runs. In times past nervous queues of those seeking to redeem their deposits have tended to move on to other banks once they have been reassured that their initial target is not about to fail. This time they didn't.

But the history of Hong Kong queues did repeat itself in one amazing way -- there was another Cake Run on a bakery, widely rumored as likely to go out of business.

In 1984, amidst the great uncertainty prior to Hong Kong's 1997 handover by Britain to China being finally agreed, there were amazing scenes when the (false) rumors spread around that Maria's bakery chain was going bankrupt. Cake gift certificates are widely held by Hongkongers -- they are often sent as a gift along with an invitation to a wedding. So thousands of certificate holders rushed to redeem them. They took all the cakes to which they were entitled, even if they were far than they could possible store or eat. The long nervous queues arose because people simply did not want to be deprived of something that was rightfully their's.

The rumors, the responses, the scenes, the queues, the excessive certificate-redemption far in excess of anyone's conceivable cake consumption --- history repeated itself in amazing detail in November as there was a run on the St Honore chain of cake shops. In 1984 Maria's had averred that it was still in business, but that it would keep its bakery open 24 hours in order to redeem those certificates. St Honore behaved in exactly the same way. The cake run still continued for several days.

This time there was the additional phenomenon of a run on utilizing gift certificates awarded by a chain of amusement parlors displaying video games and the like. Both St Honore and the amusement parlors had once been financially related to the Japanese-owned Yaohan chain of supermarkets, which collapsed around the same time. Huge queues greeted the firesale of Yaohan stocks after the bankruptcy -- even though the prices were not that great bargains. People just believed they were getting something very cheaply, even when they weren't.

The year ended with long nervous queues at the out-patients clinics of every major Hong Kong hospital. In many cases those queuing had nothing to be nervous about, even though they were fully justified in being nervous.

The queues resulted from fears that another influenza pandemic was getting underway in Hong Kong and southern China -- just like the three which have preceded it this century. But the symptoms of the new and virulent H5N1 virus, about which people were warned, were so broad that many queued for treatment who didn't need to do so. Understandably but unjustifiably, a degree of panic had taken hold.

Partly in reaction to the nervous symptoms displayed by the queues, the government reversed itself, and launched the Great 1997 Hong Kong Chicken Purge, aiming to eliminate all chickens in Hong Kong since poultry are the known purveyors carriers of the H5N1 virus.

The threat was real, the nervousness was justified, but once again Hong Kong was Hong Kong. After four days, the purge had eliminated 1.4 million poultry, 200,000 more than expected. But tens of thousands more birds still clucked their way around the territory. The government, which wisely doesn't try to control the economy, had expected to massacre all the chickens in 160 chicken farms -- but found out that there were now more than 200 such farms.

Meanwhile some hardy chickens even managed to escape from the black plastic bags in which they were supposed to have been gassed, suffocated and buried.

The black bags of chicken carcasses were not all quickly collected so that Hong Kong's bands of wild dogs and cats were seen breaking into them and carrying off some chicken, thus giving rise to the fear that the dogs and cats might develop as flu virus carriers, too.

No vaccine has yet been produced against the H5N1 flu virus. Given all the difficulties, it is probably at least six months away from being manufactured on a large scale.

But when it does finally arrive, the Hong Kong government will need a huge supply to be readily available.

Given the history of 1997, plus the slipshod way in which the Great Chicken Purge has been conducted, the nervous queues of Hongkongers lining for injections will very likely be mind- boggling.