For most foreign financial market professionals in Hong Kong and across Asia, the days of extravagant expat life have ended — for now at least.
The standard HK$200,000 (US$25,641) per month housing allowance for top bankers is gone or going in most cases.
Paid-for chauffeurs to tote executives and their families around the steep hills of Hong Kong are scarcer, as are free memberships to exclusive country, golf or dinner clubs that may otherwise cost more than HK$2.1 million to join.
PHOTO: REUTERS
Free private school education for the kids, roughly US$10,000 per child at international schools, is being scaled back too.
Corporate ships for cruises around Hong Kong’s myriad beaches are being auctioned off.
Many banking executives from Wall Street and Europe still live a life of luxury in Asia, but for others, the expat life of perks is a fading phenomenon.
“Those kinds of packages will not be offered to the extent they were in the past,” said Paul Lucas, vice president for real estate at Pricoa Relocation.
Starting last December, Morgan Stanley, like other Wall Street banks, began rolling housing benefits into salaries.
Hong Kong’s band of elite property agents, meanwhile, are rubbing their wounds.
“My record was a HK$320,000 [rent per month] mansion ... with a full sea view,” said a property specialist surnamed Lai who’s helped expat executives find luxury homes for the past 13 years.
“Recently though, we haven’t done many deals — only those around HK$100,000 [rent per month],” Lai said.
Residential rental prices dropped, by some estimates, more than 30 percent earlier this year.
HSBC sold its junk boats several years ago but still owns bungalows throughout the region for off-sites and weekend getaways for employees.
The size of housing allowances in Hong Kong may not seem like much for people within the financial industry, but for those outside it, the numbers look staggering.
But things are changing. While the shift may not be public, its trail is evident.
In the last six months, bankers have been moving from palatial flats to more modest abodes, or relocating to less exclusive and cheaper districts.
“What we’ve seen amongst some financial institutions is that they’ve changed their benchmarks,” said Lee Quane, the Asian director of ECA International, which advises on expatriate packages and allowances.
He estimates that the average price for a three-bedroom apartment in Hong Kong in a mix of expat areas was around HK$90,000 per month last year and this year.
Lavish perks add up.
“Benefits can sometimes be up to about two times more than the base salary of the employee for Hong Kong,” Quane said.
In addition to housing and school allowances, business-class air travel and free trips home used to be a given for expats at Hong Kong financial institutions.
For some, overseas packages even included membership to fancy recreation clubs like the Aberdeen Marina Club, where memberships can cost HK$2.1 million.
The pull-back in perks is, not surprisingly, being met with some resistance. But given the extremity of the global financial crisis, a crisis fueled in large part by banks taking on too much risk, people are generally understanding of the new policies.
“They’re being backed into a corner. They don’t like it, but there’s nowhere to go, there’s no alternative,” said a US fund manager and former banker, who asked not to be named.
“Firms are saying we need some of your skin in this game as well,” the fund manager said.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2