In another time and space, Hong Kong's property market fell by 70% in the next five years after reaching its peak in early 98. The most important reason for this is, of course, that the early hype has accumulated a lot of bubbles. With the outbreak of the Asian financial crisis, local speculators went bankrupt and international investors quickly left the market, causing the bubble to burst instantly. Therefore, after the Hong Kong property market peaked in early 98, it plummeted by 40% in just over a year.

Another reason to add insult to injury is that after Hong Kong's return to the motherland, the new SAR government launched an "80,000 Five-Year Plan" in order to curb the rising housing prices and improve the tight housing supply in Hong Kong.

The so-called "80,000 Five-Year Plan" means that no less than 85,000 new residential units will be supplied every year. As a result, the Hong Kong government began to increase the supply of land in the second half of '97, and the first batch of housing under the "80,000 Five-Year Plan" began to be put on the market in 2000.

At that time, Hong Kong's property market, which had just experienced a plunge, was suppressing demand to its lowest level in nearly a decade. At this time, the listing of a large number of new residences has seriously exacerbated the situation of oversupply and become the last straw that crushes the Hong Kong property market. As a result, Hong Kong's housing prices, which should have begun to slowly recover, plummeted by 30% again in the next two or three years.

Real estate can be said to be the most important part of the assets in the name of most ordinary Hong Kong people, and Hong Kong housing prices have fallen by 70% in the five years after 98 years, making almost every Hong Kong person lose a lot. This led to a rapid spike in public dissatisfaction with the new government, culminating in a major political incident in which hundreds of thousands of people took to the streets.

Since then, the Hong Kong government has been completely coerced by popular sentiment and has begun to deliberately control the supply of land to stretch housing prices. The number of new residential units in Hong Kong has dropped to less than 8,000 each year at its worst.

In this deliberately created situation of short supply, the Hong Kong property market has started to rise for more than ten years after four years. Even the subprime mortgage crisis, which shook the global economy, only caused Hong Kong's housing prices to plummet for two quarters.

Before Li Xuan's rebirth, Hong Kongers began to complain about the authorities' lack of control over housing prices, and were dissatisfied that their salary growth was being eaten up by faster-rising rents. It can only be said that the Hong Kong-government in another time and space unfortunately failed to step on the right step, so that one wrong step, one wrong step, and finally completely missed the opportunity to solve the problem of high housing prices in Hong Kong!

Hong Kong in this time and space is under the influence of Li Xuan, and the development speed of remote areas in the New Territories such as Tuen Mun and Yuen Long is far ahead of that in another time and space. After the Governor of Xingang Mak Ruobin took office, he threw out a large-scale New Territories development plan. After Vice Governor Dong took office in '94, he immediately kicked off this huge plan.

Therefore, by the end of '96, the part of the land that had been granted the development right in '94 had already been built into high-rise buildings one after another and began to be put on the market for sale. According to the statistics of the departments concerned, in the six months from July to December '96 alone, 52,000 new residential units were completed and sold in Hong Kong.

Under the impact of large-scale new real estate, the upward trend of Hong Kong property prices has finally been completely suppressed!

At the same time, after nearly three years of brewing, the Asian financial crisis has finally begun its first round of climax!

On February 1, 1997, the Thai government announced that it would abandon the fixed exchange rate and let the Thai baht float freely, causing the baht to plummet 17% in one day against the US dollar.

In the following month, the Malaysian ringgit and the Indonesian rupiah also announced their losses. International speculators are beginning to shift their attention from Southeast Asia to East Asia, and Hong Kong, as a free port and Asia's financial center, is bearing the brunt.

The fundamental problem with the exchange rate systems of Southeast Asian countries such as Thailand, Malaysia, and Indonesia is that they are not only burdened with huge foreign debts, but also have extremely empty foreign exchange reserves. Hong Kong, on the other hand, not only has its own foreign exchange reserves of up to US$80 billion, but also has a big backer with US$150 billion of foreign exchange reserves behind it - China.

'97 was at the juncture of the handover, and it was naturally impossible for the mainland to sit idly by and watch Hong Kong's economy collapse. But it is precisely because of the approach of the 97th that the Hong Kong stock market and property market are in an irrational period of crazy surge, driven by the good news of the return to the motherland.

In order to resolve the rapid rise in housing prices in Hong Kong, Li Xuan simply replaced the governor of Hong Kong, promoted the development of the New Territories, which had never been seen in another time and space, and curbed excessive growth by changing the supply and demand structure. In contrast, it is much easier for Li Xuan to manipulate the Hong Kong stock market!

You must know that the market value of just one company of the Oriental Research Institute accounted for 20% of the total market value of Hong Kong stocks at the beginning of its listing. The price-earnings ratio of the Oriental Research Institute was still low when it was listed, and the company's stock price performance in the past five years was better than the average of Hong Kong stocks, and by the beginning of 97, the market value had accounted for 22% of the total market value of Hong Kong stocks.

After HSBC moved back to the UK, Jiahua Group has become the second largest listed company in Hong Kong after the Oriental Research Institute, and its market value now accounts for almost 10% of the total market value of Hong Kong stocks. In addition, Oriental Group's local listed companies in Hong Kong include Hong Kong's largest media company - Asia Entertainment Group, the world's largest LCD panel manufacturer - Jiachuang Technology and so on. The combined market capitalization of these listed companies can account for 40% of the total market value of Hong Kong stocks.

And if you count the three listed companies under the name of Li Xuan's eldest brother Li Ke, as well as other companies that have close cooperation with the Oriental Group, then Li Xuan's control over the entire Hong Kong stock market will be even more terrifying.

Under normal circumstances, Li Xuan will naturally not personally intervene in the stock market, but the Asian financial crisis is different, if Li Xuan does not take action, once the Hong Kong economy is hit hard, it will seriously affect the development rhythm of the Eastern Group.

Therefore, as early as 96 years, Oriental enterprises have continuously increased their efforts to absorb funds from the secondary market through a series of means such as reducing their holdings of stocks and issuing new shares, so as to curb the rapid rise of stock prices.

After Thailand announced that it would abandon the Thai baht exchange rate, the Oriental Research Institute and Jiahua Group issued a profit warning for the first time. After that, many oriental companies also followed the announcement, and they have significantly lowered their performance expectations for the next few quarters, thus pouring cold water on the hot Hong Kong stock market.

Therefore, when international investors ended their hunting for Southeast Asian countries and began to shift their focus to Hong Kong, Hong Kong stocks fell by 20% rapidly in more than two months, and the active ebb tide has been completed, so that international capital wants to link the foreign exchange market and the stock market, and it is much more difficult to short Hong Kong stocks while shorting Hong Kong dollars.

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