Segregation legal and natural: An empirical study of the legally protected and free market housing ownership on the Peak

The phenomenon of protectionism in land policy has survived in the globalised age for various reasons. This case study on the destruction of racially discriminatory zoning in laissez-faire Colonial Hong Kong shows what could happen when protectionist measures are removed by the government. Approaching the reality of discrimination from Cheung's (1974) economic theory of price controls, this paper argues, on the basis of the records of official speeches and writings and a small sample of post-war assignments for housing lots, that the pre-World War II segregation law was motivated more by economic protectionism in favour of Europeans rather than by any social stigma against non-Europeans or genuine environmental externalities generated by Chinese housing. The paper approaches the same phenomenon from a new perspective and with a better method. It was revealed that natural or contractual, as opposed to legal, agglomeration could happen even under written discriminatory laws that allowed a degree of inclusion for the ethnic group that suffered discrimination. This revelation was based on an examination of the ethnicity of the original owners and subsequent purchasers of all identifiable 627 housing lots on the Peak in Hong Kong for 115 years from 1876 to 1990, as found in the 421 relevant Crown Leases and 1255 assignments. These housing lots fell into 23 street neighbourhoods and could be classified by altitude. The key findings lend support to the arguments that even if the post-war colonial literature evaded or even distorted the subject, there was no true racial animosity between European and Chinese citizens because the exclusionary laws were driven by economic protectionist motives and the repeal of the laws was socially and economically beneficial for both Chinese and Europeans.