i like going to Chu Kee, a small tea restaurant down the street of my place. It offers a neat standard "Breakfast A" for $17, including a sunny-side-up egg, sausage and ham, macaroni, toast and coffee or tea. The same package costs $20 in Central. Some back-street take-away counters in the business district match the Chu Kee prices.
i don't know why there are additional charges of $2 for cold drinks, if any reader can help me find the answer. Some say it is for the ice while others say the size per serving is bigger than that of hot drinks. Maybe, the problem lies with me who prefers hot drinks.
Tea restaurant is everywhere and it is a culture so rooted in my mind. i remember how i got amused when i casually ordered a hot lemon coke with ginger in one of the stylish restaurants in the reconstructed Murray Building in Stanley Bay. Well, i caught a cold that day.
The conventional business is full of economic sense. For an additional $2, you'll get a drink. For a further $2, you can change from ordinary noodles to specifically Demae Ramen. For an additional $2, you get this and for additional $1 you get that. Customers are often pleased to accept as they realize that the items if ordered separately cost much higher. The trick is customers tend to value an item on a per-unit basis, while the restaurants value an item on a marginal basis. It seems that local McDonald's has copied this strategy.
People often blame the fierce competition for driving down the prices, as well as the quality of food and services. Are tea restaurants under airtight competition (perfect competition)? Not really.
There are thousands of tea restaurants in the city, offering "Breakfast A" every morning. But they do not compete directly with one another. For an ordinary worker like me, the choices of tea restaurant are quite limited by the route i take from home to the office. There are just half a dozen options available.
Therefore, half a dozen tea restaurants share the market within a community. Those located in the prime district can price food and beverages at a premium. However, to a large extent, the owners of the property housing the restaurants will extract the premium though rents. That's reasonable as the "value" of location belongs to the landlords, but not the tenants. Landlords are often bedeviled as bloodsuckers raising rents ruthlessly and sucking the life of the hardworking restaurant operators. In fact, landlords have problems too.
Believe it or not, the truly fierce competition appears to lie on the competition for retail space. Capital flows freely from one district to another to bid for the most rewarding retail slots to invest, adjusted for risks. Yes, landlords do raise rents as much as they can during good times. However, nobody prays for them during bad times when they suffer losses.
Tea restaurants compete within a district. Property investors compete in a large circle. Who are the ultimate vampires? The government. But it is a benevolent vampire.
The government's expenses exceed 20% of GDP. However, no one is paying more than 16% of income as personal income tax. Most employees pay none. Corporations pay 17.5% of earnings. From these numbers only, people should be very happy with the government's performance. We pay less for much more.
Revenue from land sale closes the gap. By controlling the land supply, the government effectively charges "taxes" to land users. The land users include homeowners, renters, and you having the Hong Kong-style French toast.
In fact, this is not a bad idea for such a taxation structure. This "land" tax is progressive, by which i mean the rich pay more while the poor pay less. Those who live in the mid-level pay the most. And they are happy to pay the land premium while they are playing the bigger fool game, waiting for others to buy their properties at higher prices. Those who cannot afford private housing get public housing. Those who have their breakfasts in Mandarin Oriental in Central pay more "land" tax than i having mine in Chu Kee.
Financial Secretary Henry Tang wages campaigns to push for a sales tax, arguing that Hong Kong needs a broader group of taxpayers. In fact, Hong Kong needs no sales tax. Everyone is paying the "land" tax. Sales tax is regressive and unfair to the poor, as the poor pay more (as a percentage to their income) while the rich pay less.
Any discussion about tea restaurants ignoring milk tea is incomplete. Let me recommend you a tea restaurant brewing the best milk tea in town. It is "Man Kee" located in Yung Shue Wan, Lamma Island. The milk tea there has a kinky mixture of sweetness and salt. i am not sure if it has anything to do with the water they use although tap water there comes from Hong Kong Island. Tofu in Lamma is famous, thanks to the water there. Despite the dear land and locations, a business can have a lot of possibilities beyond those, such as making a good cup of milk tea.
May 11, 2005
Copyright Quamnet
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