The number of Hong Kong families living in extreme poverty has more than doubled since the former British colony returned to Chinese rule six years ago.

Nearly 196,000 households earned less than HK$4,000 (US$513) a month in the second quarter this year, up 11 per cent from the same period last year and compared with 91,400 before the handover in mid-1997, government statistics show. Hong Kong?s once-booming economy began to deteriorate in late 1997 when the Asian financial crisis hit and has never fully recovered.

Nevertheless, the territory remains one of the most expensive cities in the world.The rent for even a mediocre 600-square-foot flat can reach HK$6,000 a month.

Hong Kong?s median monthly household income was HK$15,000 in the second quarter, meaning a family earning less than HK$7,500 per month is considered poor. Social workers say those with a monthly income of less than HK$4,000 are living in extreme poverty.