Everywhere in the world has it's ups and it's downs. Like you said, it has great transportation here that's pretty cheap. It has an easy tax system, and it has easy health care. Many expats get to earn good money that they wouldn't make back home (even in teaching, like me). I got an opportunity here to work with an arts organization and I would have never had a chance to find such a perfect match of work place back in the US, Germany, or the UK. The crime is low here and I feel much safer than I ever did in the states, and I also like the reassurance that I have good medical coverage.
During a speaking test recently, one of my local students had to talk about fashion in HK, and she made a good point that it's very divided: there are those who care a lot about it and spend a lot of money on it, and those who are very frugal and practical. If you go around the NT, I don't think you'd see much materialism. Heck, even my partner's one local colleague likes to wear a business shirt with a hole in it!
About the racism, every country has their issues with this, and even in the UK where they try awfully hard to be "fair" to everyone, it makes you nauseous sometimes. Are you a doctor by chance who cannot work here in HK? I do think doctors who came here with a partner and cannot work are getting royally screwed over, and HK's policy just screws itself over.
I don't know anyone who whitens their face, and I'm sorry if you are surrounded by people like that. Perhaps that reflects something about what career/path you've chosen for yourself and who you surround yourself with.
Yes, the pollution can be bad, but have you gone out and done something like hiked the Plover Cove Reservoir hike and seen the amazing scenery? Even on HK Island you can take spectacular, secluded walks from Park View!