Li Ka-shing's Remedy for 'Coddled' HK
(Hong Kong) -- Hong Kong tycoon Li Ka-shing is again in the media spotlight after he mentioned in late February the possibility of publicly listing his retail business A.S. Watson Group, which is part of the Hong Kong-listed conglomerate Hutchison Whampoa.
"No matter what, if Watsons was to list in two locations, Hong Kong will definitely be one of them," Li said.
There has been speculation that Li is preparing to pass the torch to his oldest son, Victor Li, because he did not host a press conference for the company's results announcement last year. But the 85-year-old billionaire told reporters on February 28: "I'm not considering retirement."
In July, Hutchison Whampoa announced a plan to sell Hong Kong supermarket chain ParknShop, raising speculation Li will transfer his business operations overseas. This prompted some criticism, but in November, he met with the media to say he is not pulling up stakes, calling the speculation nonsense.
Li grew up in poverty, and has seen his fortune grow amid great changes in Hong Kong's society. The people of the city seem to be changing their view of Li. A decade ago he was seen as "Superman Li," but now many say his family controls too many aspects of their lives, from daily necessities to utilities and property.
Many people say Hong Kong's declining economic status in the region is supported by such discontent regarding the rich. Ye Xiang, a former advisor of the Hong Kong Securities & Futures Commission, said that as the relationship between the former British colony and the mainland grows closer, some of the city's residents believe that they have not enjoyed the benefits equally.
Li says the rise of populism in the city is dangerous. "Hong Kong is like a coddled child," he said. "If this kind of popular sentiment festers, it could very well impair the Hong Kong as we know it beyond our recognition in a few years."
Li has spoken to Caixin several times recently about the development of Hong Kong and his own business strategy. The following is the first of a two-part series:
Caixin: What is behind the rise of populism in Hong Kong in recent years? What do you think the solution is?
Li Ka-shing: The widening wealth gap is a growing global social problem and it is a very thorny issue for governments everywhere. If a government set policies through the emotive lens of populist sentiments, it might make you feel better, but not necessarily fare better. It is a dangerous sliding slope and a cause for a vicious circle.
I grew up poor. I understand poverty. If you need to worry about subsistence every single day, such tough experiences leave an imprint on your mind. But dwelling on bitterness and resentment only pins you down. The focus should always be on how to resolve our challenges.
Simple measures of poverty relief are not the antidote to counter the complexities of intergenerational poverty because it will neither improve competency nor bolster competitiveness. It is disheartening that many politicians play on the public sentiment to serve self-interests like getting votes or solidifying power bases. When a society is mired in discord, it will dent its economic vitality, which is hardly good for anyone.
Reforms in education and self-enhancement are important tools to engender social upward mobility. I believe failing to do so is akin to a crime against the future. This advancing wave of technological explosion is more than mere mechanized replacement. It entails a sweeping reorganization in the chain of manufacturing process. We need to beef up human capital and the innovation ecosystem.
Hong Kong needs to play catch up in the race for knowledge development and innovation investment. The future is all about technology. Its outlook is bright and could be a real solution to bridge the wealth gap. This is the responsibility of the government.
The boom of the gaming industry in Macau provides many job opportunities for Hong Kong, but we should not be misled by the unemployment rate of 3.3 percent and be complacent about the urgency to compete for quality jobs. Such short-term vision will sow the seeds of trouble for tomorrow.
Just by looking at numbers, Hong Kong labor statistics show increasing optimism within the tech industry. When contrasted against international surveys, however, figures reveal that our definitions of employment and achievements within the tech industry are actually below global standards. According to the Hong Kong government, about 30,000 people, or 80 per 10,000 employed, are tech employees. And according to other leading surveys, in countries with advanced technological output, such as Israel, IT staff and engineers account for 140 per 10,000 employed. The figures are 85 in the United States, 80 in Japan, 45 in China and 32 in Singapore, yet we must wonder why Hong Kong is not on this list. In Hong Kong, how many of these employees are actually scientists and IT professionals? Are our government policy and environment conducive to technological developments? A high-quality employment environment should encourage each individual to perform in his full capacity and under a diversified industry structure.
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