Caixin
Mar 25, 2018 07:49 PM
SOCIETY & CULTURE

Video: 'Superman' Li Ka-shing Looks Back on Storied Career

(Hong Kong) — Refugee, high-school dropout, watchmaker’s apprentice, “king of plastic flowers,” port and real estate magnate and Hong Kong’s richest man — Li Ka-shing has played all of these roles during his 78-year career, which he announced on March 16 will end with his retirement in May.

Li, a self-made billionaire, has been one of the most influential businessmen in Asia for decades. With a net worth of over $34 billion, he is the 23rd richest man in the world, according to Forbes. The conglomerate he built, CK Hutchison Holdings Ltd., operates a wide range of businesses, including transportation, real estate, financial services, retail, energy and utilities, employing over 320,000 workers. The company is the world’s leading port investor and the largest health and beauty retailer in Asia and Europe.

Li is also one of the world’s most generous philanthropists, having donated more than $2.5 billion to charities and other causes during his life.

“Superman,” as he is widely known in Hong Kong for his business acumen, is stepping down as chairman of CK Hutchison Holdings and leaving the massive business empire in the hands of his older son, Victor. But the father will not step completely out of the picture, as he will continue to serve as a senior advisor.

The 89-year-old tycoon sat down with Caixin earlier this month and shared his views on the technologies that will shape the 21st century, discussed the personalities of his media-shy sons, and talked about his greatest commercial victory.

The following excerpts from Caixin’s interview with Li have been edited for length and clarity.

Caixin: How would you describe your sons, especially your successor Victor?

Li: Victor has worked his way up the company from the junior level to general manager and vice-chairman. He has participated actively, not just in CK Asset Holdings, but also in CK Hutchison and our other listed companies and subsidiaries like CK Infrastructure, so I don’t have any worries. I’ve said in the past that even if I left for a vacation at a moment’s notice the company’s operations would not face any problems.

My two sons are in different business fields. The two of them, on the whole, have no opposition to the current arrangements. I am confident that they will do very well, with their many years of experience in society and in their occupations.

Victor is extremely hardworking and I believe our existing shareholders like him. He single-handedly built up CK Infrastructure into a successful international infrastructure company. Some people are social butterflies, but I’m not like that and Victor is the same. As a person, he plays by the rules and is the best husband and father.

Richard (Li’s younger son) is very diligent, working ceaselessly every day — contrary to the public image of him. He, too, is on the path to success.

What plans have you made for your conglomerate? What will the future bring?

I value very much the creation of conditions for a virtuous cycle, possibly because I have lived through turmoil.

When I started running my plastics business, plastics technology was enjoying unprecedented growth in the manufacturing sector. In those days, profits doubled every month.

Afterwards, I saw the start of a high-growth period in another industry — property. So, I actively disposed of the plastics factory that had provided steady growth and rushed headlong into a new industry. Later, through Hutchison, we developed our international operations.

Recognizing the rise of the global economy, I decided I wanted to go into the shipping-container business. At the time it was a brand new, highly efficient transport method. Even today, 90% of the world’s goods are transported by sea. From that first container dock, we’ve expanded to operations in 57 countries today.

In recent years, I’ve been trying very hard to develop projects that will be regular and secure sources of income. As for the future, which fields to put resources in and on what scale should be decided by Victor.

What do you think will be the industry of the future?

Amid a massive stream of new technology, the government of every country, especially China, must consider setting up a “Future Bureau” to look into what the future requires, re-examine government policies, and plan for that future.

In recent years, I’ve invested in a significant number of synthetic biology projects. I’m very encouraged — usable products are already within reach for this highly disruptive technology, which will affect every country and industry.

Petroleum was the raw material for the countless value chains created by synthetic chemistry in the 20th century. In the 21st century, DNA will be the raw material of synthetic biology, which will also generate countless new value chains, solve production problems, stabilize prices and fulfil future demand.

Whenever I see a new technology, I want to join in and invest so I can peek into the future. New technology amazes me but I also worry about the consequences it brings. Countries must prepare for their participation in the future.

Aside from synthetic biology, I have also paid attention to projects on optimal aging. As an elderly person myself, I understand very well the importance of happiness and dignity (for older people).

Why do you think some believe that Hong Kong has missed its golden opportunity for transformation and could soon be replaced by more innovative mainland cities? What should the Hong Kong government do?

Hong Kong is an unusual place. The government is the biggest landowner and looking at the government’s income makeup you can see how dependent it is on real estate and finance. That’s why it chose not to broaden the spectrum. If it wants to invest in the future, the current income makeup will change, and that may present risks for the government. With insufficient resolve, the necessary concentrated effort will be lacking, so it’s no wonder there have been no results.

I have always recommended that, to face the future, the government must be determined to find an “ambidextrous” strategy that quickly and seamlessly implants innovative technology into traditional industries. Blending new and old, combining profit with transformation — it’s like having the left and right hands operating freely at the same time.

You began investing in the mainland 26 years ago, but in recent years you’ve sold many of your assets there, especially real estate projects. Can you explain why? How does the investment environment on the mainland today compare with the environment 26 years ago?

Our mainland investments aren’t only in the property sector — they also include energy and infrastructure investments. The increasing proliferation of policies aimed at stabilizing society and the market has made us more cautious, but there actually is a lot of demand and many opportunities on the mainland.

I am selling and buying property in a normal way. But exaggerated, distorted and baseless talk is always suggesting that I am divesting. What the ulterior motive is, I’m not too interested in finding out.

They say that wherever there is praise there will also be criticism. I have my own principles. Ever since Cheung Kong listed in 1972, I have always emphasized the importance of aligning with shareholder interests. Looking back on those times, Hong Kong people preferred to buy foreign companies’ shares, but I felt that Chinese-owned companies could also stand on their own, so I set up a company myself, resolving to set an example.

The internet is full of fake news. In an anxious era, the index of negative sentiment is particularly high. During this time, the idea in the (Buddhist) Diamond Sutra of “giving rise to a mind that does not abide in anything” is a piece of wisdom that is particularly meaningful. (Editor’s note: In the Diamond Sutra, Buddha teaches that all phenomena are temporary. If the mind abides in negative phenomena of the past it can lead to unhappiness. To avoid this, one must unbind the mind and not abide in anything.)

78 years is a long time. What led you to where you are today?

My “length of service” is 78 years, but if you calculate it based on the amount of time I’ve worked, I have been employed for over 100 years. Starting at the age of 12, even though it was hard work carrying goods equivalent to my body weight, I tried my best, because I was afraid people would think I was useless because of my youth.

When I was growing up I had no toys. A game I frequently played was observing people and imagining what I would do if I were in their position. When I was 17 and my company wanted me to be a shopkeeper, I asked for the harder job of salesman instead, working on the road. That’s how I learned what the world wanted.

Later, when I opened my own factory, it was also “one foot kicking” (Cantonese expression meaning a single person having responsibility for all the work). I slept in the factory attic. I would fall into a deep sleep listening to the rumbling of the machinery and knowing that the business was active.

In 1956, when we expanded and moved into a new factory, my home was a 12th-floor apartment. I still worked 16 hours a day. Every night, returning home, I was very tired. I had to close my eyes and grab the railing to pull myself up the stairs, counting each step. Dealing with manufacturing taught me to develop my creativity to find solutions and taught me how important it is to maintain cash flow.

Early on, I bought land to be able to build my factories, but because Hong Kong has little land and many people, I quickly realized the strength of demand for housing and decided to end my profitable plastics business to invest enthusiastically in the property business. Afterwards, we listed, and then through the acquisition of Hutchison Whampoa we went international.

What is your greatest commercial success?

In the early 1990s, the communications industry was beginning to heat up. We bought into a loss-making British telecommunications company called Rabbit, which focused on mobile telephone services. But two years after the investment we were still losing money. Based on the dire outlook, I decided to end my business with Rabbit. Someone offered to buy it for a reasonable price. The buyer and I agreed not to publicly disclose any news before our meeting to discuss the deal had reached a conclusion. But, five minutes after the meeting ended, the counterparty’s manager called my representative in England and said, with the air of a victorious country addressing the country it had defeated in battle: “You must listen and cooperate, or your future position won’t be guaranteed. We will buy your company.”

Once my colleague told me about the call, I felt that something wasn’t right, rejected all other phone calls while I thought over the issue. I thought, if I continue my involvement with Rabbit, would we be able to turn its loss into profit and did we have enough cash on hand to pay for Rabbit’s development? I spent ten minutes doing the calculations. Then, I decided not to sell Rabbit. In the end, Orange, the company Rabbit developed into — everyone knows how the story ends. The sale of Orange (in 1999, for a profit of HK$118 billion) was one of the most successful deals ever completed by my company.

What would you like future generations to associate with your name?

Growing up, some people called me (the diminutive) “Ah Shing.” Later in my life, I have heard people affectionately call me “Brother Shing,” with great warmth. I like this word, “Shing” (Cheng in Mandarin, meaning sincere). In an ever-changing society, sincerity is a precious principle.

Wei Yiyang and Liu Yanfei contributed reporting for this article.

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)


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