With a net worth of about $30 billion, much of it in real estate investments in China and Hong Kong, Li Kai-shing is the richest man in Asia, known for his shrewd business acumen and extraordinary ability to cultivate cozy relationships with communist officials in China to strike great deals in the world’s fastest growing real estate market.
Mr. Li is a Hong Kong business tycoon with a Canadian passport, a Buddhist who was knighted by the Queen of England. But first and foremost, he is the chairman of two of the world’s largest companies, the Cheung Kong Holdings and the Hutchison Whampoa, that own one-eighth of the world’s combined container shipping capacity and make up an eighth of Hong Kong Stock Exchange’s total market capitalization. For most Chinese, Mr. Li is best known for owning some of the most expensive and most coveted commercial real estates throughout the region.
For the last several decades, Mr. Li has been China’s model tycoon, an outsider willing to invest billions of dollars in China and generously donate hundreds of millions of dollars to charities and educational projects. But recently, the ruling elites’ inner circle is furious with him for pulling some of his major investments out of China since 2014, an act Beijing believes has spooked the confidence of the Chinese masses who follow his investment moves closely to gauge the health of the economy and stock market. Both the real economy and the stock markets have been rocked by losses in recent months.
On Sept. 12, that internal fury spilled out in the open when a publication of the think tank Liaowang, which is under the official Communist Party Xinhua news service, lambasted Mr. Li as a morally lapsed ingrate whose divestments from China and Hong Kong have undermined the country’s financial stability and caused public panic over the economy.
Headlined “Don’t Let Li Kai-shing Run Away!,” the article is written by Wu Tianhao, whose expertise is billed as “national strategy” including advising the government to create the Jing-Jin-Ji megapolis and to move state-owned enterprises away from Beijing to reduce air pollution. “Li Kai-shing is planning to sell his Cheung Kong real estate holding in Shanghai for [$3.14 billion],” the article claims. “This is the continuation of Li Kai-shing’s strategic move to withdraw his wealth from China and transfer it to Europe.”
“Li Kai-shing ignores Chinese government officials’ generous offers of favors for his projects in China’s infrastructure, ports and real estate projects in the past. Instead, he keeps selling off his assets in China at the current sensitive time of China’s economic crisis, causing widespread pessimism among some circles, which testifies to the capitulation of Li’s moral commanding height,” the article charges.
Like many business leaders, Mr. Li has clearly sensed China’s worsening investment environment. Some of his initial connections and backers within the high echelons of the Chinese Communist Party, especially those based in Shanghai, China’s commercial capital, are now targets of President Xi Jinping’s anti-corruption campaign. In 2014, Mr. Li began systematically withdrawing his vast investments from China’s large cities including Nanjing, Beijing and Shanghai. But more importantly, Mr. Li has stopped anchoring his business empire in Hong Kong, his home base, moving a huge part of his corporate empire to Europe and the British tax haven in the Cayman Islands.
According to the article: “Li Kai-shing should have been a bedrock for Hong Kong’s stability. [He may be allowed] to withdraw part of his assets from Hong Kong, keep the rest. But he cannot move all of his assets out of China and Hong Kong.”
The article caused an instant shockwave, as many were struck by its bluntness, harsh tone and its association with top-level government officials. Mr. Li’s spokesman immediately put out a statement denying total divestment from China, saying it is common business practice to buy and sell assets. China’s Internet also exploded with speculations of a coming crackdown on tycoons such as Mr. Li and the multitude of Hong Kong, Taiwan and other international business investors, many of whom are, like Mr. Li, pulling out their capital and investments.
To put out the fire ignited by the article, the Chinese government has censored the piece and State Assets Management officials have also denied any upcoming curbs on capital withdrawals. But the damage is already done.
“The move is like a bank in crisis posting a notice to prohibit customers from taking cash out,” notices the New Beijing Newspaper, “it will only result in savings account holders’ mad rush to the bank to get all the money out.”
• Miles Yu’s column appears Fridays. He can be reached at email@example.com and @Yu_miles.
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