Does attack on 'Superman' signal a change to China's opening up policy?
James Tien says the chief executive must speak up for our freedoms after state-owned media's attack on Li-Ka-shing, which has spooked Hong Kong businesses
Li Ka-shing has recently come under attack from the Chinese state-owned media for allegedly withdrawing his businesses from the mainland during an economic downturn. It has caused considerable unease within the business sector in Hong Kong, as it has fuelled speculation about whether these statements somehow reflect Beijing's thinking on incoming investments, which would mean changes in its reform and opening up policy. Should such doubts grow, it would damage the will to invest.
READ MORE: The curious ventures of Superman Li: Is Hong Kong tycoon's empire switch political or just good business?
Ever since economic reforms began in the late 1970s, a large number of business opportunities have been created in China. Investors from Hong Kong have done their part by facilitating the flow of capital, skills and talent into mainland China. Today, China is the second largest economy in the world, while Hong Kong's economy as a percentage of China's gross domestic product has dropped from 16 to 3 per cent.
An increasing number of mainland corporations are eyeing investment opportunities overseas for higher returns. If such normal acts of portfolio rebalancing are placed under the political microscope, or even labelled as disloyal, not only would it be against the principle of the open-door reform, but it would also contradict the "open and expand" strategy advocated by President Xi Jinping .
Key to Xi's plan is attracting foreign investments by protecting rights and freedoms. "One country, two systems" has provided Hong Kong businesses the rights and freedoms available to investors internationally, and these have been successfully applied on the mainland.
When the state-owned media criticised Li's move as defying "business logic", it appears not to understand such rights and freedoms, and the responsibility it entails. Listed companies, unlike state-owned enterprises, have to be accountable to shareholders. It is the obligation of those at the helm to maintain a reasonable return while spreading risks through diversification. They would be considered derelict in their duty if they did not do so.
The cost of doing business on the mainland has risen considerably. Labour-intensive operations can only remain competitive by relocating to places with lower costs. Hong Kong investors, however reluctant, were left with no choice but to move.
Regardless of what plans Li Ka-shing has, the criticism against him is not founded on good business principles and does not encourage Hong Kong investors to stand by the government and support the forthcoming economic reforms. It is time for our chief executive to dispel the concern of businesses here by defending the lawful rights and freedom of Hong Kong investors.
James Tien is honorary chairman of the Liberal Party and a legislative councillor