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Li Ka-shing gestures to the medias as he leaves the Harbour Grand Kowloon in Hung Hom, Hong Kong. Li’s capital shift has unnerved many who see it as a vote of no confidence in China’s economy. Photo: SCMP Pictures
Opinion
What the Mainland Media Say
by Verna Yu
What the Mainland Media Say
by Verna Yu

Attack on Li Ka-shing ignores ills of business environment

Instead of accusing businesses of being unpatriotic, the real question is why are they shifting their capital out of China?

Asia’s richest man Li Ka-shing, the Beijing-friendly property tycoon long seen as the pride of the Chinese, was denounced in a controversial article by a think tank affiliated with the state-run Xinhua news agency on September 13, for moving his capital away from China.

The article on the website of the Liaowang Institution made waves across mainland media and stirred heated debate.

Headlined “Don’t let Li Ka-shing run away”, it accused Li of  forgetting the favours the motherland had done him over the years, and of making a quick exit as soon as China’s economy hit trouble.

“At this sensitive time when China’s economy is in crisis, he keeps selling his assets and spreading pessimistic sentiment ... He has fallen from the moral high ground,” the article charged.

[Li] keeps selling his assets and spreading pessimistic sentiment
Liaowang Institution, article 

It said Li had not grown rich from a level-playing field in a market economy, but owed his success to his connections with top officials, who hd given him access to prime locations,  often at hugely discounted prices.

It is unclear what prompted the think tank to publish the article, a shorter version of which appeared on the microblog of its author Luo Tianhao, on August 7.

The article appeared on Liaowang’s website a few days after the announcement of the merger of Li’s two companies, Cheung Kong Infrastructure Holdings (CKI) and Power Assets Holdings. CKI, as part of CK Hutchison, is registered in the Cayman Islands. It is the second major re-organisation of Li’s business empire as he shifts his investment away from China towards Europe.

The article has been taken down from Liaowang’s website. But it was not the only source of discontent over Li’s perceived lack of commitment to China.

Last month, an article on WeChat claimed that Li had “genuinely defined the term ‘evil capitalist’ by sitting on his assets until land prices rose, then selling them at a huge profit.  

However, commentaries in other state media outlets countered this view, arguing that it was normal for businessmen to seek profits and that Li’s commercial decision should not be taken as an indicator of China’s economic outlook.

On Tuesday, a commentary in the Securities Times headlined: “Let Li Ka-shing go, the sky won’t collapse”, said that if authorities forced Li to keep his assets on the mainland, many other companies would lose confidence in doing business there.

An article on the website of People’s Daily’s overseas edition, Haiwainet, acknowledged that Li had been selling assets since 2011, but noted the Chinese property market had plateaued and that the central government was also trying to cool it.

“Instead of worrying about whether the Li Ka-shings will run away, it’s better to look at where things have gone wrong and how to deepen reform,” it said.

Understandably, Li’s capital shift has unnerved many who see it as a vote of no confidence in China’s economy. There has also been widespread concern over the flight of foreign capital from China since a US$113 billion drop in foreign-exchange reserves in the first quarter.  

In recent years, official media have often adopted a hawkish tone in times of crises, so it is refreshing to hear some rational voices on this issue. Instead of accusing businesses of being unpatriotic and ungrateful for selling their stakes, people should look dispassionately into why a businessman like Li would prefer shifting his capital to Europe and find ways of making China’s business environment more healthy.  

Luo’s article accused Li of benefiting from preferential treatment  by mainland officials over the years, but failed to criticise the government and officials for condoning nepotism and cronyism.

Surely, the way to encourage investment is to ensure there is a clean and transparent business environment and a level playing field where businesses abide by the rule of law, not the rule of man. Then, who would care whether one particular business empire was staying or going? 

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