PETER LEE KA-KIT is the eldest son of Henderson Land group patriarch Lee Shau-kee, one of Hong Kong's richest men. The junior Mr Lee, who chairs Henderson China Holdings, believes doing bricks-and-mortar trade in China is five times more complicated than in Hong Kong. But after 17 years of heading the group's mainland property arm, with a land bank of 27 million square feet, Mr Lee says he has become smarter. After being cheated and falling into an investment trap, he says he has learnt some serious, if frustrating, lessons. Q: Henderson China's market size (HK$1.37 billion) remains tiny compared with its parent, Henderson Land Development, which has a market capitalisation of HK$41 billion. Do you have a time frame within which Henderson China will contribute meaningful profit to its parent? A: It is wishful thinking. In Hong Kong, we can hire as many people as we need if several property projects get off the ground at the same time. That is because of their professional spirit and experience in the industry. In China, we cannot rely on people whom we do not know very well. If we hire people who do not have knowledge of the mainland market, a project can easily end up delayed for two to three years without any solution. Q: What difficulties have you encountered so far? A: China's frequent change in policy. We had a bad experience in Guangzhou. The rules for applying for occupation permits had undergone a sweeping change and even the staff in the related government units did not know how to process the application. They told us they needed to consult the municipal government to update the change. So, that was a real headache for us. Q: Has Henderson China considered teaming up with a strong mainland partner to make things easier? A: We have tried that before. But if we team up with private enterprises, they may become a potential financial time bomb as their capital mainly comes from bank borrowing. If we team up with major state-owned enterprises, the senior management's commitment may not be as strong as ours because they are not a shareholder of their company. Q: Henderson China's net profit declined 21 per cent to HK$133 million for the year to June 30. When will you see a big improvement? A: Very soon. We have managed to reduce our construction costs by 40 per cent compared to four years ago, a level equivalent to what domestic developers pay for their projects. Q: How can you control the cost now, when you could not before? A: We became smarter after learning some important lessons. We were paying too much for expensive construction materials and there was a lot of frustration with disputes with different parties. This was a long process but I think it was important to learn from major private enterprises and [pick up] the tricks in saving expenses. Q: How frequently do you go to China? A: Half of my time I am there. Q: How will you spend your Christmas? A: I will stay home for a holiday. I really need to take a break from my hectic schedule. Q: What is your Christmas wish? A: World Peace. That the US does not declare a war with Iraq. Q: Do you have a girlfriend? A: Do you have a candidate?