He hates living his life out of a suitcase, and yet spends 80 per cent of his time on trips between Hong Kong and the mainland, and between China and the rest of the world. As if to emphasise the point, Vincent Lo Hong-sui hurried away after talking to the South China Morning Post in order to fly to Shanghai for a visit which would take him to five cities in 10 days. 'You think I love to travel like that, living out of a suitcase? It is no fun, it's work. I think we have to accept that is the reality of life now, you cannot always think of life as enjoyment,' said Mr Lo, chairman and chief executive officer of the Shui On Group. In his travels between Hong Kong and Shanghai, the businessman has been ideally placed to see how the two compare - and has found the former lacking. He believes that Shanghai has the edge, and it's all down to how the city is run. Asked what the city has that Hong Kong is missing, Mr Lo said: 'Shanghai now has the leadership there, they are very visionary, they have high goals and high aspirations, and they're achieving them.' But Mr Lo also thinks Hong Kong should not give up. It still has many strengths, including its open market, free movement of capital and people, low tax regime, a flexible population and an understanding of the mainland. 'Hong Kong should be the financial and business centre, a dual centre, for the whole of China, not just the Pearl River Delta,' he said. But he warned Hong Kong has to act quickly because its advantages will disappear in four years when the mainland market opens completely to foreign investment under the World Trade Organisation agreement. 'Other countries are very aggressive, they are going to move very quickly. By then everybody will have the same benefits,' he said. As for rivalry between Hong Kong and Shanghai, Mr Lo said: 'We need not or should not worry about whether Shanghai is replacing us. We have all the advantages, it is just that we are not making use of them. If they overtake us in the end, it is our fault.' Mr Lo founded his group in 1971 with a loan of $100,000 from his father, property tycoon Lo Ying-shek. That loan, and the efforts of five inexperienced young men, were all it took to get started in the construction business. Today, the group is involved in property development, construction and the hotel trade. Mr Lo spoke to the Post at the group's headquarters in Wan Chai, in an elegant penthouse with a part-glass ceiling. The efforts of the 54-year-old businessman, it seems, have paid off. Perhaps the most striking example of the group's success in mainland China is the Shanghai Xintiandi complex. The development has become more than just a new city landmark - it is a showpiece of China's urban development. Xintiandi is located in the city centre, adjacent to the memorial house of the First Congress Hall of the Communist Party of China. Xintiandi, which means new heaven and earth, is a household name on the mainland, but not yet in Hong Kong. Most local people who have dropped into the showroom at the group's headquarters have been ignorant of its signature mainland project. It was an investment made in 1998, when Mr Lo decided to redevelop a 52-hectare site into an upmarket complex. This was at a time when some Hong Kong developers were considering slowing their mainland expansion plans due to unfavourable market conditions. 'Everyone thought I was crazy back in 1998, when I approached the banks. It took them over a year to give me a loan, and then it was only US$45 million (HK$350 million), which was less than 30 per cent of the cost,' he told the Post in 1999. In that same year, he was made an honorary citizen of Shanghai. Xintiandi is a good example of Mr Lo's contributions to the development of Shanghai. It is a commercial-residential-tourism development project, consisting of two blocks. The north block is mainly composed of renovated Shikumen - or stone-crafted door - houses which date back to the 19th century and now form the surroundings for a shopping mall. The south block contains modern office buildings and a pedestrian walkway with shops and restaurants linking the two parts. Xintiandi played host to a star-studded New Year's Eve count down with VJ David Wu hosting the event and award-winning artist Coco Lee singing. Some aspects of Mr Lo's globe-trotting life are less glamorous. His aspirations to become the 'cement king of China' see him flying to far-flung cities such as Chongqing and Guizhou. 'I see more opportunities on the mainland than in Hong Kong, that's why I'm putting my money there,' he said. Apart from investing in properties and hotels in prime cities such as Beijing and Shanghai, his group has been buying state-owned cement manufacturing plants in Guizhou and Chongqing. Chongqing, with a population of 39 million, where 78 per cent of the people are farmers and still live in rural areas, was the example he used to explain his ideas. 'In the next 10 years they want to urbanise half of the population, so you're looking at 15 million that need to be housed in an urban environment. If you are building for five to six million people, can you imagine the scope?' The recognition he gained after spending 18 years operating on the mainland is reflected in his latest community engagement, vice-chairman of the All-China Federation of Industry and Commerce, which he took up last year. The federation is the national organisation of more than 3,000 regional chambers of commerce on the mainland, with more than 1.46 million members. It is the mainland's largest organisation representing the interests of the private economy. So what advice would he give to people considering investing on the mainland for the first time? 'Go in and understand the way they do business,' he says. 'A lot of businesses say everything is not black and white. The contract has got to be binding and everything. But it works both ways.' That was exactly his experience when building Xintiandi. The co-operation agreement only ran to four pages. 'A lot of people, many from the West, are scratching their heads and ask me how could I commit so much capital on just that basis, but it works perfectly well,' he said. His secret, he said, was to discuss things with his partners as the market evolved and find out the best arrangement for the existing environment But Mr Lo admitted this required tremendous trust and goodwill. Though he speaks highly of the mainland and is open to the possibility of moving the Shui On headquarters to Shanghai, it would be wrong to think he now looks down on Hong Kong. 'I always emphasis I was able to build Xintiandi because I am from Hong Kong,' he said. Mr Lo is keen to see Hong Kong pick up again. His view is that it should not try to revert to manufacturing, but seek to provide services for people who come for business and tourism. Turning Kai Tak, the former site of the international airport in Kowloon, into an international market place for Hong Kong and China, is one idea to boost the local economy. 'It could be used to exhibit all the products from all cities and all provinces of China, the provinces and cities can also have a representative officer here,' he said. The old airport building could be turned into a permanent showcase, saving overseas buyers the time and effort involved in travelling to the mainland. Mr Lo also suggested building different grades of hotel at the site as well as other tourism-related facilitates, such as Broadway-style theatres and pleasure boat services. The businessman also sees opportunities for Hong Kong as a result of China's accession to the World Trade Organisation. Under the WTO regime, Hong Kong can play the facilitator role for overseas corporations which want to invest on the mainland. It can also help mainland companies with an eye on the international market to go global. Mr Lo also feels the government should provide more assistance to small- and medium-sized enterprises, which constitute 80 per cent of companies in Hong Kong. While the Pearl River Delta region is crucial to Hong Kong, it is somewhat saturated and businesses are well-advised to look elsewhere for opportunities, he says. The central and western region of China is 'virgin ground' - it is ripe for Hong Kong businesses to develop. But the problem with going further inland, says Mr Lo, is that the environment is different from Hong Kong and the PRD, with which local businessmen are more familiar. But one final piece of advice for those in Hong Kong wishing to expand into the mainland is more easy to follow, says Mr Lo. Get rid of any sense of superiority, discard all resistance to mainland ways, and try to live out of a suitcase if necessary. 'Of course, in the past, we have always said Hong Kong is so prosperous, so convenient, so free and we don't want to move to anywhere else,' he said. 'But that's something Hong Kong people have to face up to. Even in the United States, the most prosperous country in the world, people move around. We will have to do the same, you go where the job is.'