John Tsang, Hong Kong’s ex-finance tsar, is now a fintech evangelist
John Tsang Chun-wah made a name for himself in Hong Kong for a few things: he tried and failed to become Hong Kong’s chief executive in 2017; he was one of the longest serving financial secretaries in Hong Kong’s history; and he presided over an enormous growth in Hong Kong’s fiscal reserves, garnering criticism for being tight-fisted in the face of an ageing society where hospitals and schools all seem underfunded.
During his tenure as Financial Secretary, Tsang pointed to the possibility of a new financial crisis, or some other “Black Swan” event, that would make enormous fiscal reserves necessary. Had he known that Donald Trump would be elected president (a prospect that seemed highly unlikely as he campaigned for Chief Executive), he may have felt some vindication for his budgeting. He was proud of the reserves that the government had amassed, despite public criticism.
To the public, he tried to project a kindly, fatherly persona, showing off a love of music and fencing. On Facebook, he maintains 133,000 followers, compared to Chief Executive Carrie Lam Chen Yuet-ngor at 47,000.
But Tsang did have a youthful flirtation with radicalism and entrepreneurship.
Born in Hong Kong in 1951 and raised in the US, he has described his youth in New York City in the1960s as a time of rebelliousness. Tsang wound up studying architecture, just making the cut for admission into MIT’s School of Architecture + Planning.
“I always thought architects were cool. You can do incredible things. It’s a mix of science and art, and I thought that was the ultimate thing.”
Tsang said that while he had to study the maths, his passion was for art.
He became entranced by the utopian visions of a man named Maurice Smith, a New Zealand architect and something of a cult figure among some architects.
“He installed a lot of ideas that were quite difficult to achieve in the real world… he said there was no need for doors [in a house],” Tsang recalled.
“If you wanted to, say, keep the kids out [of a room], you just make the steps into the room higher. He believed in interaction between different spaces. We totally believed in him. He was, like, the leader. This was the guy and we were impressionable,” Tsang said.
Dreams of a career in architecture remain. “I would do it all over again,” Tsang said in 2016. “It was just an amazing period.”
Tsang came of age in the US when the Vietnam war and Watergate left a pervasive sense of distrust in government among young people.
The US economy was also entering a tough period, and Tsang’s first real job in architecture saw his grander dreams take a proper hit, when he was assigned to design bathroom details. Tsang recalled being ignored by other members of his firm because he simply was “the bathroom guy.”
He soon left and formed a small design and contracting company with a friend, which didn’t last long.
He went back to school, completed a Master’s in Public Administration at Harvard University and by 1982, was back in Hong Kong working in the civil service, where he remained.
There followed a steady rise up the ranks to the upper echelons of governance. By 2007, he was installed as financial secretary. His appointment came at the onset of the global financial crisis of 2008.
It was, in Tsang’s words, “hell”. Hong Kong recovered quickly from the meltdown, in part thanks to China’s massive programme of fiscal spending and monetary easing. Though Hong Kong enjoyed years of growth following the sharp downturn, none of it put Tsang’s fears about the future at ease. The threat of a possible economic calamity clouded Tsang’s thinking.
“Our fiscal reserves have helped us ride out the storm during the Asian Financial Crisis in 1998, and maintain investors’ confidence in Hong Kong financial markets,” he said, adding that Hong Kong ’s fiscal reserves have been drained before, in 1998-99 and 2003-04, by as much as 40 per cent. “Hong Kong has a small and open economy that is highly susceptible to external volatilities of the global macroeconomic environment.”
But while Tsang may have run a tight budget during his time in government, his old dream of starting a business and being a radical thinker hasn’t completely died.
Tsang liked to tout his financial support for SMEs and an Innovation and Technology Venture Fund to support tech start-ups. Tsang even took some credit for laying the groundwork for the growth of the start-up community in Hong Kong.
Tsang thinks mainland China will continue to rely on Hong Kong for international financing and that China will be a source of growth and business for Hong Kong, though he has also pointed out that Hong Kong needs to be ready for the day when the renminbi is a convertible currency.
In the run up to the 2017 election for Hong Kong Chief Executive, Tsang repeatedly touted his pro-China credentials and offered plenty of support for Chinese President Xi Jinping’s signature Belt and Road Initiative. It didn’t work.
After some time off, Tsang is back in the news again, announcing plans to start a fund to support entrepreneurs in Hong Kong in March, and in June, it was announced that Tsang was joining Ion Pacific, a fintech focused merchant and investment bank as vice-chairman.
While Tsang may not have gotten the top job of the civil service, he may now have a shot to help others do what he could not: get a business off the ground.