Hong Kong’s ‘patriotic’ tycoons try to put one foot out of China
City’s mega-rich are selling their assets on the mainland while at the same time denying they are abandoning the country
That all is not well with China’s economy has been known for some time. Our tycoons, with their sharp business antennas, are especially clued in. Three decades of double-digit growth may have transformed modern China. But what is clear to any well-informed observer is that its high levels of savings and export-dependent model of development is coming to an end. Its attempt to let in greater market forces to boost consumer-driven demand is still a work in progress.
When a ship starts leaking water, the rats are the first to flee. The trouble is, withdrawing from the motherland is not an option open to our tycoons. They may not have signed up for it, but they have, belatedly, found that Beijing expects them to stick with it through thick and thin. Since they have reaped the benefits during the good times, they are expected to tough it out now.
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The recent attacks on Li Ka-shing, Hong Kong’s richest man, in the tightly controlled mainland state media is a case in point.
Taking the cue, the Cheng family of New World Development has denied it is withdrawing from the mainland. “We have absolutely no plans to withdraw from China,” said New World Development chairman Henry Cheng Kar-shun as he and his son, executive vice-chairman Adrian Cheng Chi-kong, reaffirmed confidence in China’s market. “The sale of projects in tier three and four cities was aimed at optimising our investment.”
He was referring to the sale of three projects – in Hubei, Guangdong and Hainan provinces – to Evergrande Real Estate for HK$16.36 billion, followed by the disposal of five other projects to Evergrande for HK$24.4 billion.
The older Cheng claimed New World was committing HK$60 billion to mainland projects. That may be so. But the overall impression is that the Chengs and their fellow tycoons are not adding to their mainland investments.
Likewise, “Superman” Li is increasingly turning his attention to major investments in telecoms, power supply and infrastructure in mature Western markets. A corporate reshuffle has re-domiciled his flagship Cheung Kong Holdings to the Cayman Islands. And, like Cheng, Li has been selling major property projects on the mainland left, right and centre.
Our “patriotic” tycoons are finding it more and more difficult to put their money where their mouth is.