The younger business leaders taking risks along China’s ‘Belt and Road’
Speakers at Hong Kong Belt and Road forum espouse values of risk-taking second-generation bosses, as mainland government’s trade plan throws up opportunities
Five years ago, Nicholas Ho Lik-chi, the second-generation owner of a Hong Kong-based architecture consultancy, returned from abroad to run a family business that was pretty much confined to mainland China and Hong Kong.
Now the 30-year-old is building “smart cities”, where technology is the critical infrastructure behind essential services, across Southeast Asia.
Some of those cities are along the old Silk Road economic belt from the north of China and the 21st century maritime silk road from the south, which underpin the Chinese government’s “Belt and Road” trade initiative.
Ho is one of many younger business leaders embracing Beijing’s ambitious plan, with new ideas to modernise the global trade strategy.
“I told my dad, you opened the China market 35 years ago. Now it’s my turn,” he said during the Hong Kong Belt and Road summit on Monday. And countries along the belt and the road were exactly the new markets Ho was looking for, he said.
“The further you go, the higher the risks. But the potential return is also higher,” Ho said.
The risks involved could not have been made plainer than when he entered the Malaysian market, and a sharp depreciation of the ringgit cost him 40 per cent of the money he invested on paper.
Political risks also weigh heavily, and some countries in the region are not friendly to Chinese businesses.
“Going there at the worst possible time is also the best time to learn,” Ho said. “You have to grow in a very short period of time.”
The risk-taking mindset seems to be common among second-generation business leaders, who now benefit from better access to information than their parents did at the same age.
Glendy Choi, another second-generation leader, is chief executive at D&G Technology Holding. She said she relies heavily on analytical skills and modern technology to manage risks in emerging markets.
The Hong Kong-based road construction company has expanded to 25 countries in the past decade, 17 of them along the Belt and Road course.
“Yes, many governments are not stable. But we can also develop in small scale … just go there and test the water,” she said.
Choi said many people were afraid to do business in countries with high political risks, such as Myanmar, but the risks could be controlled with sensible judgment paired with modern information technology.
“The judgment is not made just by your feeling. You have to be there and analyse it, with data and everything,” she said.
For other young entrepreneurs, investments on the Belt and Road are not just confined to physical infrastructure, but also involve upgrading technology.
Ivan Teh, 41, chief executive of London-based data analysis company Fusionex, said he foresaw cuts to the bureaucracy that slows the process of trade and financing agreements that are expected to grow under the initiative.
And he said he was looking to serve “entrepreneurs that are saying that we can’t have a permit that needs processing for two weeks when your customer is expecting you to deliver in one day.”
He said Fusionex had been working with some Belt and Road countries to build digital platforms to speed up bureaucratic processing, which would be unveiled soon.
“A lot of these [trade] agreements are taking place physically, but digitally there are platforms that are going to be put in place as well to ease transactions and to make things much better and more efficient,” Teh said.
Pawoot Pongvitayapanu, 42, chief executive of Thai e-commerce platform TARAD.com, which has 3 million users, admitted that more Chinese e-commerce giants taking the initiative to enter the Thai market – and with big war chests for acquisitions – was a challenge for local companies.
Big Chinese online sellers are competing to expand into Thailand, where the industry grows about 16 per cent on average annually. Recently, JD.com Inc planned to invest US$500 million to launch an e-commerce joint venture there with the local Central Group, according to Reuters. And Pawoot said collaboration could be just as important as competing.
“We have to think how we can fight with them, or work with them. Or we have to collaborate with them,” he said.