Live Report: CUHK Business School Conference
Welcome to our live reporting from the Grand Hyatt Ballroom, where to mark the 50th anniversary of its internationally respected MBA programmes, The Chinese University of Hong Kong (CUHK) Business School is organising a special “China Business in the Global Economy” one-day conference. Throughout the day we will be bringing you live updates covering the many interesting and exciting insights from a distinguished line-up of keynote speakers and panellists who will address the topics, which is predicted to shape global business and economic activities for the years ahead. With panellists including top academics and senior executives from the banking, IT, insurance and media sectors, discussing topics ranging from tech innovation to new trends in financial services and the prospects for future growth in China, there is certain to be many interesting observations and opinions on the challenges and opportunities likely to materialise in the years ahead.
As we draw close to the end of what has been an insightful, knowledge-sharing and inspiring conference, Stephanie Villemagne Associate Dean of Graduate Programs and Director of MBA Programs CUHK Business School, The Chinese University of Hong Kong begins her closing remarks by saying today has been an intensive learning experience. "We have a lot to take away and think about," says Villemagne. And with those closing remarks this ends our live coverage of the CUHK Business Conference.
Following a short introduction, Chow moves on to taking questions from the audience. He says the One Belt, One Road initiative is only one part of the massive finance markets on the mainland. "Hong Kong has a role to play, but it is our equity market and other asset classes that are equally important to Hong Kong," says Chow. Another question, about the international commodities market asking if Hong Kong has any advantages. The second part of the question touches on the Hong Kong link with the London Metal Exchange (LME). "The London Metal Exchange like most commodity markets are global so even if and when the UK leaves Europe, the LME is and will remain a success," says Chow. Focusing on China, Chow says the commodity market is positioned for building a physical commodities market. "That’s our vision," says Chow. A question about IPO listings in Hong Kong and changes to the listing arrangement. "I think I am going to say it is under the review stage, so I am not going to say too much," replies Chow, who offers the insight that Hong Kong has an international reputation for the quality of the Exchange and the companies that list on it. "We will always focus on quality," says chow. On the topic of bonds, Chow says there has not really been a demand for bonds in Hong Kong, but would be happy to work with China to allow Chinese investors to invest in international bonds in Hong Kong, and for Chinese companies to offer bonds in Hong Kong.
Continuing with the third keynote speech, Sir CK Chow GBS, JP and Chairman of the Hong Kong Exchanges and Clearing Limited (HKEx), address the topic of Hong Kong’s Financial Market: ''Where We’ve Come, and Where We’re Going''.
Chow begins by giving a history of the Hong Kong Stock Exchange. "We have changed and adapted over the years," says Chow, "Hong Kong has become the main listing market for mainland companies having raised over US600 billion over the years," explains Chow. He then highlights how the Hong Kong market has topped the world ranking for the IPO market four times in the last seven years. Chow also outlines how the linking of the Hong Kong and Shanghai stock exchanges and soon to be launched Shenzhen connect have help to open China’s capital markets. ‘’This is heavy lifting indeed,’’ notes Chow, a non-official member of the Executive Council of the Hong Kong Special Administrative Region of the People’s Republic of China, a non-official member of the Economic Development Commission of the HKSAR and Convener of the Working Group on Transportation under the Commission, and non-official member of Commission of Strategic Development. "The aim is to create a Hong Kong market where we can consolidate our unique East and West strengths where people around the world feel comfortable listing and investing," says Chow. "People should not be afraid about China’s markets impact on Hong Kong," assures Chow.
Lo says the CUHK Business School could include the One belt, One Road strategy in the MBA programmes. "Our people and those involved in the One belt, One Road projects could learn from each other," he observes. Replying to a question from the audience Lo explains to get started Hong Kong could act as a platform to package projects and illustrate the economic viability to the world, which can bring world professions and resources together. "We can also learn from our past experiences of investing and working in the mainland," says Lo, who in addition to his business capacity, Lo has been active in community services. Prior to his previous position as Chairman of the Airport Authority Hong Kong, he also participated in the preparatory work of the establishment of the Hong Kong Special Administrative Region (HKSAR). He is currently a Member of The Twelfth National Committee of Chinese People’s Political Consultative Conference, President of the Council for the Promotion & Development of Yangtze, Economic Adviser of the Chongqing Municipal Government and Honorary Life President of the Business and Professionals Federation of Hong Kong. Lo outlines how the HKTC research department is working research units on the mainland to look for other ways to bring Belt and Road benefits to Hong Kong. "We need to pull ourselves together, so many people from around the world are asking us about it, I really believe the Belt and Road opportunities can really work for Hong Kong," states Lo.
As a key component of the Mainland Five Year Plan, Lo says Hong Kong has been included in the One Belt, One Road platform. "If we look at Hong Kong’s professional services, experience and what we are good at, we can play a contributing role from finance and managing and international connections and relationships to fund the projects,’’ says Lo. The plan involves more than 60 countries, representing a third of the world’s total economy and more than half the global population. With the Asia Development Bank estimating that Asia needs US$8 trillion to fund infrastructure construction for the 10 years to 2020. "Hong Kong’s role as a super connector has been spoken about at the highest level," stresses Lo. Explaining that it may not be easy to see at the moment to see how the One Belt, One Road development can flow to Hong Kong at the moment, it is the future where the benefits lie. "Over projections indicate there will be a flow of billions through Hong Kong and demand for our professional services," says Lo. At the same time, to prepare for the One Belt, One Road future, Lo says it is vital for Hong Kong to continue building partnerships. He says the CUHK Business School has a role to play in developing business leaders for the future.
With lunch served, Prof Kalok Chan, Dean of CUHK Business School, introduces keynote speaker Vincent Lo, GBS, JP and Chairman of the Hong Kong Trade Development Council (HKTDC) who will offer his insights on the much talked about, China-led One Belt, One Road initiative. "Mr Lo has many notable person and wears many hats including being a true pioneer of doing business in China and Hong Kong and a real driver of business," says Kalok.
"The One Belt, One Road is one of my favourite topics," begins Lo. "Many agreements have been signed, it is real money and a real development," he adds. The heart of One Belt, One Road focuses on the creation of an economic land belt that includes countries on the original Silk Road through Central Asia, West Asia, the Middle East and Europe, as well as a maritime road that links China’s port facilities with the African coast, pushing up through the Suez Canal into the Mediterranean. Explaining how Hong Kong can play a role in the One belt, One Road initiative, Lo says it is necessary to remember how Hong Kong has been involved in the China growth story since China began opening up in the late 1970s. Lo also stresses that Hong Kong has benefited from the China growth story. "Hong Kong has and remains a stepping stone and a gateway for Chinese companies going out and finance reforms," says Lo, who is the founder and Chairman of the Shui On Group, which is principally engaged in property development, construction and construction materials with interests in Hong Kong and the Chinese Mainland.
As he moves towards the end of his presentation, Gupta touches on the strengths of mainland companies, which include a strong drive to be a global player. Replying to a question about the One Belt, One Road strategy and how Hong Kong can benefit, the professor says there are many answers, but connectivity is a main focus. "Connectivity is good," emphasises the professor, but cautions that progress will progress at different speeds depending on the countries and economies involved. The professor raises the question of who and how the investments will be made and how returns and benefits are identified. "There are question marks, but the ideas are good," says the professor. Another audience member questions about Chinese M&A deals being rejected on national interest grounds. "I think it is more sector by sector and depending on what the importance is to the local economies and domestic market share," says Gupta. "We saw a Chinese company buy into the US’s largest pork-producing company without any major difficulties," explains Gupta. In terms of making a M&A successful, Gupta says in addition to management skills, companies also need organisational skills. "Organisational skills are much deeper and require more than just a few managers with exceptional leadership skills," concludes the professor.
The author of several best-selling books including The Quest for Global Dominance, Getting China and India Right, and The Silk Road Rediscovered, Gupta says not all Chinese companies branching out beyond the mainland borders have been successful. "On a rating basis I would say Chinese private companies have performed better than State Owned Enterprises," observes the professor. "Alibaba is a good example of a company that seems to be doing things in the right way," adds Gupta, who is an active keynote speaker, adviser, and/or board member for a number of Global Fortune 500 companies as well as venture capital backed technology ventures and accelerators. The professor says some of Mainland’s ODI activities would make interesting MBA case studies. He says broadly speaking, less than 50 percent of domestic M&A’s succeed and the numbers fall considerably when it comes to cross-border M&A’s. "Management styles, culture and even language have a huge impact on international M&A’s, and we should remember that Chinese companies are still fairly new to the game, but they are learning," says Gupta. One example, he says, is focusing on sectors that are easier to manage. "We see examples of companies who are learning to walk before they try to run by building strong management teams and learning how to partner," adds the professor. "Of course, Chinese companies do sometimes still run into political problems and sensitivities, such as the UK power station investment," highlights the professor.
Over the next five years, the professor says it will still take some time before China has the same amount of ODI (outgoing direct investment) as the US. "It would take a very long time, and it is not likely to happen that China will acquire through ODI all the companies and natural resources the country needs," continues Gupta. He notes how China is looking for ODI to boost technology know-how and brands. "China also invests to build global scale and growth," says the professor. He adds that ODI trends have changed over the last 10 years from agriculture and natural resources to technology and assets geared towards mainland domestic consumption. "The ODI’s now require a more complex management approach," says Gupta, one of only three professors, out of over 25,000 worldwide, to have been elected a Lifetime Fellow of the three most prestigious academic bodies in his field – Academy of Management, Strategic Management Society, and Academy of International Business.
Our first Keynote speech delivered by Professor Anil K. Gupta, Michael D. Dingman Chair and Professor of Strategy, Globalization and Entrepreneurship, Robert H. Smith School of Business, The University of Maryland will focus on "China Inc on the Global Stage". "As insights go, the outgoing investments by Chinese companies rank very high on the impact on the global economy," says Gupta. He notes that while the mainland economy is experiencing a slight slowdown, the growth figures are still impressive. Remarking on media headlines of "China buying up the world", the professor says it is important to look at the trends and where State Owned Enterprises (SEO) and mainland private companies are investing. "We should also look at what Chinese companies are learning as they expand overseas," notes Gupta. "We should look at China’s outgoing investment compared to other large economies, which is about the same as Japan and Germany, about 120 billion US dollars. No-one talks about other countries buying up the world," says Gupta, who is ranked by Thinkers50 as “one of the world’s most influential management thinkers” and by HotTopics as “one of the world’s most influential professors of entrepreneurship”. He has also been named by The Economist as one of the world’s “superstars” for research on emerging economies, and inducted into the Academy of Management Journals’ “Hall of Fame.
The Financial Secretary moves on to China’s predicted GDP growth and says at more than 6 per cent, many economies around the world would be happy to achieve such a figure. "China will continue to be a growth driver for the world," he says. "As reforms take place, China is on target to achieve the predicted growth this year," adds the Financial Secretary. He explains that part of GDP growth is being driven by domestic consumption. "The Mainland’s going global enterprises is beneficial to the world, but importantly to Hong Kong," says Tsang, who adds that Hong Kong plays a role in China’s growth through helping to open up the mainland financial markets. "More opportunities will open up through the One belt, One Road developments," says Tsang. "Blessed with many advantages including the CUHK Business School, Hong Kong will continue to play a key role in the development of China and the region," says Tsang.
We now move on to the Officiating Speech which is being delivered by the Financial Secretary of the Hong Kong Government of the Hong Kong Special Administration Region, the Honourable John C Tsang, GBM, JP. To a big round of applause The Financial Secretary begins by saying it is a pleasure to be attending the CUHK’s signature event. He says he remembers clearly and fondly that Star Trek was launched in the US and both are still moving forward today. To mark the half century of success, the Financial Secretary notes that more than 6,000 MBA students have graduated from the CUHK. The Financial Secretary now describes how China hosting the recent G20 conference is an indication of how important China and Hong Kong are in the economic community. "While it is unrealistic to believe the G20 has the silver bullet to cure all the world's problems, the Chinese president did outline how an inclusive effort could help safeguard financial safety," notes Tsang. "Through working together it is believed we can avoid some of the financial sharks," adds Tsang. He observes how the Internet of Things and China’s commitment to develop technology can boost trade and opportunities. "I believe it is important for Hong Kong that the G20 stand strong to encourage international trade," says Tsang.
To begin our busy and exciting day of presentations by high-profile keynote speakers, presenters, and panel members, Professor Michael Hui, Pro-Vice Chancellor and Choh-Ming Li Professor of Marketing at the Chinese University of Hong Kong (CUHK) welcomes distinguished guests, keynote speakers and panel members and conference participants to the CUHK’s flagship event. “The CUHK has a fascinating history and its relationship with China and how it shapes the future of business teaching with a Chinese character," says Hui. He says the CUHK has grown over 50 years from a few departments to a large campus with thousands of students across different departments. Offered the first MBA in 1966 and launched the first EMBA in 1993. "It was the beginning of business education in the area," notes Hui.