Chamber in Review
Embracing Change

Hong Kong is at a political, social, and economic crossroads. To determine the best route forward, it is crucial that businesses, Government and society as a whole work together to find solutions to the problems we face, or our competitiveness could start to erode, business leaders told a full house at the Chamber’s 20th Annual Hong Kong Business Summit on November 26. 

Given Hong Kong’s stable economic growth – the Chamber forecasts GDP to grow by 2 to 3% for the coming year – full employment, strong demand for trade and services, proximity to the Mainland ... many people feel we should be very optimistic about Hong Kong’s future, not pessimistic. 

“We have all those advantages, and many countries around the world would love to have what Hong Kong has now,” said Andrew Brandler, Chairman, Sir Elly Kadoorie & Sons Ltd. “But for students camping on the street, Hong Kong is not delivering on their aspirations. This has to do with people feeling they do not have any say in their future.  However, we need to work within the constitutional framework that we have got. It is not perfect. It is not ideal, but it is progress and one cannot step away from progress,” he added.

CC Tung, Chairman, President & CEO, OOIL, said Hong Kong is one of the freest economies in the world, and our rule of law protects those freedoms. So he questioned if the political protests are being used as a platform for people to raise their grievances, such as complaining about the cost of housing. 
“If this is the case, let’s deal with that, because if we are going to be tackling what we think is a political problem – when it is in fact a social problem – then we are going to be a very divided city,” he said. 

China anxiety  
Another key issue raised was the growing trend of distrust of the Mainland, as young people increasingly see China more as a threat than an opportunity. 

Vincent Lo, Chairman, Shui On Group Ltd, said China has completely changed since he first went there for business in the 1980s. 

“When you read the news about China, it is always negative. But if you go there, it is a completely different story. China is moving very fast, we need to make ourselves aware of what is happening in the country and capture those opportunities,” he said.

Allan Zeman, Chairman, Lan Kwai Fong Holdings, Ltd, echoed his views, adding that young people in the Mainland, who now are very much like youngsters in any other country, are very optimistic and see a bright future. 

The fact that China is advancing rapidly has some people worried. Shanghai is on target to be an international financial centre by 2020, so will Hong Kong’s role as the leading financial centre in the Mainland be eclipsed? 

Lo said there is no guarantee that we will always have that role. “I do not believe Hong Kong will be the only financial centre in the Mainland. We will be one of them, but even that is not a given. We need to compete for our position and prove our worth,” he said. 

Brandler echoed his views: “Shanghai will likely be the dominant financial market of China as its domestic capital market undergoes exponential growth in the coming decades grows, but Hong Kong will have a niche role.”

All speakers viewed closer integration with the Mainland as an essential positive step forward. Making progress will have to be driven by government, and that includes more transparency and information to allow people to be optimistic about the opportunities, rather than worrying about misperceptions.

“One thing that worries me is this very strong anti-China feeling in Hong Kong. That is terrible and storing up big problems. We have to integrate more rather than say the Mainland is a threat to our competitiveness and way of life,” said Brandler.

Summing up the morning session at the summit, HKGCC Chairman YK Pang said, “Recurring themes that speakers focused on were ensuring people’s aspirations are met, tackling the housing shortage, moving forward on constitutional reform and that Government proactively drives forward economic integration with the Mainland. We cannot duck these challenges or soft-peddle them. It is crucial that we address people’s concerns so that we can all focus on, and benefit from, the many positives that Hong Kong has to offer.” 

Innovative business model
Capping off the summit during the keynote luncheon address, Victor Fung, Fung Group Chairman, was very positive about opportunities that Hong Kong can take advantage of. He said 630 million middle-class people will emerge in China in the coming decade, which not only presents huge opportunities for businesses, but also for changes in the way people do business. 

On the wider horizon: “The next 30 years will see the emergence of 3 billion new middle-class people, powered by rising incomes in Asia, particularly China and India, and opportunities for business and job creation for Hong Kong will be greater in the next 30 years than in the past 30 years,” said Fung. 

Recollecting the success that Hong Kong enjoyed after shifting its manufacturing economy to the Mainland, he said we need to find another new innovative business model. We need to be similarly bold in seeing change as a positive driver not a threat to our existing way of life.  

“The whole world is moving towards a new economic model. Nobody can continue to do what they have been doing. We need to find a new set of innovative business models in light of the changing business world and be the first ones to perfect the transition,” he said. “Hong Kong has done this time and again. I am not inventing anything new here. We have these capabilities, and we need to put them together and build new ideas.” 

Chamber CEO Shirley Yuen said it was clear from speakers that integration with the Mainland, engagement with the community to address their aspirations, grievances, and closer communication among parties is essential for building a better Hong Kong. 

“Our speakers also pointed out that it is essential Hong Kong continues to invest in the hardware to keep driving growth forward. Projects like the high-speed rail, the new bridge, the third runway, etc are crucial for this integration and retaining our competitiveness,” she said. “We also need to pay close attention to ensuring our young people, who will be the future leaders of Hong Kong, have the opportunities to learn and grow in a changing world, and that they embrace these changes.”  

Reinvigorating the Entrepreneurial Spirit
‘Tycoon’ has become something of a dirty word in recent years, as businesses get blamed for many of societies’ woes, while fear of competition from the Mainland is eroding Hongkongers’ optimism about their future prospects. Unless people’s concerns and aspirations can be satisfied, Hong Kong could be in for a bumpy future.  

On the General Committee Panel Discussion, moderated by entrepreneur Dr Aron Harilela, business heads shared their views on these challenges and how we can find a way forward. 

Pumping Iron
By 2020, Mainland China will likely be the world’s largest economy. The growth of North Asia and Southeast Asia will see an explosion in middle-class consumption, and the renminbi may even have become a G4 currency. 

Benjamin Hung, Regional Chief Executive Officer, Greater China, Standard Chartered Bank (HK), said he sees these two markets as a vertical dumbbell, with the top weight being the Mainland and India, and the bottom weight being Southeast Asia. “Hong Kong is the bar linking them together. But it has some stress points – pollution, housing prices ... lack of upward mobility – and if these remain unchecked, they will be exacerbated over time,” he said. 

Hong Kong can connect these two huge markets, but if we do not address the issues, others will take our place. Hung said corporations must ensure they do not just focus on making profits, that businesses give back to the community, lend support to tackling pollution and promoting diversity, etc. Economically, he believes Hong Kong’s future is bright if we play our roles well, but corporations also need to contribute to ensure the bar of the dumbbell is strong. 

Land of Opportunity
John Slosar, Chairman, Swire Pacific, said it is vital for all people to have a sense of hope so that they aspire to improve their lives. The Mainland should be seen as a land of unbridled opportunity, not something to be feared. 

“China should be seen as a land of opportunity, a place for people to set up their own businesses, and we need to get that message across to more people,” he said. “When we wanted to post people to China 15 years ago, it used to be very hard to find someone willing to go there. These days, that has totally changed, and our young graduates even ask to be posted in China so that they can get that experience and exposure.” 

His young staff are engaged with the Mainland. They understand about what is happening across the country, “so we need to connect more with people to let them know about China and open their eyes to the opportunities it offers.” 

Building Trust 
Betty Yuen, Vice Chairman, CLP Power Hong Kong, said she feels businesses’ credibility with the public has declined, and people view businesses as dishonest, self-interested and their success is at the expense of the public.

Ignoring public perceptions and expectations will be to the detriment of any business strategy. Customers have different expectations, “but in any strategy, not just business, if you do not engage people then you are doomed to failure,” she said. 

She also suggested that businesses play a more active role in politics, even though they prefer to be apolitical, as well as in engaging with the community. Given the Government’s credibility is seen as very poor among the public. Information in the media is often one side of the story and biased. “So obviously the public’s perception of businesses is negative, because that is all the information they are getting. The business community has to communicate with people, be transparent and open, then people will be better informed,” she said. 

Time for Change
Dr Allan Zeman, Chairman, Lan Kwai Fong Holdings, said Hong Kong is at a crossroads. “The system is broken and unless we sit down and think about the way forward, I am pessimistic about our future, even though I am the eternal optimist,” he said. 

People in China criticize government and vent their grievances, as people do in any country, but rapid changes in cities across the Mainland are improving people’s lives and creating an energy and optimism that used to buzz through Hong Kong. 

“The way Government runs has to change. LegCo has to change. Businesses have to change. Today it is a swear word to say you are a tycoon. When I was growing up I used to look up to tycoons. I wanted to be successful like them. So we must get our house in order first before we can go forward. We cannot run away from the issues affecting Hong Kong,” he said.  

 

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