Li Ka-shing's 68 Years: A Business History of Hong Kong

The age of the "Superman" is over.

Now that "Superman" Li Ka-shing has retired, the biggest change seems to be that no one can put questions to him at the Cheung Kong group's shareholder meetings any more. Questions for a 90-year-old elder of the business world — about Hong Kong's economy and its politics, and about where Hong Kong's young people are supposed to go from here.

Those are the questions Hong Kong people care about, inside the hall and outside it. Hardly anyone worries that the Cheung Kong companies might not survive — for years they have been bound up with Hong Kong's property, ports, retail, telecoms, water and electricity. Nor does anyone worry that Li Ka-shing might botch a deal: since people handed him the title "Superman" in 1979, nobody has taken it back in nearly 40 years. It is the other questions that have left people short of breath these past few years.

And apart from Li Ka-shing, who else was there to ask?

In 2016, after the credit rating agency Moody's cut Hong Kong's long-term debt outlook from "stable" to "negative" and made people still more anxious about an economy that was already going nowhere, Li Ka-shing's view mattered enormously. At a press conference he said the Hong Kong government's finances were sound and its reserves ample: "there's nothing wrong, so Moody's should take another careful look." He also rejected the idea that Hong Kong would be dragged down by the mainland, saying the mainland was what Hong Kong's politics and economy rested on, and that without its support, "I believe the Hang Seng Index would fall by at least half."

Last Friday, March 16, at CK Hutchison's results briefing, Li announced he was stepping down. A reporter asked him again: you sold The Center — are you really pulling your money out of Hong Kong? Talk of capital flight, Li said, shows a lack of basic economics. He was still bullish on Hong Kong and would keep bidding for land. Coming from Li Ka-shing, that was at least some comfort.

Someone at the same press conference asked what he thought of girlfriends who won't marry until you buy a flat. "Don't make buying a home so important," Li said. "If a girl says no flat, no marriage, then if it were me I'd say: you're still young, go and find someone else."

Since he started out in 1950, this Hong Kong man of Chaozhou ancestry built a legend from nothing. He began as a shop boy in a watch workshop and, taking the opening Hong Kong offered as the world's entrepôt, became the city's plastic-flower king. Over the decades in which Hong Kong property took off, he moved into real estate, ports, retail, energy, telecoms and pharmaceuticals, and assembled a vast commercial empire — first in Hong Kong, then quickly in mainland China, and finally all over the world.

As Lee Kuan Yew put it, Li Ka-shing never created a product brand anyone praised; mostly he bought and sold. But his judgment was exact. Again and again he bought at the bottom and sold near the top, and in 1999 he became the richest man in Asia, a title he took back many times.

The Hong Kong writer Chip Tsao told QDaily that Li Ka-shing stood highest in Hong Kong's esteem from the 1980s to the early 1990s. Unlike the tycoons who had already grown old, he was neither a local comprador like Robert Ho Tung nor a rich man out of Shanghai like Y.K. Pao or Run Run Shaw. Li was the model self-made man: once he had money he went around the world buying assets, flying the flag of Hong Kong capital. The drama Below the Lion Rock was then a hit on Hong Kong television. "Li Ka-shing was the Lion Rock spirit made flesh," Tsao said.

Li Ka-shing stands for Hong Kong at its best. Spared the worst of the war, Hong Kong built up processing industries from the late 1940s, then rode the growth of global trade to become Asia's logistics hub. By the late 1980s it was the world's busiest container port, and Hong Kong merchants were the largest single source of outside investment into the mainland. A newly risen Hong Kong middle class began spending on better things, which pulled along telecoms, supermarkets, entertainment and, of course, property. Li was there for every one of those steps, following the trend at first and later setting it; at one point his family's companies accounted for 13% of the entire Hong Kong stock exchange by value.

But as the argument over soaring home prices sharpened in the mid-to-late 1990s and the gap between rich and poor widened, the same facts about Li's businesses read differently — his private residential holdings amounting to one-seventh of all Hong Kong's; Hutchison Whampoa still holding 12 berths at Kwai Chung and handling nearly half the port's containers; ParknShop taking 70% of the city's supermarket trade. What Li symbolized had changed. People even invented a joke about the "Li Force Field": it is Li who makes typhoons weaken as they approach Hong Kong, because he needs you at work as usual.

Plenty of young people still treat Li Ka-shing as an idol. But plenty also complain that in the Hong Kong he helped build, the old glory is gone and nobody will ever get the chance to become "the next Li Ka-shing."

When an era ends, though, people looking back tend to put the present aside and remember the best of times. That goes for Li Ka-shing, and for Hong Kong. Over the past three days, Hong Kong's front pages have mostly been about the curtain coming down on an era, and about Li Ka-shing as the symbol of the Hong Kong spirit.

Li Ka-shing's 68 years in business are also a business history of Hong Kong.

Hong Kong's processing industries began in the 1940s, on Shanghai capital and mainland migrants

In the early years of British rule, Hong Kong's first role was as a free port. In population and in industry alike, it was no match for the Shanghai of the same period. In 1930 Hong Kong's population was only 27% of Shanghai's.

Li Ka-shing came to Hong Kong from Chaozhou with his parents, fleeing the war. It was 1940 and he was 12, and the place he arrived in was a free port. The colonial government was pro-business: low profits tax, tight limits on social welfare spending and minimum labor protections, free trade, and capital free to come and go.

Li's first job was as a clerk in his uncle's watch workshop, which later became a watch company.

When the war ended, the flow of capital and migrants into Hong Kong hit a peak. Between 1946 and 1950, no less than US$500 million came in from mainland China in the form of goods, securities, gold and foreign currency. More than a million people came with it, and together with Li Ka-shing they would rebuild Hong Kong's postwar economy. Over the decades that followed, births in Hong Kong also peaked, producing the baby-boom generation.

Li Ka-shing paid close attention to business ties with the mainland from the very start.

When he decided to found Cheung Kong Plastics in 1950, he meant to export to the mainland, and trade between the two looked promising. The fighting was over, and in January 1950 Britain's Labour government recognized the People's Republic of China. But Hong Kong's businessmen quickly sensed how unstable the politics were: Sino-British relations soured during the Korean War. That shook the confidence of the British trading houses — foreign merchants have always been quicker to give up on Hong Kong's future. "Our good days are over," sighed John Keswick of Jardine Matheson.

Fortunately the United States allowed Hong Kong-made goods in, and America gradually grew into Hong Kong's biggest export market. Hong Kong was one of the first places to join the postwar world trading system.

The Cheung Kong Plastics that Li founded, though, was just one ordinary firm among more than 300 plastics factories.

The two biggest of them, Chung Yuen Plastics and Kader Industrial, had been moved to Hong Kong in 1947 by two wealthy Shanghai merchants who feared war and nationalization. The workers they hired were mostly mainlanders who, like Li Ka-shing, had fled to Hong Kong around the time of the war.

But while everyone else was making plastics, Li saw plastic flowers. Seven years in, he read about Italian plastic flowers in a trade magazine and flew to Italy to see for himself. Cheung Kong Plastics became the world's largest maker of plastic flowers, and Li was crowned the "Plastic Flower King."

As British capital gave way to Chinese, Li Ka-shing's empire truly began

In 1963 two Texas property men brought Hilton to Hong Kong and spent US$14 million opening the Hong Kong Hilton. The 900-room hotel stood in the middle of Central, Hilton's largest outside North America, and its rooftop Eagle's Nest nightclub became a haunt of the city's elite.

According to The New York Times at the opening, an investment on that scale was read at the time as a sign that Hong Kong would stay independent of China for the foreseeable future.

The handover began soon enough, and it began in business. From the late 1960s to the early 1970s, Hong Kong's baby boomers came of age. "There was nobody ahead of us," Chan Koonchung recalls.

When the boomers went to work, in one swelling, rising industry after another they were the first well-educated Chinese employees, and the people directly above them were foreigners or capitalists. "It seems that family and school, culture and society all happened to have prepared my generation in just this economic direction, ready for the quarter-century of rapid growth that followed," Chan said.

Plastic flowers gave Li the first capital he needed to move into property. In 1958 he bought his first building.

Li's generation of Hong Kong merchants all built their fortunes fast on real estate. Even after they had spread into dozens of industries, people still called them property tycoons out of habit.

In the 1960s, relations with the mainland once again tested businessmen's judgment. The Cultural Revolution, starting in 1966, reached Hong Kong: unrest, a collapsing property market, businessmen fleeing. Li judged that this was not the end of the good times, coolly bought up a great deal of property, and made his name.

Cheung Kong Real Estate was founded in 1971; in 1972 it was renamed Cheung Kong Holdings and listed. Before the crash of 1973 came, the Hang Seng Index hit an all-time high in 1972 — seven times its 1969 level, on 16 times the trading volume.

In the late 1970s China and Britain opened talks on Hong Kong's return, which ended with the Sino-British Joint Declaration in 1984.

Through that transition Li Ka-shing was seen as the man the colonial government had picked to hand things over to. In July 1978 he still showed little appetite for buying up foreign trading houses, and sold his large stake in Wharf to Y.K. Pao. But in September 1979 he announced he would buy HSBC's 22.4% stake in another trading house, Hutchison Whampoa. He kept adding to it, and by 1981 he was chairman of Hutchison Whampoa, a company whose businesses would later reach across China and overseas.

"By the late 1970s the British had decided to get out. They wanted someone respectable, obedient and reliable. The merchants from Shanghai had grown old, the second generation of local compradors wasn't up to much, so they picked Li Ka-shing and had HSBC lend him the money. He took over Hutchison Whampoa, and that was the start of his empire," Tsao recalls.

Taking over Hutchison Whampoa made Li Ka-shing the first Chinese taipan in Hong Kong (taipan, the head of a foreign trading house, comes from Cantonese). The nickname "Superman" arrived at about the same time.

Hong Kong capital took manufacturing to Guangdong and turned itself toward property and finance

Xi Zhongxun inspected Shenzhen and Zhuhai in 1978 and, as Guangdong's party secretary, granted Shenzhen, Guangzhou and the Pearl River Delta a long list of favorable policies. "If it raises output, do it," he said at the time. "Don't start by attacking what -ism it is. They are capitalists, but some of their methods are good and we should learn them."

That September Li Ka-shing was invited, as part of a Hong Kong and Macau delegation, to the National Day ceremony in Beijing. Apart from the occasional case of someone slipping across the border into Hong Kong, and the official shipments of food that kept coming during the famine years, Hong Kong and the mainland had had no open contact for years. Even this trip was arranged through the Hong Kong branch of the Xinhua News Agency, at the time one of the main channels between the two sides.

It was also Li Ka-shing's first visit to the mainland in 39 years. No public record says how he felt about it.

Less than three months after the Hong Kong businessmen were invited north, on December 18, 1978, the Third Plenary Session of the 11th Central Committee announced reform and opening. Shenzhen would open first; word had been out since the start of the year.

Shenzhen hoped to copy the free port next door. That produced the mainland's first export-processing zone, at Shekou, with factories, a port and a railway. It could not go as far as Hong Kong's simple low-tax regime, with no exchange controls and no interference in how a business was run, but it did offer preferential policies to draw foreign firms in.

The Shekou project was run by China Merchants, one of the state-owned enterprises that had quietly operated in Hong Kong since the war. The others included China Travel Service, Bank of China and China Resources, which had long monopolized the movement of goods between the two sides.

While Shekou was being cleared, a group of Hong Kong businessmen were invited up to see it, in the hope of interesting them in moving manufacturing and exports there. Li Ka-shing asked whether Hong Kong merchants could take equity stakes and help build Shekou — a deeper kind of involvement. Yuan Geng, who ran Shekou at the time, said nothing in reply.

Officials remained cautious, but business between Hong Kong and the mainland did pick up.

Hong Kong money began going into the mainland. From 1979 to 2004, 66.2% of the foreign direct investment Guangdong attracted came from Hong Kong, worth US$996 billion. And from 1985 to 2003, 30% of all the foreign direct investment China attracted went to Guangdong.

Hong Kong meanwhile became the door through which overseas companies entered the mainland. In 1978 Hong Kong's economy grew 12%, foreign firms opened offices there one after another, and the Hang Seng Index rose 22%.

In the first years after the special zones opened, Hong Kong's trade jumped. From the 1980s to the mid-to-late 1990s, total trade grew 20% a year. In 1988 it passed South Korea, Taiwan and Singapore to lead the Four Asian Tigers, second in Asia only to Japan. When A Better Tomorrow came out in 1986, it swept the region.

By 1998, Hong Kong manufacturers employed some 5 million workers in Hong Kong and on the mainland, five times the 1984 figure. This was the period that produced the phrase "shop in front, factory behind" — Hong Kong the shopfront, the mainland the factory. Multinationals chose Hong Kong for their regional headquarters, an arrangement Hong Kong both made possible and profited from. Hong Kong merchants knew how business worked on the mainland and, more to the point, their finance, remote management, accounting, transport and logistics services were first-rate. Both sides prospered.

For Hong Kong, the trouble had already started. In the early years, Hong Kong firms moved only the simple production to Guangdong and put little into research. As European and American companies began setting up R&D centers in China, Hong Kong capital did bring more modern technology and management into mainland factories, but its edge was gone. In the end, as its manufacturing moved out, Hong Kong produced no company like Apple or H&M — one that hands off the making and keeps a firm grip on the value of the product.

In 2011, after his book Hard Truth came out, Lee Kuan Yew was interviewed by a Straits Times reporter about Singapore's economic prospects. Size limits what a small place can do, Lee said, industry above all. Then he offered an example: "Look at Hong Kong — what has it got? Property developers and investors. Does Li Ka-shing have any product that sells around the world? No. He just buys property, ports, retailers and telecom companies."

For Hong Kong merchants moving into property, though, none of this was yet a problem. The mainland property business was only starting.

From the 1990s, Hong Kong capital shaped Shanghai's commercial property, and Hong Kong's exchange raised money for state firms

China's two stock exchanges were set up in the early 1990s, but there was not enough cash at home to meet the demand for financing. The Hong Kong exchange, meanwhile, sent people to look around the mainland and study whether mainland state enterprises could be drawn into listing there — which would also fix the problem of a market tilted too heavily toward property.

After Vice Premier Zhu Rongji met the exchange's chairman, Charles Lee, they decided to pick about ten state enterprises to list in Hong Kong. Tsingtao Brewery listed on June 29, 1993.

That chain of events can be traced back to Li Ka-shing too. Cheung Kong Holdings listed in Hong Kong in 1972 under the code 0001, at a time when the city had four exchanges. In 1986, for regulatory reasons, the four formally merged, and every stock code was reassigned. Li Ka-shing's Cheung Kong Holdings became 0001 — because, as people generally understood it, Cheung Kong was then the company that best represented Hong Kong.

CITIC's Hong Kong arm, set up before reform and opening, had invited Li Ka-shing early on to be its chairman. By 1990 he had helped CITIC buy a Hong Kong-listed company for HK$700 million and take it public through the back door.

After CITIC came the "red chips." The term marks out a listed company with a Chinese background, whose largest controlling stake belongs directly or indirectly to a mainland government body or enterprise, and it also places its value between the best blue chips and the lowliest white chips.

The mainland property projects of Li Ka-shing and other Hong Kong merchants mostly began around then. Hong Kong money started pouring in.

The mainland needed developers more than Hong Kong did. In Hong Kong the government had already declared war on them; one commentator said Li Ka-shing was "like a giant whale stranded on a beach." On the mainland the government was short of money and had nothing to trade with — except land, the most valuable thing it held. In a documentary about Shanghai's old-city redevelopment at the time, district officials negotiate with American and Hong Kong developers over the development rights to central plots, and move residents out to the suburbs. At the groundbreaking the developers brought in the most famous Hong Kong star of the day, Jackie Chan, who said the changes on the mainland were enormous.

According to the Shanghai Local Chronicles Office, the number of Hong Kong merchants investing in property and construction rose from five in 1990 to 327 in 1994, second only to the 379 in trade and commercial services, and "most of the extra-large projects worth over US$100 million were property investments."

By 1995, half the building projects in the Lujiazui finance and trade zone came from Sino-foreign joint ventures or wholly foreign-owned firms. Of the 37 projects with foreign involvement, two-thirds were mainland-Hong Kong ventures or wholly Hong Kong-owned.

Looking at it now, Shanghai's commercial property was more or less shaped by Hong Kong capital. K11 belongs to New World Development; IAPM and the International Finance Center in Lujiazui were built by Sun Hung Kai Properties; Xintiandi belongs to Shui On Land; Plaza 66 belongs to Hang Lung Properties.

Li Ka-shing had the biggest name of all the Hong Kong merchants, but he kept a low profile in mainland property. Coming to the mainland did not much change his style of investing. In Hong Kong, the best sites on Hong Kong Island had been taken long before the Hong Kong merchants made their money, by old foreign houses like Jardine Matheson and Swire.

Before the Asian financial crisis of 1997, property development brought in most of Cheung Kong Holdings' sales revenue, but usually in cheaper districts, mostly residential, including a fair number of low-cost public housing estates built with the government.

In Beijing and Shanghai it was the same: landmark commercial buildings were rarely owned by Cheung Kong Holdings or Hutchison Whampoa, or at least were rarely known to be. The most conspicuous was Oriental Plaza on Beijing's Chang'an Avenue, invested in 1992 and generally regarded as a failure.

Li Ka-shing's early mainland property projects were mainly in the south, closer to Hong Kong and to his ancestral Chaozhou: the "Sleepless City" center in Shanghai, the Shenzhen Foreign Trade Center, a villa district in Guangzhou and an international school for expatriate children; residential projects in Beihai, Guangxi and Dongguan, Guangdong; and the much-criticized renovation and rebuilding of Fuzhou's Three Lanes and Seven Alleys.

He also invested on the mainland in docks, power plants and highways. In 1992 he put money into Shanghai's Jinshan standard container terminal and an international deep-water port terminal. In 1993 Hutchison Whampoa was allowed to take a 70% stake in Shenzhen's Yantian Port and to invest 6 billion yuan alongside it in a container terminal — the largest foreign-investment project the mainland took in that year. One of Yantian Port's directors was Ma Chenshu, Pony Ma's father.

Shantou University was completed in 1986. Li Ka-shing had decided in 1980 to fund it — a public university kept going by a private foundation, an arrangement with no precedent anywhere in the world. The Li Ka-shing Foundation was formally established the same year. In 2002 the foundation endowed the Cheung Kong Graduate School of Business.

Watsons and Chow Tai Fook are two important Hong Kong retail brands, belonging respectively to Li Ka-shing's Hutchison Whampoa and Cheng Yu-tung's New World Development. By 2017 Chow Tai Fook had 2,246 retail outlets on the mainland, and the mainland market supplied 75% of the group's operating profit. Watsons' main market is Europe, but its mainland business still took in HK$20.9 billion (18.5 billion yuan) in 2016.

Even so, most observers still regard property as the Hong Kong merchants' main mainland business. New World holds the most: 26 million square meters of mainland land in reserve in 2015, 1.26 times the area of Shanghai's Huangpu district. At its 2007 peak, Cheung Kong Holdings held more than 18.6 million square meters. By China Economic Weekly's count, over the past 10 years the share of Cheung Kong Holdings' total turnover coming from mainland property and hotels rose steadily from 10% in 2005, passing the Hong Kong market in the 2013 financial year to peak at 50.9%.

But after 2005 several of Li Ka-shing's mainland plots sat undeveloped for years and were eventually sold on. In 2007, for instance, he bought the 3,800-mu Bihai Yinhu site in Jiangmen, Guangdong, planned as "a large integrated commercial property project combining a yacht club, polo, shopping, leisure and high-end housing." He sold it on February 28 this year.

Once Hong Kong merged into China's economy, what the mainland wanted from it changed

As manufacturing moved out, the factory buildings it left behind were turned over to property development; some people even closed or relocated docks to put housing on the land. Property took a steadily larger share of Hong Kong's public revenue, and the big developers kept making money from it.

Through these years Li Ka-shing invested heavily in infrastructure and moved into everyday services. In 1985 Hutchison Whampoa launched a mobile phone business in Hong Kong; that same year it acquired Hongkong Electric Holdings, now Power Assets Holdings. In 1996 it pooled the marketing and operations of its mobile, paging and fixed-line services and announced the creation of Hutchison Telecommunications.

Li was so sure about the future of the mobile phone that he turned salesman himself. When Hutchison started the business, Motorola had launched the first commercially sold handset only two years earlier, and few people saw the point of spending tens of thousands to be able to make a call at any moment. One day Li turned up at a land auction and, in the middle of the bidding, took out his mobile phone and made a call, apparently receiving important information about the sale. The next day the photograph of Li on his phone ran in the South China Morning Post and other major papers.

Add the ParknShop supermarkets and Watsons he had acquired earlier, and Fortress in 1986, and it became hard for most Hong Kong people to get through a day — food, clothes, housing, transport — without touching one of Li Ka-shing's businesses.

Wu Derong, a professor of political science at the University of Macau, describes what happened to Hong Kong's property tycoons in those years this way: "They look more and more like Japanese corporate groups, such as Mitsubishi, or Korean chaebol, such as Samsung" — sprawling across property, hotels, retail, telecoms, container terminals, power and media — "and less and less like the Western business giants, Microsoft or Philips or Volkswagen, that stick to one industry."

By 1997, the ten largest Hong Kong merchant families controlled 45% of the Hong Kong stock market's value.

The Hong Kong business lawyer Mike West told us that the dominance of Li Ka-shing and the other tycoons has made Hong Kong's economy a strange one. "Hong Kong people feel both positive and negative about these tycoons," Joseph Fan, director of the Institute of Economics and Finance at the Chinese University of Hong Kong, told QDaily.

That became especially clear after the Asian financial crisis broke in 1997.

In the first half of 1997 prices were still climbing — residential prices rose 63.62% between the start of 1996 and the third quarter of 1997, and buyers had to queue a day ahead. Then the bubble burst. Prices fell for six straight years, losing nearly two-thirds of their value, and the middle class was left in debt.

Some argue that the Sino-British Joint Declaration signed in 1984 did much to inflate the bubble. "From the entry into force of the Joint Declaration until 30 June 1997, new land granted under paragraph 3 of this Annex shall be limited to 50 hectares a year, excluding land granted to the Hong Kong Housing Authority for rental public housing." The economy grew, the middle class wanted to buy, and the cap on land grants cut supply and pushed prices up. The Jones Lang Wootton residential index shows that over the 13 and a half years from January 1984 to July 1997, Hong Kong home prices rose exactly threefold.

The property tycoons seemed to come through the disaster unharmed. While Hong Kong property was taking its losses, Li Ka-shing's Cheung Kong and Hutchison pushed their property business into the mainland, Singapore and Britain. In 1997 he headed into western China, built Metropolitan Plaza in Chongqing, and told reporters that any Hong Kong businessman who underrated the west would be making an enormous mistake.

After the Asian financial crisis ended in 1999, Li Ka-shing became Asia's richest man for the first time, tenth on the Forbes world rich list, and Time magazine named him "Entrepreneur of the Millennium." He would top Asia's rich list many times after that, and was Hong Kong's richest man for 20 years running.

Hong Kong itself, meanwhile, was doing worse, especially against the mainland's growth rates at the time. In 2005 it lost its place as the world's busiest container port, dropping to third behind Singapore and Shanghai. In 1990 Hong Kong's GDP was 25% of mainland China's; by 2017 it was 2.48% — nine days of mainland output.

People started asking what Hong Kong had done wrong, and who should answer for it. The property tycoons?

Milton Friedman, the Nobel laureate in economics, long held up the "Hong Kong model" and called the city "the last bastion of free-market economics." In Free to Choose, published in 1980, he wrote: "If you want to see how a free market really works, go to Hong Kong."

Some Hong Kong scholars and critics no longer follow Friedman the way they once did. Both Joseph Fan and the business lawyer Mike West told us that Hong Kong is not the best example of a free market, and that the change did not happen only in the past 20 years.

Fan pointed to an irrational land policy and argued that, set beside other emerging Asian markets, Hong Kong is not special at all — "if anything, it's typical." Mike West pointed to the monopolies Li Ka-shing is criticized for, which keep Hong Kong from competing as freely, as healthily and as energetically as the British and American markets do. More and more people accept this view.

Plenty of others, though, look only at the past dozen years or so — after all, Hong Kong's economic decline is that recent. The late Hong Kong political economist Tsang Shu-ki argued in a 2007 paper that the integration of the two economies over the previous decade and more had been asymmetric. Through it, Hong Kong did not improve its industrial structure; it simply did nothing, until most of its industries lost their agglomeration effects.

This grew more obvious after the Closer Economic Partnership Arrangement (CEPA) took effect in 2004 and individual mainland travel to Hong Kong opened in 2003.

On top of that, as China joined the World Trade Organization and gradually opened to outside investment, foreign capital no longer had to route through Hong Kong.

After 1997, cross-shareholding became more and more common between mainland and Hong Kong companies. By the end of 2016, half of Hong Kong's 20 most valuable listed companies had mainland backgrounds, the biggest of them Tencent. They raise money in Hong Kong, but they do not necessarily invest there.

A man who buys low and sells high has found new targets

The standard verdict on Li Ka-shing's business skill is that he knows when to buy, and knows even better when to sell.

Woody Wu, a professor of accounting at the Chinese University of Hong Kong, put it this way: "Li Ka-shing is a master of timing when it comes to selling. He always manages to sell at the best possible price. Financially, he's a genius."

The Cultural Revolution, the handover talks, the repeated swings before reform and opening, the 1997 handover, the Asian financial crisis — the Hong Kong market's confidence in the future has lurched many times. Each time, Li used the downswing to pick up cheaply whatever he liked, property or company.

But now he has started selling.

By QDaily's count, Li Ka-shing has sold at least HK$250 billion of mainland and Hong Kong assets over six years. In 2017 alone he sold about HK$90 billion worth.

In 2015 he stepped up his investment in Europe, and in Britain above all. About a quarter of Britain's electricity distribution market, nearly 30% of its gas supply market and nearly 7% of its water supply belong to Li Ka-shing. "We understand the situation Europe is in," he said, "but I think that within five years the companies here will have room to rise."

Also in 2015, Cheung Kong Holdings and Hutchison Whampoa, both chaired by Li Ka-shing, jointly announced a major restructuring: the new CK Hutchison and Cheung Kong Property would register in the Cayman Islands, meaning that in theory they no longer belonged to Hong Kong. It broke Li Ka-shing's promise never to move his companies' registration.

A generation of tycoons leaving business has added to the worry about how uncertain Hong Kong's economic future is. "What Hong Kong needs most in the years ahead is this: after this generation of tycoons retires and dies, can Hong Kong produce a new spirit of enterprise, new ventures? I think that will be hard, and hard for a long time," said Joseph Fan, professor at the Chinese University of Hong Kong's School of Accountancy and Department of Finance and director of its Institute of Economics and Finance.

Reporter Xinyu Wen also contributed to this article.

Charts / Xiuxia Feng

Cover image SHUJA ZED on Unsplash; the long cover image was provided by the author