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[BUSINESS] Li Ka-Shing Interview (Yazhou Zhoukan)

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  • madchinaman
    Create a New Legend (Yazhou zhoukan) Date: 21 June 1999 http://www.lksf.org/eng/media/interview/19990621_01.shtml Li Ka-shing created a miracle in the Hong
    Message 1 of 1 , Feb 27, 2004
      Create a New Legend (Yazhou zhoukan)
      Date: 21 June 1999

      Li Ka-shing created a miracle in the Hong Kong real estate market,
      but quite a few years ago, he had already foreseen the weaknesses of
      the property bubble. In an exclusive interview with Yazhou Zhoukan,
      Li Ka-shing, pointed out that at present foreign investors account
      for less than 5% of the local real estate market, and that for Hong
      Kong to earn more foreign currency, it must diversify and develop
      high tech and other value-added industries. He said that as we enter
      the new millenium, Hong Kong must overcome its obsession with

      Li believes that the financial crisis has sent Hong Kong a very
      clear signal -- the high land price policy has reached the end of
      the road, and that it is time for a re-think. He commented that some
      property developers only hope that profits from property would go on
      indefinitely, but that was very narrow minded and would only impede
      Hong Kong's future development. The Government's support for the
      Cyberport and other high tech projects means that it understands the
      need to diversify, and to create new opportunities for Hong Kong. Li
      said, "Pain is unavoidable as the economy undergoes transformation.
      But we must support the Government's policies and continue to
      develop businesses which we have the capability to handle and have
      established a good foundation on which to work."

      After the Asian financial crisis, Hong Kong is faced with the task
      of reinventing itself. The Government is promoting projects such as
      the Cyberport, International Chinese Medicine Centre, and
      international cruise terminals for Hong Kong's future development.
      Li has no doubt that the Government's policies will benefit Hong
      Kong in the long run.

      Long before the Asian financial crisis, Hong Kong's property
      business was booming and the prices were escalating at a very fast
      pace. The economy seemed to be going strong, but the situation was
      actually like a few brothers playing mahjong against each other --
      winnings and losses were all kept within the family. Li took steps
      to diversify and globalize his business quite a long time ago. He
      now has investments in 24 countries, employing a total of over
      80,000 people. Businesses that Li's group are involved in include
      hotels, container terminals, retailing and manufacturing,
      telecommunications, infrastructure and energy. Li believes that for
      Hong Kong's economy to restart after the financial crisis, it must
      look beyond property to create more value-added industries. He hopes
      that one day, Hong Kong can earn its foreign currency from
      industries such as technology, service and tourism.

      Li said that for his Group it was most important that the business
      they engaged in earn foreign currency and create employment
      opportunities. The Cyberport project has been a much talked about
      topic for a long time. But actually, there had not been many people
      in Hong Kong interested in high tech businesses. "We must understand
      that Hong Kong cannot survive on property alone. Property is
      important for the domestic economy, but don't forget, foreign
      investment in our property market accounts for not more than 5%. So
      what can we depend on to earn foreign currency and attract foreign
      investors?" Li continued, nowadays industries in general find it
      difficult to survive, trade is on the downside, container terminals
      are affected by competition from mainland ports, and even tourism
      has been hit. It is important to establish other key industries to
      attract foreign capital.

      Li recently retired from his post as Managing Director of Cheung
      Kong but remains as its Chairman. He will gradually reduce his
      workload and let his eldest son Victor take over the reins. Li
      senior, however, will still be consulted on major decisions. Li
      continues to head Hutchison Whampoa, but he is also hatching new

      At 71 years old, Li is about to write a new chapter in the legend of
      Li Ka-shing. He is determined to challenge the saying that "wealth
      does not pass down three generations" in Chinese families. He is
      trying to systemize the running of his business empire and
      incorporate his own personal management philosophy so that both his
      business and his philosophies will live on forever.

      "Don't believe that Chinese learning is for foundation and Western
      learning is for application. Chinese learning can also be applied,"
      Li said, quoting a Qing Dynasty saying. He commented that it was
      necessary to have a system of reward and punishment, and to make
      good use of talent, but most importantly there must be checks and
      balances within the system. He cited Barings as an example. Years
      ago, a hole in the Group's operations in Singapore allowed one of
      its traders to lose a huge sum. This was the fault of not only the
      individual trader, but of the system itself.

      An organization must be complemented by professional and human
      management. Li pointed out that the turnover rate among his staff is
      very low, which can be attributed to the sense of belonging that he
      instills in his staff. "Even when they retire, both the organization
      and the staff feel sad."

      Has Li ever fired anyone? The answer is yes. Sitting in his large
      office at the new Cheung Kong Center in Central, Li recalls a former
      middle rank manager who was discovered to have made personal gains
      using his authority. His conduct was commercially and legally
      unacceptable. Li had no choice but to ask him to leave because it
      was a matter of principle.

      What Li perceives as most important in business operation and
      management is knowledge, as he sees a close correlation between
      knowledge and fate. He never ceases to acquire knowledge and enrich
      himself. He was born into an educated family. His father was a
      respected teacher. Due to the turbulence at the time and the early
      death of his father, Li did not receive much of a formal education.
      He began his working career while still in his teens. He started
      from zero and slowly built a business empire. But even today he
      continues to read before going to bed every night.

      Li will receive an Honorary Doctorate of Laws degree from University
      of Cambridge later this month. Li's relationship with Cambridge
      University began years ago, when Felixstowe Port, operated by
      Hutchison Whampoa, leased a piece of land owned by one of
      Cambridge's colleges. Li also initiated a research project at
      Cambridge that aims to fight cancer.

      Li cares greatly about the dissemination of knowledge. In April this
      year, as support for Beijing's policy of "Building the Country
      through Science and Education", Li established the Cheung Kong
      Scholars Programme and the Cheung Kong Scholars Achievement Award in
      cooperation with the Ministry of Education. The schemes aim to
      provide extra incentives for mainland academics. With initial
      funding of HK$70 million, the schemes will benefit up to 1,000
      specially appointed professors, who will each receive up to
      HK$100,000 in allowances every year. Outstanding scholars will also
      be chosen each year to receive the Cheung Kong Scholar Award with
      the prize being HK$1 million.

      In recent years, Li has begun building a new career. Having already
      donated HK$2.8 billion (around US$360 mil.) toward charitable
      causes, Li is paying greater attention to community and charity
      services. Western entrepreneurs such as Carnegie and Rockefeller put
      in large sums of seed money and operate charitable funds the way
      corporations are run. These funds are set-up in such a way that they
      can be self-run and self-financed. Li Ka-shing appreciates this set-
      up and is fully committed to creating one.

      Over the years, he has been a strong supporter of medical and
      educational projects in Hong Kong and the mainland. He said that he
      hoped he could be guided by forces from above that would "tell me
      what I can do to benefit our people and mankind. I would like to do
      more meaningful deeds. I don't care how much money or how much
      energy it takes. I have very simple needs. With the blessings that I
      have received, I have no need for more wealth. But if I can do more
      for mankind, for our people, and for our country, I would be more
      than happy to do so."

      Li has received a number of honorary degrees from universities in
      Beijing, Hong Kong, and Canada as recognition for his contributions.
      Other renowned universities in Western countries have offered him
      similar degrees, but he has turned them down. Li has his own
      principle in accepting awards. "These universities must be familiar
      with me and what I do, and I must have made some sort of
      contribution to benefit their society or educational development in
      order to accept honours."

      Li is a man of principles. Not long ago, he made an investment on
      Grand Bahama Island which included container terminals, an airport,
      hotels and a golf course, and became the biggest foreign investor
      there. The Bahamas Government offered Li a much sought-after casino
      licence as a gesture of thanks. Li declined politely. "I have set
      boundaries for myself. There are certain businesses I won't get

      The Prime Minister of the Bahamas said to Li: "There are many
      businessmen who want this licence, but we have not offered it to
      them. We want to give it to you because you have such a large
      investment here. You have three hotels, and you can put the casino
      in any one of them." Feeling it difficult to say no, Li then made
      a "compromise". He declined the casino licence, but offered instead
      to build a new building outside of the hotels for the casino to be
      operated by a third party. Hutchison Whampoa would only receive rent
      from the third party. "I don't care where our hotel guests go, but
      the casino will not be built inside my hotels," Li said. "This is my
      principle, and I will stick to it."

      Shantou University is the biggest of these projects. Since the
      project was approved in 1981, Li has put in a great deal of money
      and effort. To date he has donated more than HK$1.2 billion toward
      the university. Every year, the University needs to meet operating
      expenses of RMB120 mil.(i.e. around US$14.5 mil.). Li settles 70% of
      this, while the Guangdong Government takes up the remaining 30%. It
      is not possible to put a monetary value on the energy and effort
      that Li has put into this University.

      Li said, since the 1980's, the type of work that requires him to
      work overnight are all charity related. He is fully involved in the
      projects, giving both his money and his energy. The annual Shantou
      University Council meeting is one which Li would not miss attending.
      Once he almost fainted during a meeting at the Shantou University
      Medical College due to exhaustion from long hours of work.

      Li is not superstitious and firmly believes that each person holds
      the key to his own destiny. In 1955, Li started expanding his
      business into a medium sized factory, received several months'
      orders and bought new equipment. He rented a 20,000 sq. ft. factory
      that was about to close down.

      One of the workers at the factory told him, "Mr. Li, I have never
      seen a young man as hard working and polite as you. But the people
      doing business here at Smithfield Road have all failed and lost
      money. No one has ever made money. When my boss first came, he was
      also full of confidence, but now the factory is on the verge of
      closing down. The two factories next door will also close down soon.
      You are still young. You should forfeit your deposit and take your
      losses and leave." Li thanked the worker, but said, "That would be
      impossible. I already have the orders, and I have bought new
      machines. If I don't go into production, I'll let my buyers down. I
      can't do that."

      After Li moved in, he ran his business prudently and worked very
      hard. Business was good, and the factory earned a full year's
      operating expenses within the first month. In less than a year, the
      two factories next door also closed down, and Li rented those
      premises as well. He stayed there until he bought his own premises
      for the factory. When he left Smithfield Road, many other
      businessmen wanted to rent these factories. Li expressed, "You can
      believe in Fung Shui if you want, but ultimately people control
      their own fate. The most important thing is to improve yourself and
      give it your best. Then many things previously thought to be
      impossible will become possible. Broaden your vision, and maintain
      stability while advancing forward. That is my philosophy." And that
      is why Li gets personally involved whether it be business or charity.

      The night before the interview, Li fell asleep while reading in bed.
      The 71-year-old Li still feels a sense of urgency in regards to
      acquiring knowledge. Books on philosophy and technology are his
      favorite. "I never stop reading about new technologies and new ideas
      because I don't want to be left behind by time," he stated.
      Knowledge reshapes destiny. As Li continues to acquire knowledge,
      his fate continues to evolve.

      Challenging Hong Kong's Competitiveness

      Li told us two stories that reflect the difficult challenges that
      Hong Kong is facing. The Beijing secretary of a Cheung Kong
      executive earns RMB 5,000/month and speaks fluent Chinese, English
      and Japanese. There was one time when this executive had just
      finished an important meeting with Government officials and needed
      the meeting's minutes to be written into a report immediately. He
      was stuck in a traffic jam, so he phoned his secretary and dictated
      the report. When he arrived at the office, a flawless report was
      ready and waiting. Not a single word needed amendment. Li said,
      compared with Hong Kong office staff, it was difficult just to find
      someone with good Chinese skills, not to mention the difference in

      Li believes that in the age of the information economy, Hong Kong's
      education system should encourage students to learn and think
      independently. Li feels that students in the 60's and 70's had
      better language skills than today's students when they finish
      school. Besides acquiring knowledge, students should also learn
      methodology, innovative thinking, perseverance, professionalism, and

      Once, Li was playing golf with friends in a private club in Japan.
      They were playing faster than the people ahead of them, and while
      they waited, they noticed the female caddie pulling up weeds during
      the intermission in play. In contrast, Li said, the student workers
      employed during the summer to pull up weeds at the Hong Kong golf
      clubs always appeared slack and unmotivated. They were paid to pull
      weeds and yet they were far less efficient. "Even though it was none
      of my business, I felt sad," Li exclaimed. Li hopes young people
      will put in more passion and respect towards their jobs and work

      As Hong Kong faces a changing landscape of technology and
      information, the younger generation must not cease their quest for
      knowledge. Li said, "In the age of information economy, if you have
      capital but lack the latest information, no matter what business you
      are in, the harder you try, the greater the chance of failure. But
      if you have knowledge but lack capital, a small effort can pay big

      Li hopes Hong Kong can recapture that entrepreneurial and hard
      working spirit of the 50's and increase its thirst for
      learning. "Knowledge is not just about textbooks; it includes life
      experience, civilization and culture, and current affairs. Only then
      will we be competitive." Li concludes that knowledge is the capital
      of the new age. In the 50s and 60s, you could succeed by hard work
      alone, but in today's Hong Kong, you need to succeed by seizing

      The Brand-name Entrepreneur who Shuns Brand-names

      Li Ka-shing has always kept a low-profile. Legendary stories abound,
      but they are always half true, half fabricated. In a recent
      interview with Yazhou Zhoukan, Li tells us about his philosophies,
      his personal life, and his experience.

      Q: We hear that you like to read before going to bed at night. What
      did you read last night?
      A: The book I read last night was about the future of IT. This is a
      fast growing industry. I believe that in just 2 to 3 years, movies
      and television programs can be shown on mobile phones. I prefer
      books on technology, economics, history and philosophy, and
      recently, I have taken an interest in network information.

      Q: You don't read novels?
      A: That's right, I don't. Nor do I read entertainment news. That is
      because I have developed the habit of acquiring knowledge whenever
      possible. I did not have the time or the money to study when I was
      young. I went to the barber's only once every few months. In order
      to acquire knowledge, I had to buy used textbooks, which contained
      teachers' notes and answers to questions. I don't read fiction or
      martial arts novels because I don't have time. I like reading
      history books; I received high marks in history when I was in

      Q: How do you arrange your schedule? Do you get tired from work?
      A: I wake up every day just before 6:00am and exercise and play golf
      for an hour and a half. I insist on reading before I go to bed at
      night. I am still energetic during the day. Your energy comes from
      being interested in your work. If you are interested, you won't get
      tired. Meetings are the most tiring. After a person has spoken for
      one minute, you already know the gist of what he wants to say. When
      he talks on for 10 minutes, you will feel tired because it is
      mundane. Sometimes I have to take ginseng tea to keep me alert.

      Q: Do you take afternoon naps?
      A: No, but sometimes if I get tired, I will drink some coffee.

      Q: You like reading books about technology. What do you think should
      be the focus of technology?
      A: Letting people become familiar with technology and its commercial
      applications. I think that if we can shape technology into something
      more practical, more applicable to China's needs, it would be an
      enormous commercial opportunity for Hong Kong. In recent years, our
      company has encouraged our staff to learn new technologies on their
      own, and to consider technology projects that strengthen our
      business efficiency, increase our competitiveness and raise our
      productivity. I read up on new technology everyday.

      Q: Have you ever tried surfing the Internet?
      A: Two years ago I spent over 2 hours surfing the Internet, but
      since then I have not used it much. I use a computer mainly to view
      our company's information.

      Q: Last year you said that you withdrew from a HK$10 billion
      investment because Hong Kong's environment has changed. What's the
      major problem?
      A: I will cite an example of how committed we are to Hong Kong as
      the base for our businesses. In 1989, Hong Kong faced political
      turmoil. Many of our local and overseas partners, even our own
      directors, urged me to take our company registration overseas. But I
      refused. Then one day, after there had been much talk about moving
      overseas, I told everyone during a meeting that if they want to
      move, they first have to remove me as chairman. Of course, no one
      mentioned this topic again. I love Hong Kong, and I think that a
      harmonious environment is most important, otherwise, our economy
      will remain stagnant. At the time, I said that we would withdraw
      from this one single project, but I also said that Hong Kong would
      remain the base for our Group and that we would continue to make
      other investments. Unfortunately, the media did not report my other

      Q: What do you think of the British Administration and Tung's SAR
      A: Many of the policies developed by the British administration were
      designed to lessen instability after the reunification (dollar peg,
      high land prices to boost reserves, etc). These policies helped to
      instill confidence. The present Government is facing a much more
      difficult task with the bubble economy and the Asian financial
      crisis. The Government faces great pressure from within and outside.
      The job of the Chief Executive is a difficult one. The Government
      must set long-term policies while being able to reap short-term
      benefits, which may actually be self-contradictory. This has
      increased the difficulty for the Tung administration, but the
      Government has done its best.

      Q: Are you considering the question of succession?
      A: I have already retired as Managing Director of Cheung Kong, just
      keeping my capacity as Chairman. The duties are now shared by my son
      Victor and a team of young Executive Directors; on major decisions,
      they will consult me. Both Victor and I get along very well with our
      senior executives, and I believe there won't be a problem with

      Q: In this highly competitive, information-intensive and rapidly
      changing Hong Kong society, is the road more difficult for the next
      generation of entrepreneurs?
      A: Businessmen must move with the times. They must remember that
      knowledge and economic development is inseparable. Problems faced by
      the next generation are both easy and hard. But compared with
      decades ago, the correlation between knowledge and business as the
      key to success is closer than ever.

      Q: Westerners say leave your children not gold but gold refining
      methods. What are you leaving to your children?
      A: Chinese people say leave your children fishing methods, not fish.
      Both my sons are highly motivated and they both love Hong Kong.
      Victor is now the head of a public listed company and he gets along
      very well with the staff. He is also a father himself, and he cares
      about our society and our environment. He is always telling me what
      Hong Kong will be like if we don't save the environment. He leads a
      simple life, and his tastes are simpler even than mine. This is the
      path he has chosen.

      Q: Richard is striking out on his own. Are you comfortable with
      A: Richard is in close contact with many of the world's leading
      technology companies and figures. In the past several years, he has
      put a lot of time into developing his high tech business. With his
      performance and experience, he could do well in many countries,
      especially Western countries. Even though he is facing great
      pressure on the Cyberport project, he insists on staying in Hong
      Kong. That is a sign of maturity as well as a demonstration of his
      love for Hong Kong. I have great confidence in both Victor following
      my footsteps and Richard developing high tech business and his
      future career.

      Q: The Cyberport project proposed by Richard recently seems to have
      run into opposition. Will you exert pressure on the Government?
      A: No, absolutely not. I have never used my influence to speak to
      Government officials to help Cyberport.

      Q: Are you a strict father? Have you ever hit your children?
      A: I would only pretend to hit them. I am a strict father. In the
      past, I spent my Sundays with my children. I took them out on the
      yacht and talked to them not about making money but about how to be
      good human beings.

      Q: Do you have any religious beliefs?
      A: I do not have any special religious beliefs, but I have read many
      books about religion, such as Christianity, Buddhism, Confucianism,
      and Tao. Some of the sayings and mottos are brilliant.

      Q: What should a successful entrepreneur be interested in?
      A: Continuously meeting new challenges. The success of my business
      has provided me with resources which allow me to make constructive
      contributions to our society and people. My standard of living
      compared with 30 years ago has not risen. When I was young I thought
      about getting nice things, but now I only ask for convenience. My
      clothing probably cost less than yours.

      How much do your shoes cost?

      Mine only cost $200 something.

      Mine are a little more expensive. They cost around HK$400, but
      they are rubber soled. My watch cost around HK$200. I only ask for
      spiritual satisfaction. I believe that a person's status in life is
      determined by his behavior. If you are at peace with yourself, you
      will have your own paradise, and you can look beyond power and
      humility. Life cannot be measured by a calendar. Some people are
      alive but do not contribute to society; while others die in glory.
      If you have done your best to make meaningful contributions, when it
      is time for you to go, all you will feel is a little tired, just
      like when the sun sets you need to take a rest. The feeling is that
      of enjoyment, and there is no fear in it. I just hope that I lead a
      full life.

      Q: Are Western entrepreneurs better at charity and community
      A: China has had many wealthy businessmen in its history, but
      traditional thinking calls for the business to be passed on from one
      generation to the next. I believe that business should go on and on,
      but a person does not need a lot to have his basic needs provided
      for. If you have more wealth than you need, you should give more to
      the community, especially when you still have the strength and
      energy. That is why I will slowly let go of my business, while
      taking up more and more philanthropic work. I hope that this will
      increase the participants' sense of mission and also get others

      Q: You have a wide range of businesses, but you don't seem to have a
      lot of interest in news media.
      A: I am very interested in media. I am a shareholder of Metro
      Broadcast. But sometimes there is conflict between media and other
      businesses. Telling the truth sometimes offends people. I don't like
      to fabricate news just to make money or to hurt others.

      Q: You said that you get along well with your staff. Have you ever
      fired anyone?
      A: No one at senior level. There was one in the middle ranks. He was
      a well-educated middle manager, but he took advantage of his
      position for personal gains on many occasions. His behavior was not
      in line with his remuneration, so I decided to fire him. If a staff
      is sloppy in his work, I will get very angry and criticize him. But
      if he makes a mistake, you should give him a chance. Once a staff
      broke a very precious Tang Dynasty tri-colored pottery horse in my
      office. I just told him to be more careful next time. The horse is
      shattered; he is blaming himself; why do you need to say more? This
      is not a question of money; it's a personal philosophy. I believe
      that our turnover rate at the senior level is the lowest among
      similar companies. They are always sad to leave when they retire.

      Q: Can you summarize your life experience for all your compatriots?
      A: Chinese living overseas should assimilate into the local
      communities, and if they are successful, they should give something
      back. They should spare no effort in doing things that benefit the
      local communities. I want to build a corporation that not only the
      Chinese are proud of, but that even foreigners are impressed with.
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