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