In the 25 years since its return, Hong Kong has gradually developed into the world's most important international financial center, and has always served as a window between the mainland and the world.
Cai Guanshen, the head of Xinhua Group, was interviewed by "Hong Kong 01" and talked about the "transformation" of Hong Kong since its return.
He believes that, for many years, Hong Kong has not only played the role of an intermediary (Connector), but also an investor (Investor) and an operator (Operator). The most appropriate description is "CIO".
Cai Guanshen believes that Hong Kong can continue to prosper and develop. There are many opportunities in the Greater Bay Area, and the mainland is still the best place for Hong Kong businessmen to develop.
Before Hong Kong’s return to the motherland, the whole people’s “wearing plastic flowers” focused on manufacturing, and gradually transformed to trade and logistics. It has become an international financial center, and the financial industry dominates the economic lifeline.
The Xinhua Group, founded by "Seafood King" Cai Jiyou, has been rooted in Hong Kong for more than half a century and has seen this change.
The chairman of the group, Cai Guanshen, as the second generation of top masters, not only maintains the seafood industry, but also grasps the unique international status of Hong Kong, and actively expands his business to real estate, finance, infrastructure, new technology, education, media, etc.
He summed up the process of Hong Kong's transformation from an industry-led, "transformation" to an international financial center in one sentence, "From cooperating with mainland manufacturers before, becoming a world factory in the Pearl River Delta, upgrading and transforming into entrepot trade, and then the fastest growing home. It is in the modern service industry, providing professional services, including finance and real estate.”
Xinhua Group has been rooted in Hong Kong for more than half a century and has witnessed Hong Kong's "transformation" from an industrial-led one to an international financial center.
(Photo by Zhang Haowei)
Hong Kong is not just playing "Party C"
Hong Kong's financial industry is booming, and it is also China's window to the world. Many people describe it as a "super middleman", but Cai Guanshen said with a smile that it is not as simple as saying that Hong Kong is a middleman.
"The middleman can refer to Super Connector, but I use a new name all the time, which I invented, called CIO, C for Connector (Contact), I for Investor (investor), O for Operator ( operator)."
Cai Guanshen explained that the intermediary is just one of the roles in Hong Kong, "Hong Kong is definitely not a pure party C, what is it called party C? A party, party B, party C is the intermediary. But we (at the same time) are the tight party A. ──Hong Kong is an investor, such as a large listed company, who will act as an intermediary? Hong Kong (enterprise) is the largest investor in China, and we also invest in London, ASEAN, and the United States!”
In Cai Guanshen's eyes, in addition to middlemen, Hong Kong is also a platform for bringing in funds and then going out.
(file picture)
Hong Kong tops list of world investors
In fact, Hong Kong is rich in capital, and there are countless funds invested in the Mainland and overseas in the past 25 years.
In 2019 alone, Hong Kong invested US$96.3 billion in the mainland, accounting for 69.7% of the mainland's total foreign investment; this proportion has been increasing year by year since 2005.
In Cai Guanshen's eyes, Hong Kong is not only a middleman, but also a platform for bringing in funds and then going out. "Hong Kong is very capital-oriented. Everyone should pay attention to foreign investment in China. In the past 40 years, more than half of the funds are related to capital. Hong Kong’s investment in the Mainland.”
Take the large listed Hong Kong companies mentioned by Cai Guanshen as an example. In addition to developing in the mainland, the four major local developers also invest overseas.
Sun Hung Kai Properties (0016) The Kwok Family Fund and Ballymore, a large British developer, cooperated with the London project Goodluck Hope; the Greenwich Peninsula developed by Knight Dragon under the chairmanship of New World Chairman Cheng Ka-shun, with a total investment of 8.4 billion pounds; Cheung Kong ( 1113)'s Hutchison Whampoa Properties is also developing the Convoys Wharf project near the Thames, with a site area of about 1.7424 million square feet, equivalent to 9 Victoria Parks.
Hong Kong can successfully become a "CIO" because of its sound legal system, low tax system, and free flow of funds.
(Photo by Zhang Haowei)
Don't be too political
In addition to capital "going out", Hong Kong is also actively acting as an operator outside.
He said with a smile, "It's okay to talk about factories. In the past, thousands of factories in Hong Kong were operated by us! When Hong Kong businessmen went to the Pearl River Delta, many of them built front and back factories."
Judging from the fact that Hong Kong's infrastructure is mature now, both the airport and the MTR are operating very well, and they are even capable of being an international operator.
"London's new Queen Elizabeth line is operated by the Hong Kong MTR!" Cai Guanshen said that MTR Elizabeth line (MTREL), a wholly-owned subsidiary of MTR (0066), is responsible for the daily operation of the "Queen Elizabeth Line".
There are 41 stations on the whole line, more than 100 kilometers long.
In addition to being responsible for the day-to-day operations of the entire line, MTREL will also manage the 28 stations along the "Queen Elizabeth Line" on behalf of Transport for London.
Hong Kong can successfully become a "CIO" because of its sound legal system, low tax system, and free flow of funds.
However, in recent years, the Sino-US relations have become increasingly hostile, and Hong Kong, as an intermediary, is inevitably affected. Is it the best policy for Hong Kong companies to explore markets outside the US?
Cai Guanshen, who has led the company to enter the US market many years ago, believes that it is not a big problem for Hong Kong companies to invest in the United States. Well, he (the U.S.) is worried that you will restrict you, but I don’t think it will be a problem if you are engaged in real estate and manufacturing.” He added that Hong Kong is an economic city. Doing business with the US is "too political".
The new Elizabeth line in London, operated by MTR Elizabeth line (MTREL), a wholly-owned subsidiary of MTR (0066).
(AP)
Mainland is still the first choice for Hong Kong companies to go global
As for business development outside Hong Kong, is it better to choose ASEAN?
Cai Guanshen believes that ASEAN has many business opportunities, and the group also has many businesses in Vietnam and Cambodia, which are developing well.
However, he did not shy away from saying that because the group entered the local market early, it developed well.
At the same time, he reminded Hong Kong enterprises that intend to develop there, "ASEAN is not one country, but ten countries, representing ten languages and cultures. When you go to a new place, is it as easy as China?" On the whole, he believes that it is best to choose the mainland for overseas development, because Hong Kong companies have advantages in the mainland under one country, and the culture and language are the same, so it is more favorable for development.
Looking forward to the next 25 years, Cai Guanshen believes that under the one country, two systems framework that has remained unchanged for 50 years, Hong Kong can continue to prosper and develop.
Will the re-emergence of immigration affect Hong Kong's competitiveness?
He believes that if young people see opportunities, they will have no problem developing wherever they go. "It's good to be practical in business, and you can go as far as you can, and you shouldn't dwell on politics all the time." He continued that the characteristic of Hong Kong people is flexibility. Flexibility, if the development in other places is not as expected, you need to decide whether to continue to develop in that place. Talent will naturally come back!”
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