Asia’s richest man, Li Ka-shing (李嘉誠), warned that Shanghai’s new free-trade zone will have a “big impact” on Hong Kong, urging the territory to up its game to avoid losing out, his office said yesterday.
China will allow unfettered exchange of its yuan currency in its first free-trade zone, according to draft plans revealed exclusively by Agence France-Presse earlier this month, in a bold push to reform the world’s second largest economy.
The proposals showed the new Shanghai zone as an international trade and financial center, which analysts say would challenge the free economy of Hong Kong.
The free-trade zone “will have a big impact on Hong Kong,” Li said, in a summary of remarks issued by his office yesterday.
“The free convertibility of the yuan will be favorable in the development of Shanghai,” he said.
“If Hong Kong does not catch up, it will lag behind others,” Li said, adding that Hong Kong’s GDP is already lower than that of Singapore.
When asked if Shanghai could catch up with Hong Kong within five to 10 years, he said: “I do not want to predict. But it will be faster than most people expect.”
Li, 85, also warned that the pro-democracy movement Occupy Central could harm the economy.
“It will have a negative impact on the economy and will affect Hong Kong’s image as an international finance center,” he said.
After starting out in business as a maker of plastic flowers, Li now commands a vast empire through Cheung Kong Holdings Ltd (長江實業) and Hutchison Whampoa Ltd (和記黃埔), with global assets in property, telecoms, utilities, ports and retail. He has a net worth of about US$31 billion, according to Forbes magazine.
Reports that he is selling his Hong Kong-based supermarket chain ParknShop have triggered fears he was going to pull his businesses out of the territory. However, he has pledged not to leave Hong Kong.
“I love Hong Kong, I love the country. Cheung Kong and Hutchison Whampoa won’t be moved away from Hong Kong,” he said.
Li initially made the comments at a press lunch on Tuesday.
The draft free-trade zone plan for Shanghai showed the new zone would support the establishment of foreign and joint venture banks and welcome privately funded financial institutions.
At present, China’s banking sector is overwhelmingly dominated by state-run institutions.