Article originally in the Financial Times.
If someone is able to look at Donald Trump in a long-term context, it is Li Ka-Shing, a 96-year-old billionaire from Hong Kong, who fled as a child for the Chinese-Japanese war to subsequently virtually build a global empire.
The US President has criticized that “China will run the Panaman Canal,” pointing out the two ports he controls CK Hutchinson. Similar concerns have been resonating since 1997, when the company received these contracts for operation. Panama lawyers sued it in the courts in an effort to cancel these treaties, while the Panama government continues to audit the company.
The richest man of Hong Kong under pressure
The richest man of Hong Kong, nicknamed “Superman”, has built his conglomerate, which includes ports, retail, infrastructure and telecommunications companies thanks to investments in the West. Although he has faced criticism for his contacts with China, whether in Australia or the United Kingdom, the latest onslaught comes at a difficult time.
The company is under pressure to increase the value of its shares, which have fallen by more than 40 percent over the past five years, lagging behind the key Hong Kong index Hang Seng. If you wanted to ensure larger acquisitions, such as the British company Thames Water, she would have to draw into its enormous financial reserves, exceeding $ 130 billion (€ 16.1 billion).
CK infrastructure, a division of which belongs to the infrastructure part of the company’s business, announced in February a bid of seven billion British pounds (€ 8.5 billion) for the majority share in Thames Water, competing for a four billion offer (€ 4.9 billion) from the US investment company KKR.
Analysts expect society to face resistance for its links to China. “We cannot rule out that the geopolitical questionnaires will limit CK plans for expansion,” said Lorraine Tan, director of the Asian stock market research in Morningstar.
Between China and the West
Li ka-shinging as a 12-year-old fled to Hong Kong, who were then managed by the British. He started his business in plastic production and subsequently expanded into real estate and telecommunications companies. In 2023, his company reported a profit of $ 3 billion (€ 2.9 billion) and is one of the largest conglomerates in Hong Kong.
Like many local magnates of this generation, Li Ka-Shing has led his company differently than customary for companies from mainland China, where the rules for business are stricter controlled by the government.
However, since Hong Kong took over the administration of China in 1997, local companies have been looking at more than Chinese, especially after the production protests in 2019, after which extensive security legislation was adopted next year. In 2020, Trump’s government took away Hong Kong with special business privileges and declared that the United States no longer perceived the city as independent of China.
“Hong Kong used to benefit with his position between two worlds,” the person said in a close relationship with the local conglomerates, including CK Hutchinson. “Now companies are in the match between China and West.” Some magnates, especially those who have significant investments in mainland China, have come close to Beijing, while Li Ka-Shing and CK Hutchinson have a more complicated relationship with him.
Key investments have in Britain
He supported the new security legislation as well as the nomination of John Lee, who enjoyed the support of Beijing, to the post of Hong Kong leader. He also repeatedly supported Jin-Pching as the Chinese President and met him several times. However, after he sold several real estate in China, he earned a criticism of state media, which, among other things, wrote an article with the headline “Let’s not let Ka-Shinge run away”.
His son Victor, who supervises the daily operation of the company, was ejected in 2023 from the permanent committee of the Chinese Folk Political Advisory Assembly, which is the top political advisory body in the country. “Li ka-shinging and his family must be covered by Beijing and look like a patriotic foundation of citizens and society,” said Jean-Pierre Cabestan, senior researcher in the Paris Think-Tank Asia Center.
“Many governments, especially the American, think that every Hong Kong company is an agent of the Chinese Communist Party, which is obviously not true,” Cabestan added. Li Ka-Shing’s investments in the West continue to be crucial for his company.
CK Hutchinson reached half of its UK sales in 2023, Europe and Canada, but less than a fifth comes from mainland China and Hong Kong. The infrastructure division bought 32 wind farms there last year and entered the London Stock Exchange in the form of secondary shares of shares.
The conglomerate and its divisions are also operated by Eversholt Rail and Telecommunications Firmuthree UK, as well as the network of health and cosmetic goods Superdrug, as well as one of the largest container ports in Britain, FelixStowe. The CK Asset real estate division operates one of the largest British Greene King bars.
We can’t change until we are
Some observers and politicians expect the efforts to acquire Thames Water encounters resistance.
The Labor Government should ask itself whether “it wants to allow a foreign company, from a country whose legislation requires that it act as commanded to operate strategic infrastructure,” said former Ian Duncan Smith. “In my opinion, she should not allow it.”
CK Hutchinson, according to Tana from Morranigstara, focuses on taking advantage of its wealth on new investments. “In the future, they would like to return to more significant successful acquisitions.”
Even at the age of 96, Li Ka-shinging remains in good health and regularly visits his office on the 70th floor of his company. She did not respond to the request for response.
A higher-built Li Ka-Shing person in the past for the Financial Times said there is no “nothing” that the company could do to change the impression that it is increasingly Chinese. But this should “not restrict our work”, said this source. “We can’t change it while we are.”
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