Ted Cruz and Hong Kong’s Democrats


Sen. Ted Cruz, R-Texas in November.



Photo:

bill clark/pool/Shutterstock

Rafael Cruz,

the father of

Texas Sen. Ted Cruz,

came to the U.S. from Cuba in 1957 on a four-year student visa. He had sided with

Fidel Castro

against the Batista dictatorship, for which he was jailed and beaten. But he later soured on Castro and was granted political asylum in the U.S.

Like so many people who have escaped political oppression, Mr. Cruz has a special appreciation for America and its freedoms. So why did his son recently block legislation on the Senate floor to open America’s door to people like his father—Hong Kongers now enduring a crackdown by another Communist government?

The legislation is “The Hong Kong People’s Freedom and Choice Act of 2020,” and it passed the House in early December by voice vote. The bill would make it easier for Hong Kongers to gain refugee or temporary protected status. TPS allows people from designated countries to remain and work in the United Status.

Mr. Cruz, who has supported Hong Kong’s democracy movement in the past, offers two main objections. First, he says the bill isn’t really about helping Hong Kong; it’s another Democratic effort to relax standards on behalf of “open borders.” Second, he says it would give China an opening to infiltrate spies into the U.S.

He prefers his own bill to cut off federal funding for Hollywood filmmakers who censor their films for screening in China. He is also pushing the Shame Act, which would sanction China for forced sterilizations and abortions directed at religious minorities such as the Muslim Uighurs.

We’re all for ending government subsidies to Hollywood, and we’ve condemned forced abortions for more than three decades. But neither issue contradicts support for Hong Kong’s persecuted democrats. And nothing challenges—and embarrasses—a Communist regime more than when its own people want to flee to freedom. In Berlin the Communists had to build a wall to keep people in.

China probably would try to use an opening for Hong Kongers to sneak its agents in. But that was also true of Cuba’s escapees. And if the issue is spies, who are more likely to be agents for Beijing: Hong Kongers who risked arrest by protesting for democracy, often carrying American flags—or the children of Chinese Communist Party members who attend American universities?

The Hong Kongers who would take advantage of a legal path to the U.S. are decent, hard-working people like Rafael Cruz. The Republican Party spoke up for Soviet refuseniks and dissidents during the Cold War. But now some want a new Cold War with China while shunning its victims.

At a moment when many

Biden

appointees want to reset relations with China, conservative Republicans shouldn’t be working against an effort that would keep the heat on Beijing while giving Hong Kong people hope.

Main Street: Hong Kong’s Jimmy Lai goes to jail—and Pope Francis says nothing. Images: Reuters/Zuma Press Composite: Mark Kelly

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8



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The American pirate who kicked off one of Hong Kong’s earliest major political scandals


Boggs accused a top colonial official, Daniel Caldwell, and another notorious pirate, Ma Chow Wong, of working together in secret to protect each others’ interests. Boggs claimed that Wong derived his power from Caldwell’s protection racket, and Caldwell profited handsomely financially — and professionally — in return. Caldwell reportedly turned over other pirates to law enforcement so he could rise in the colony’s professional ranks.

George Wingrove Cooke, The Times’ Special Correspondent in China, who covered the trial, dismissed Boggs’ allegations out of hand in his reporting.

But Hong Kong Attorney General T. Chisholm Anstey toook them more seriously, as he was tasked by the governor with investigating corruption upon his arrival in 1856.

That probe became one of Hong Kong’s earliest major corruption scandals involving official wrongdoing. Countless followed — the colony was notoriously rife with corruption until the 1970s, when the government formed its Independent Commission Against Corruption (ICAC), an agency credited with reviving Hong Kong’s reputation for preventing corruption and government malfeasance.

While the Caldwell affair and Boggs’ role in it forced the colonial government to acknowledge the scourge of piracy, piracy itself was not new.

Pirates, by that point, had already been sailing throughout southeast China for hundreds of years.

Ransom and opium

The arrival of the British merchants in East Asia made piracy a particularly lucrative industry because of just how much opium was being sold to mainland China. Things came to a head in the 19th century.

China at the time was ruled by the Qing dynasty, whose leaders were deeply mistrustful of foreigners and overseas commerce. The empire restricted most foreign trade to Canton, and even evacuated villages from along the coast to stop influential, anti-Qing elements based in Taiwan from fomenting dissent.

But as foreign merchants flocked to Canton in the 17th century and shipping routes to the rest of Asia passed through the South China Sea, just south of the city, the opportunity for piracy grew.

While many pirates simply raided opium clippers and sold their contraband, ransom was also big business — it was even more profitable than robbery, according to some experts. Friends, family and business associates of victims often paid up quickly because the pirates roaming the South China Seas had a reputation for cruelty and grisly violence. According to a history of pirates published by a British captain named A.G. Course in 1966, Boggs allegedly of cut up the body of one wealthy prisoner to insure that colleagues or loved ones paid to free the rest of the people he held captive paid up. However, Boggs was never convicted for that crime.

British sailor John Turner also wrote about these brutal tactics after being held hostage on board a pirate ship in 1806. Taylor, the chief mate of a British ship called the Tay, was kidnapped in December that year, while sailing near Hong Kong and Macao and then held for ransom.

Turner later described how new victims were captured on a daily basis, but the treatment of one brought aboard in January “made an indelible impression” on him.

He watched horror as the pirates nailed a fellow captive’s feet to the ship’s deck while the prisoner was still alive. After plunging the two large nails through the other prisoner’s feet, the pirates beat the man with whips until he began vomiting blood. The victim was left on deck for a short time after,

The captive was then taken ashore, but whether he was alive or dead at the time, Taylor didn’t say. It wouldn’t matter. When the pirates reached dry land, the man was “cut to pieces.”

Taylor would go on to spend about five-and-a-half months in the captivity before his ransom was paid and his freedom was secured. Many more sailors would live through similar ordeals.

‘That handsome boy’

Boggs was hardly the most infamous of the pirates sailing in Chinese waters during the 19th century.

Cheng I Sao left her career as a prostitute to marry a pirate in 1801 and, a few years later, was reportedly commanding a fleet of 70,000 pirates aboard 1,200 vessels. Shap Ng Tsai, who supposedly led 3,000 men and 60 ships, and Chui A Poo were the most notorious pirates sailing around Hong Kong around the time of the Opium War.

But Boggs captured the public’s imagination because he was a young American with boyish good looks accused of grisly violence — including single-handedly killing 15 men on board one ship, while forcing the rest overboard, according to Cooke, the Times journalist.

“It seemed impossible that that handsome boy could be the pirate whose name had been for three years connected with the boldest and bloodiest acts of piracy,” Cooke wrote. “It was a face of feminine beauty. Not a down upon the upper lip; large lustrous eyes; a mouth the smile of which might woo (a) coy maiden; affluent black hair, not carelessly parted; hands so small and so delicately white that they would create a sensation in Belgravia.”

It is unclear is how — or why — Boggs ended up in China.

But by the early 19th century, what is clear is that the British wanted him locked up, and were offering a 1,200-dollar reward to do so. Yet who captured Boggs is still in dispute.

Captain Course’s history says another American named William Henry “Bully” Hayes, an opium smuggler, was responsible for capturing Boggs near Shanghai — and fetching the reward. Transcripts from Boggs’ trial published in local Hong Kong papers, however, quote the sworn testimony of Police Constable Charles Barker, who said he arrested Boggs at a bar on Bonham Strand in June 1857, in what is now Sheung Wan, one of Hong Kong’s hip neighborhoods popular with expatriates.

Either way, in 1857,then reportedly in his mid-20s, he faced trial for piracy and murder.

One witness said he saw Boggs take part in a pirate raid on an opium boat in which 24 men were killed, according to the trial notes. The American was convicted of piracy but acquitted of murder because no one could prove Boggs fired a fatal shot, despite multiple witnesses seeing Boggs firing at a man clinging to a rope tied to a boat.

Cooke, the reporter from the Times, alleged that jury was also “moved by his (Boggs’) youth and courage.”

Cooke’s dispatch from the trial was picked up and published by periodicals across the United States. While audiences across the world were no doubt drawn to the story’s dashing and dangerous main character, Cooke said he covered it because “this subject of piracy is of great importance.”

“Where I now write there are 200 junks (Chinese ships) lying in the harbor before me, and every one of them is armed with two heavy guns — some have 12,” Cooke wrote. “Probably one quarter of these are pirates, who live principally by piracy, and adopt the coasting trade only as a cover to their real profession.”

Caldwell’s downfall

Cooke didn’t take Boggs’ accusations of a government conspiracy seriously. He said Boggs’ defense was “false” and claimed the killing of the 15 men had been proven.

Anstey, the attorney general, disagreed.

“It was a most scandalous scene,” Anstey wrote to the Duke of Newcastle, the Secretary of State for the Colonies, in 1859, “especially because the demeanor of Mr. Caldwell under the infliction was clearly that of a guilty man.”

Thomas Chisolm Anstey.

Caldwell at the time was Registrar General and protector of the Chinese in Hong Kong, a position that gave him ample opportunity to work with, and perhaps even exploit, the local population. Those positions meant Caldwell advised the governor on domestic affairs and affairs relating to the local Chinese population.

Anstey believed Boggs’ claims were “too circumstantial to be entirely false” and thought it was his “duty to represent the scandal which had occurred in court.”

What followed was a three-year-long tit-for-tat, with Anstey and Caldwell accusing the other of wrongdoing. Caldwell called Anstey a vindictive monomaniac targeting him under the guise of stamping out corruption.

Anstey accused much of the Hong Kong colonial government of covering up for Caldwell, and in his letter to the Duke — which Antsey self-published in a pamphlet for the public to read — argued that the commission tasked with investing Caldwell was staffed with his supporters and that the report they filed failed to address the totality of Caldwell’s wrongdoing.

Prejudice was almost certainly a factor. Caldwell had spent a lot of time in Asia and was one of the few British men in Hong Kong at the time to marry a local woman. Anstey called her a “harlot” and Caldwell a “pirate” during a Legislative Council meeting.

By the end of it all, both men were out of jobs. Colonial Gov. Sir John Bowring quickly tired Anstey’s constant quarreling, short temper and impetuous nature, according to a dispatch he filed in 1858. Bowring suspended Anstey from his post in 1858. A year later, Anstey left Hong Kong for Bombay.
Sir John Bowring.
Bowring’s successor, Hercules Robinson, revived the commission on instructions from the Duke of Newcastle. It found Caldwell unfit for public service in 1861.

Though his revelations were still upending in Hong Kong politics, Boggs was long gone by that point.

He had been released from prison about a year earlier on April 12, 1860, and deported to the US because he was sick “and it was not expected he would have lived much longer if kept in prison,” according to the colony’s legal records. Albert Smith, a traveler to Hong Kong, wrote that he saw Boggs in prison about a year after his convictions, where the American “complained terribly of his confinement, and said his chest was affected.”

Boggs slowly faded into history after his return to the US, while Anstey died in Bombay in 1873.

Caldwell died two years later. He was buried in a cemetery in Hong Kong’s Happy Valley, where is grave is today.



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Sun Hung Kai Properties, Chinachem Group may bid in rare ‘two-envelope’ tender for prime commercial plot next to Hong Kong’s IFC




Hong Kong’s biggest developer by value, Sun Hung Kai Properties, and Chinachem Group said they may bid for a prime plot of commercial land to be sold via a rare tender process that takes into account participants’ design plans as well as cash bids.The government is using a “two-envelope” approach for the sale of New Central Harbourfront Site 3, meaning the winner will be determined by assessing both price and design proposal. This deviates from the practice of awarding sites based on the…



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Hong Kong’s Freedom Fighters – WSJ


Jimmy Lai pauses during an interview in Hong Kong, July 1.



Photo:

Vincent Yu/Associated Press

China continues to arrest and punish Hong Kong’s brave freedom fighters, and it’s important that the world not forget them. The Trump Administration is speaking up, and let’s hope the

Biden

crowd does too.

Hong Kong police said Friday that

Jimmy Lai,

the pro-democracy publisher who has written for these pages, has been charged under a new national security law. Police said Mr. Lai had colluded with foreign forces without providing any details. His real offense is that he has criticized the Beijing government and endorsed foreign sanctions for its assault on the autonomy China promised Hong Kong in its treaty with the U.K.

Any dissent now is a crime in the city. The national security law allows a defendant to be tried in secret or transported to Chinese courts and jail. The political pressure from Beijing will be enormous on Hong Kong’s courts, which are supposed to be independent, to convict Mr. Lai. A bail hearing was scheduled for Saturday for Mr. Lai, who is 72 years old.

Meanwhile, the Journal reports that Hong Kong democratic activist

Sixtus Leung

is seeking asylum in the U.S. Mr. Leung, who is 34, was elected to the city’s legislature in 2016 but was disqualified after a ruling from Beijing. He has advocated self-determination for Hong Kong, which would also put him on Beijing’s target list for violating the national security law.

Bloomberg News reports that Chinese security officials have also detained

Haze Fan,

a Chinese staffer in Beijing, without explanation. Most foreign publications operating in China employ expatriates and Chinese nationals. Chinese citizens are especially vulnerable, and the arrest could be intended to intimidate other Chinese to stop working for Western publications.

This is all part of the Communist Party’s ferocious effort to stop all criticism—at home and abroad. China monitors citizens who study or work overseas, and it has set up influence campaigns through its Confucius Institutes at college campuses. The Trump Administration has called out these tactics and in recent days the State Department has ended China-sponsored junkets by U.S. officials that are no more than propaganda campaigns.

This is welcome, and China will be lobbying the Biden team to drop all of this in return for a climate deal. In a positive sign this week,

Jake Sullivan,

who will be national security adviser, tweeted his concern about the Hong Kong arrests and said he’s ready “to help those persecuted find safe haven.” Good show, and we suggest the U.S. issue them all visas and green cards.

Main Street: Hong Kong’s Jimmy Lai goes to jail—and Pope Francis says nothing. Images: Reuters/Zuma Press Composite: Mark Kelly

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the December 12, 2020, print edition.



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China shadows the rise of Hong Kong’s next tycoons


HONG KONG — Adrian Cheng Chi-kong doesn’t like to waste time. The heir to a family fortune of $20.7 billion, he detests both formality and unproductiveness, according to his staff.

When the 41-year-old, third-generation tycoon arrived at Cobo House — an upscale fusion restaurant known for its panoramic sea view overlooking the Victoria Harbor skyline — he showed up in his modish Yeezy sports shoes. His first question: what’s the circulation of your magazine? For the photo shoot, he allotted just 10 minutes, taking place in the adjacent art and cultural center that showcases his art collection.

This has been a big year for Cheng. He has taken over the reins from his father, Henry Cheng Kar-shun, to become CEO of New World Development, as the Hong Kong property giant marks its 50th anniversary. The Cheng family also controls Chow Tai Fook Jewellery Group, the world’s second-largest jewelry retailer by market value.

The Chengs are one of Hong Kong’s premier old-money families. They have thrived in both the colonial and post-handover era, prospering under different environments and regimes by treading carefully between business and politics.

Today, the territory’s tycoons face another once-in-a-generation dilemma as they pass on the leadership to their heirs: whether to further invest in Asia’s financial hub in spite of the uncertainty generated by a newly assertive China, or to rethink their commitment to their home market.


Cheng has taken over the reins from his father, Henry Cheng, to become chief executive officer of New World Development this year as the Hong Kong property giant marks its 50th anniversary. (Photo by Paul Yeung)

Cheng has been doubling down on investments in the territory, committing over $50 billion Hong Kong dollars ($6.5 billion) on local projects that are set to complete over the next five years. They include a world-class sports park in the city’s new urban development zone, and SkyCity, a colossal retail and entertainment complex connecting to the airport.

“New World, for the past 50 years, has been very rooted in Hong Kong,” said Cheng. “Hong Kong is always going to be our base, our origin.” He described the company’s continuous investment in the city and mainland China, where New World plans to expand its K11 brand of shopping malls, with a total of 38 projects opened across the mainland by 2024.

Cheng has also deepened his contacts with the Chinese government. He currently serves as vice-chairman of the All-China Youth Federation, and as a member of the Chinese People’s Political Consultative Conference, on the Tianjin Municipal Committee.

But as Cheng and his peers maintain their relationships with China in the wake of sweeping security laws promulgated by Beijing last May, they in danger of falling out of step with Hong Kong, where politics is moving one way, and society is moving another. The new generation of tycoons must find ways to appeal to Hong Kong’s youth, who are increasingly alienated from big politics and sympathetic to the pro-democracy movement. Straddling this new divide has become, for this third-generation, an increasingly precarious balancing act.

“The world is not operating as it was ten years ago. … The families here have to hedge their bets and diversify in some ways,” said Kevin Au, director of the Centre for Family Business at the Chinese University of Hong Kong. Au noted that while Hong Kong tycoons have to make sure that they don’t miss out on opportunities from China’s economic growth, they have to maintain an image that they are not closely associated with China as the countries’ geopolitical tensions with the U.S. and other Western countries escalate.

“It is going to be a dilemma for these old Hong Kong families,” Au said. “They have to please both worlds, and they can’t put all their eggs in one basket.”

This need to balance both Beijing and appeal to Hong Kong’s new generation is particularly apparent to Adrian, who has worked to transform the 50-year-old company into a millennial-focused brand. And there is only one way to accomplish this: Avoid talking about politics at all costs.

“My corporate philosophy is to create shared value. You know, connecting businesses with social programs,” was the closest he came to this subject in a 40-minute long interview.

2020 was the year that faith in Hong Kong’s future was sorely tested, as Beijing tightened its grip over the former British colony. In May, in response to pro-democracy demonstrations that started last year, Beijing announced a sweeping national security law which all but obliterated the “one country, two systems” formula for the country’s governance agreed at the handover to China in 1997.

The all-encompassing law provides criminal penalties of up to life imprisonment for activities that authorities deem as national security threats. The day following the unanticipated announcement, Hong Kong stocks fell over 5% in their steepest single-day drop in five years.

The real estate sector, whose assets are heavily concentrated in the territory, led the fall. At one point this year, shares of New World Development dropped as much as 30% since January before recovering. The company’s future is very much pegged to the fate of Hong Kong, where New World generated about two-thirds of its HK$59 billion ($7.6 billion) 2020 revenue.

For decades, Hong Kong has been the conduit for capital to flow between China and the rest of the world. But as the firewall between the two places gradually disappears, and as the U.S. revokes trade and investment privileges for the city in light of the new law, investors are beginning to cast doubt on Hong Kong’s strategic position as a window to tap the China market.

Meanwhile, clouds of tear gas, riot police, and traffic disruptions have also prompted many businesses to make exit plans.

For the first time in 11 years, Hong Kong has seen a reduction in the number of foreign businesses, dropping slightly from 9,040 to 9,025, according to the latest Hong Kong government survey.

But optimism seems to be slowly returning, at least to the real estate sector. The Pavilia Farm, New World’s latest large-scale real estate project, has logged the highest number of subscriptions since the city returned to Chinese rule in 1997, helping the company to exceed its sales target for the year.

Located in Hong Kong’s suburbs, The Pavilia Farm is infused with Nordic and Japanese design elements. The modern, high-rise housing complex has a luminous, airy vibe, sleek wood furnishings and eco-friendly smart home devices tailored to millennials and young families — provided they can afford the hefty price tag of HK$7.9 million to HK$25 million.

“It is going to be a dilemma for these old Hong Kong families. They have to please both worlds, and they can’t put all their eggs in one basket”

Kevin Au, director of the Centre for Family Business at the Chinese University of Hong Kong


New World Development launches the sale of THE PAVILIA FARM I and attracts 22,700 registrations in the first round alone, making it HK’s most in-demand residential property, with the highest number of registrations since 1997. (Photo courtesy of New World Development)

It is also, as the name suggests, a farm. Part of the supposed appeal is the residents can grow crops in the communal space. “The first farm-life-infused sustainable residential project in Hong Kong,” Cheng says in a promotional video on the Pavilia Farm website, suffused with images of wicker furniture, a wheat field stretching over the horizon, and some freshly dug potatoes.

Despite the worst recession on record, due to the COVID-19 pandemic and the aftermath of the security law, the project’s record-breaking sales reflected citizens’ general confidence over Hong Kong’s future, said Cheng, noting that half of the Pavilia Farm’s buyers are under 40 years old.

“Life goes on. … Hong Kong is a very resilient market. There’s a lot of demand for premium, high-end residential housing, especially from young people looking to upgrade their lifestyles,” said Cheng, who attended Harvard University and has worked for both Goldman Sachs and UBS. “We have challenging times, but business will bounce back eventually. I have strong faith in that.”

The big four

To the Chengs, one of Hong Kong’s “big four” families — the other three include the Lee brothers of Henderson Land Development, the Kwoks of Sun Hung Kai Properties, and Li Ka-shing’s CK group — it might be too late to plot a move away from Hong Kong.

In recent years, Chinese state media, often the mouthpiece of the Communist Party, has repeatedly lashed out at Li Ka-shing, who is regularly rated as Hong Kong’s richest man. They accuse him of offloading assets worth billions on the mainland to invest in Europe, where Li’s CK Hutchison holding company generated close to half of its annual revenue in 2019, versus just 18% from Hong Kong and mainland China — leaving the Li dynasty the only major family in the city that does not rely on the local market.

Even though the CK group — a conglomerate spanning infrastructure, port, retail, and telecom businesses — began to diversify internationally 30 years ago, Li has ramped up overseas mergers and acquisitions since 2015 in the wake of the Umbrella Movement that called for universal suffrage in the city. That year, Li registered CK Hutchison and CK Asset Holdings, the two new companies created in a groupwide restructuring, in the Cayman Islands, instead of Hong Kong. The group has planned or completed asset sales totaling over $5 billion from China and Hong Kong since 2015, while only acquired less than $1 billion worth of assets in the region during the same period.

“Li Ka-shing has a long-term plan to divest from Hong Kong and China,” said Joseph P.H. Fan, a professor specializing in family businesses at the Chinese University of Hong Kong.

As Li has reduced his local exposure and subsequently passed on the business empire to his elder son Victor Li Tzar-kuoi in 2018, his political stance is still under scrutiny from Beijing. Li was heavily criticized in the Chinese media during the early days of last year’s citywide pro-democracy protests when he declined to openly criticize the protesters. It was only when Beijing proposed the national security law earlier this year that Li eventually broke his political silence and openly defended the legislation.

“It is within each and every nation’s sovereign right to address its national security concerns. … We probably need not overinterpret it,” said the 92-year-old Li, following his son Victor’s open support for the law.

For other Hong Kong tycoons who are almost completely dependent on the Hong Kong and China market, the room for dissent is even smaller, if not nonexistent. Billionaires based in the city, including the Chengs, have published one statement after another on local newspapers to voice their support of contentious government policies, including crackdowns on pro-democracy protesters and the new national security law.

Even so, China’s Communist Party, which believes Hong Kong’s unaffordable housing is fueling social inequality, deems the city’s property tycoons as the culprit of protests. Chinese state media have repeatedly called on the Hong Kong government to seize idle land from property developers to build public housing.


In the early days of last year’s citywide pro-democracy protests, Li adopted an obscure stance towards the movement by not openly criticizing the protesters, making him once again the target of state media.

  © Reuters

While Cheng denied that his business created social inequality, he said New World is committed to corporate social responsibility. Shortly after the criticism from China, New World pledged 3 million square feet, or almost 20% of its farmland, for affordable housing for low-income families. “Because Hong Kong needs it … and I think that’s important. It’s a proper thing to do, so why not? Why can’t we share our land with society?”

The Cheng family have made baby steps over the years to diversify out of Hong Kong, but have been unlucky with their choice of business partners. A first attempt failed spectacularly when the group sought a real estate partnership with none other than Donald Trump. The Manhattan development turned sour after the Hong Kong investors, including Henry Cheng, sold the project before reaching a price agreement with Trump in 2005. Trump later filed a lawsuit against Cheng and another investor for not driving a hard enough bargain.

Since this debacle, New World’s acquisitions have spanned a Bahamas resort, an Irish plane leasing company, and an Australian energy group. It also ventured into the international hotel business in Vietnam and the Philippines, as well as property development in Singapore. Still, overseas businesses contributed less than 1% of the company’s revenue for 2020.

Other “big four” families have stayed largely in Hong Kong as well. The Kwoks, which control Sun Hung Kai Properties, have co-invested in a shopping mall in Singapore — the company’s only overseas project. The Lee brothers, of Henderson Land Development, meanwhile, do not have any overseas investments at all.

“We need to look at it slowly because you don’t want to diversify too much. … Mainly we are very, very Asia-focused, and especially Greater China-focused,” said Cheng. “Other people may want to go to another country, another place to put their resources. But for me, I want to localize my management team, I want to make my management more consolidated,” he said. “I want everything to be leaner, more focused, more aligned. So that’s my strategy. Other people, they have their own strategies.”

Experts said local tycoons’ business success in their home market has deterred them from venturing into foreign countries. “For decades, local developers have made big profits in the sure-win property market in Hong Kong and big Chinese cities. … They didn’t see a need for change,” said said Fan at CUHK. He added that it will be difficult for local developers to suddenly expand into overseas markets, given their lack of connections and experience in those countries.

Even Li Ka-shing, a veteran in international expansion, has found it increasingly challenging to conduct overseas mergers and acquisitions as countries around the globe tighten regulations over foreign deals. In 2018, Li’s CK group was blocked from acquiring Australian gas pipeline operator APA Group over national security concerns. In May, his group lost a bid in Israel to build a water desalination plant after the U.S. Secretary of State Mike Pompeo warned about CK’s participation in the tender. “We do not want the Chinese Communist Party to have access to Israeli infrastructure,” said Pompeo in a TV interview.

CK Hutchison declined to comment on the deal.

Hong Kong tycoons must walk a fine line to avoid being perceived by Western regulators as being closely connected to the Chinese government. But they are still in an advantageous position compared to their mainland counterparts. “After all, they are not Huawei Technologies,” Fan said, referring to the Chinese telecoms infrastructure company which has been targeted for U.S. sanctions.


Over the past decade, New World has aggressively invested in property development projects in both Hong Kong and mainland China. Last August, during the peak of raging street protests, Cheng debuted his signature work, the K11 Musea shopping mall located at the Kowloon peninsula waterfront– part of a HK$20 billion project to convert the promenade into an art and design district.

  © Getty Images

Local and global businesses fear Beijing’s autocratic control will shatter the foundations of Hong Kong’s success, underpinned by its long-established civil liberties and rule of law.

A survey by the American Chamber of Commerce found that nearly four in 10 members of the influential American business group are considering relocating from Hong Kong due to the new national security law. “We don’t trust authorities here to honor the integrity of the banking and financial system,” one member noted, adding that he has moved capital away from the city. In a separate survey conducted by the Japan External Trade Organization, more than one-third of Japanese companies are contemplating restructuring operations in Hong Kong or leaving the territory entirely because of the new law.

Ultrahigh-net-worth individuals in Hong Kong have already begun to park their assets elsewhere, with Singapore being a popular destination. Private asset management firm JJ Richman told Nikkei Asia that since November last year, it has seen three family offices it worked with diversifying their operations and moving to Singapore from Hong Kong.

Singapore-based wealth management outfit Envysion also told Nikkei that out of its pool of clients, two to three family offices based in mainland China that have assets in Hong Kong, are in the process of branching into Singapore. “Singapore, I think, serves as a very good … more neutral location,” said Veron Shim, Envysion’s founder and chief executive.

Clients “have an intention of setting up family offices here, not just because they want to park their assets, but eventually, they are planning to move their family over to Singapore — a lot of them are talking about immigration,” Shim added.

However, New World insists it is not making any side bets. “Actually, we’re much more insulated because we are focusing on China and Hong Kong. We’re not doing exports with the U.S., we do not do anything with the world. So in terms of the risk of exposure, that will be less,” Cheng said.

Over the past decade, it has aggressively invested in property development projects in both Hong Kong and mainland China. During the height of raging street protests last August, Cheng, undeterred, debuted his signature work: the K11 Musea shopping mall located at the Kowloon Peninsula waterfront, part of a HK$20 billion project to convert the promenade into an art and design district. Although the luxury mall has been forced to close on some days, it has been spared from the violence of the protests; some protesters have vandalized pro-China businesses while others call for boycotts.

“In the next 10 to 20 years, what we want to do is to continue to invest in Hong Kong, but at the same time … expand to the Greater Bay Area and become a bigger Greater Bay Area company,” Cheng added, referring to Beijing initiative to integrate 11 metropolises and cities in southern China to form an economic powerhouse. More than 50% of New World’s China land bank is now located in the Greater Bay Area.

Living legacy

With his commitment to Hong Kong and friendly attitude toward China, meanwhile, Cheng is simply following in the footsteps of a family tradition that started under his grandfather — Cheng Yu-tung. When the elder Cheng died in 2016, aged 91, his funeral was a mass event in Hong Kong. Pallbearers included leaders of Hong Kong and Macao, Beijing’s permanent representative to Hong Kong, along with tycoons Li Ka-shing and Lee Shau-kee.

It marked the passing of an old era. But the new one, under Mr. Cheng, will hew closely to the course set by his grandfather. According to Patrick Mok Kin-wai and Wong Wai-ling, who recently published a biography of Cheng Yu-tung, the patriarch of the family always believed in connecting the fate of Hong Kong with mainland China

“He had a vision that if China can continue its development, it would give benefits and advantages to the whole Chinese people [and] be good for China,” Wong told Nikkei Asia in an interview. “If China is good, [then] Hong Kong will be good.”

Some of the elder Cheng’s earliest investments bear out this logic. New World was the very first among the “big four” Hong Kong tycoons to make forays into mainland China. Its investment in China Hotel in Guangzhou in 1980 was the very first joint venture hotel in the country after Deng Xiaoping steered the direction to reform and opening up from isolation and self-sufficiency.


“In the next 10 to 20 years, what we want to do is to continue to invest in Hong Kong, but at the same time… expand to the Greater Bay Area and become a bigger Greater Bay Area company,” Cheng added. (Photo by Kei Higuchi)

After the Tiananmen Square massacre of June 4 1989, “when everybody fled from China, he took the opposite way and expanded his investment in China instead,” said Wong. “Even though he could fly away from Hong Kong with his wealth, he didn’t.”

New World in 1989 signed a preliminary agreement for the first phase of a power plant construction in the neighboring mainland province of Guangzhou, while moving on to build the Northern Ring Road in the city agreed earlier that year. Cheng himself wrote in New World’s annual report published in November 1997, the year of the handover, that the company has “sustained and actually increased our commitment, even when many investors were inclined to withdraw from China, as happened for example, after 4th June 1989, and more recently following the death of paramount leader Deng Xiaoping.”

The lesson for the elder Cheng’s descendants appears unmistakable: Hong Kong must count on mainland China for growth.

Indeed, New World Development is making bigger bets in the Greater Bay Area by snapping up 1.5 million sq. meters of floor area since 2016, with Guangzhou and Shenzhen being the key focus. Yet, it aspires to be more than a property developer in the area, consisting of economically prosperous cities where the 72 million population is dominated by young residents– a driving force for tertiary services and consumption.

“There is a lack of services. … So with a good brand with insurance services, wealth management services, financial services, different kinds of services, we will be able to complement the quality of life in the Greater Bay Area,” said Cheng, citing the high gross domestic product per capita in the region.

Indeed, the 50-year-old property developer has ventured into tertiary services in recent years via a number of high-profile investments and acquisitions. In 2018, with a view to expanding its life and medical insurance business, New World bought FTLife Insurance for HK$22 billion through its infrastructure subsidiary NWS Holdings, which also invested in WeDoctor, a Tencent Holdings-backed online health care services platform. In the same year, it launched Humansa, a Hong Kong-based health care service for elderly living in the Greater Bay Area.

“A lot of nice projects coming up,” Cheng said as he wrapped up the interview and hurried to another appointment. “We will continue to build awesome, monumental landmarks in Hong Kong.”

As Cheng left, the late afternoon shadows were lengthening into dusk. Over the glassy harbor stretched Golden Bauhinia Square, the site of China’s big annual flag-raising ceremony, bordered by the New World-developed exhibition and convention center that hosted the handover of sovereignty. The hulking building was commissioned in the 1980s, when Britain and China were negotiating the city’s future.

It is a reminder of the importance of being on the right side of history. Otherwise, there is a Chinese saying: “Wealth does not last three generations.”

Additional reporting by Kenji Kawase and Grace Li in Hong Kong and Dylan Loh in Singapore.





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Lantau Tomorrow: silver bullet for Hong Kong’s housing woes or costly white elephant?




The Hong Kong Legislative Council on Friday approved an initial funding requested to kick-start a feasibility study for Lantau Tomorrow Vision, a massive land reclamation scheme aimed at creating the city’s next housing and business hub.The contentious bill was passed in the absence of the opposition camp, whose members resigned en masse last month after four of their colleagues were summarily booted from the legislature over their political stance.But the HK$550 million (US$71 million) in…



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Hong Kong’s Lam says restoring ‘political system from chaos’ is priority



Hong Kong Chief Executive Carrie Lam delivers her annual policy address at the Legislative Council in Hong Kong, China November 25, 2020. REUTERS/Lam Yik

November 26, 2020

By Twinnie Siu and Clare Jim

HONG KONG (Reuters) – The Hong Kong government’s priority is to “restore the political system from chaos”, Chief Executive Carrie Lam said on Wednesday in her annual policy address, which did not deliver blockbuster steps to boost the economy or ease a housing crisis.

Lam’s lengthy address to the semi-autonomous city’s legislature was delayed by more than a month to accommodate her high-profile trip to Beijing for talks on how China can help with the finance hub’s economic recovery.

But after briefly mentioning the city will contribute to efforts towards further integration of the Greater Bay area, a region that includes Hong Kong, Macau and nine cities in China’s Guangdong province, she spent a large part of her address on the need to restore order and protect China’s national security.

The central government’s role in the former British colony has been in the spotlight, in particular with the imposition in June of a security law after months of pro-democracy protests – the most intense in decades – last year.

“In the past year or so, Hong Kong has experienced the most severe political challenges since its return to the motherland,” Lam said. “One of our urgent priorities is to restore … constitutional order and political system from chaos.”

She accused foreign governments and legislatures of increasing interference in Hong Kong’s affairs, which she said were China’s internal affairs, and that their actions were jeopardising national security.

Lam said the government will introduce a bill to “enhance oath-taking” by civil servants and conduct widespread public education “to enhance the understanding of the rule of law”.

The government will launch programmes to educate Hong Kong’s youth, who were at the frontlines of last year’s demonstrations, about respecting China’s national flag and its anthem.

Lam spoke at length about prioritising “moral development” of youth and strengthening “their sense of national identity and awareness of national security.”

Last year’s protests were triggered in part by fears in Hong Kong that the central government was whittling away the freedoms granted when the city returned to Chinese rule in 1997 under a “one country, two systems” formula.

Lam, the city’s least popular leader since the handover, presented her annual policy address via video last year after some opposition lawmakers disrupted the legislative session, jeering as she started her speech.

She did not face any opposition this year, after pro-democracy lawmakers resigned en masse after four of their colleagues were disqualified after China’s parliament gave city authorities powers to oust lawmakers without court scrutiny.

LANTAU TOMORROW RELOADED

A plan to build vast artificial islands, estimated to cost at least HK$624 billion ($80.51 billion) — the city’s most expensive infrastructure project — was expected to move further along in the coming year, Lam said.

The plan envisions building up to 400,000 housing units across 1,700 hectares of reclaimed land between Lantau island where the city’s airport is located and the main Hong Kong island. It is backed by powerhouse property developers including New World Development and Henderson Land.

The Lantau Tomorrow Vision was first announced by Lam in her policy address in October 2018, but legislative discussions have been delayed by social unrest. At that time, residents were expected to move into new housing by 2032.

Additionally, Lam said the government will relax investment limits for Real Estate Investment Trusts and remove the double stamp duty for commercial property transactions. The government had no plan to remove stamp duty on residential properties.

Other economic measures included support for an iconic floating restaurant and offering dental treatment support for the elderly.

The protests and later the novel coronavirus pandemic have battered the city’s economy, with full year gross domestic product (GDP) forecast to contract 6.1%.

(Reporting by Twinnie Siu, Donny Kwok, Clare Jim, Anne Marie Roantree; Writing by Marius Zaharia; Editing by Jacqueline Wong, Michael Perry and Kim Coghill)





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Hong Kong’s Broken Asylum System


More than 17 years after seeking refuge in Hong Kong, a 48-year-old former Sri Lankan soldier named Ajith Pushpakumara (above, right, with Robert Tibbo) is being told he has to start the process all over again, according to his attorney, Canadian human rights lawyer Robert Tibbo.

Pushpakumara’s story is an all-too-often heard tale of outright hostility t…



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Anxiety, isolation among Hong Kong’s elderly amid Covid-19 pandemic – and how you can help




Mental health issues among the elderly have drastically increased because of isolation and anxiety amid the coronavirus pandemic, according to a non-profit organisation best known for its 24-hour Care-on-Call Service.

The Senior Citizen Home Safety Association (SCHSA) reported a 52 per cent year-on-year increase in cases where elderly people needed emotional support, and a 36 per cent rise in cases deemed a “suicide risk”.

“We saw many people with signs of emotional distress and anxiety. In…



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Hong Kong’s pro-democracy lawmakers to resign en masse


Hong Kong’s pro-democracy lawmakers announced Wednesday they would resign en masse after four of them were ousted from the semiautonomous Chinese territory’s Legislature in a move one legislator said could sound the “death knell” for democracy there.

The resignation of the 15 remaining pro-democracy lawmakers will ratchet up tensions over the future of Hong Kong, a former British colony that has long been a regional financial hub and bastion of Western-style civil liberties but over which China’s government has increasingly tightened its control. A new national security law imposed by Beijing this year has alarmed the international community.

The mass departure will also leave Hong Kong’s Legislature with only pro-Beijing lawmakers, who already made up a majority but can now pass bills favoured by Beijing without much opposition.

The lawmakers told a news conference they would submit their letters of resignation on Thursday. The announcement came hours after the Hong Kong government said it was disqualifying the four legislators — Alvin Yeung, Dennis Kwok, Kwok Ka-ki and Kenneth Leung.

The ousters came after China’s National People’s Congress Standing Committee passed a resolution this week saying that any lawmaker who supports Hong Kong’s independence, refuses to acknowledge China’s sovereignty over the city, threatens national security, or asks external forces to interfere in the city’s affairs should be disqualified.

“Today we will resign from our positions because our partners, our colleagues have been disqualified by the central government’s ruthless move,” Wu Chi-wai, the leader of the pro-democracy camp, told reporters.

During the news conference, the lawmakers held hands and chanted, “Hong Kong add oil! Together we stand!” The phrase “add oil” is a direct translation of a Chinese expression of encouragement.

“This is an actual act by Beijing … to sound the death knell of Hong Kong’s democracy fight because they would think that, from now on, anyone they found to be politically incorrect or unpatriotic or are simply not likable to look at, they could just oust you using any means,” lawmaker Claudia Mo told reporters.

In recent months, Beijing has increasingly clamped down on Hong Kong, which it took back control of in 1997, despite promising at the time to leave the territory’s more open legal and economic systems intact for 50 years until 2047.

Beijing imposed a national security law in June that some have labeled draconian after anti-government protests rocked the city for months last year, and it has used it to crackdown on opposition voices.

In response, the U.S. levelled sanctions on several officials, including Hong Kong’s pro-Beijing leader, several Western countries have suspended their extradition treaties with the territory, and Australia and Britain offered Hong Kongers easier paths to settle in those countries.

Britain said Wednesday that the decision to remove the lawmakers raises further concerns.

“This campaign to harass, stifle and disqualify democratic opposition tarnishes China’s international reputation and undermines Hong Kong’s long-term stability,” Foreign Secretary Dominic Raab said in a statement.

Beijing has rejected the criticism and lashed out at what it calls gross foreign interference in Chinese politics.

On Wednesday, Hong Kong’s leader, Carrie Lam, defended the lawmakers’ removal, telling reporters that legislators must act properly and that the city needs a body comprised of patriots.

“We cannot allow members of the Legislative Council who have been judged in accordance with the law to be unable to fulfil the requirements and prerequisites for serving on the Legislative Council to continue to operate in the Legislative Council,” Lam said.

Still, Lam said that the Legislature would not become a rubber-stamp body, and that diverse opinion is welcome.

“In terms of legality and constitutionality, obviously, from our point of view, this is clearly in breach of the Basic Law and our rights to participate in public affairs, and a failure to observe due process,” Kwok, one of the ousted lawmakers, told reporters, referring to Hong Kong’s mini-constitution.

Earlier in the year, the four lawmakers were barred from seeking reelection in a vote originally scheduled for September — but remained in their posts. They were disqualified over their calls for foreign governments to impose sanctions on Hong Kong and Beijing.

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The government eventually postponed the planned September election by a year, citing the coronavirus, but the pro-democracy camp criticized the move as an attempt to block them from taking a majority of seats in the Legislature — which was a possibility in the coming election.

Chinese Foreign Ministry spokesperson Wang Wenbin said that the disqualification was necessary to maintain rule of law and constitutional order in Hong Kong.

“We firmly support the (Hong Kong) government in performing its duties in accordance with the Standing Committee’s decision,” Wang said at a regular news conference Wednesday.





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