Thomas White Global Investing
Global Players

Global Players

June 2012

Leung Chun-ying, Chief Executiv-elect, Hong Kong Special Administrative Region


“Rule of law, human rights, integrity, lack of corruption and press freedom are all part of our life”

— Leung Chun-ying after being elected as Chief Executive of Hong Kong


If you ever ask a Hong Kong octogenarian what kind of a place Hong Kong was in the 1950’s, the most likely answer you would get is “leisurely.” A sepia-tinted image of Hong Kong of this bygone era certainly speaks volumes about the pace of life there – no world-beating skylines, no speeding cars, and no traffic jams. Hong Kong then was a tiny piece of land that was ravaged by the Second World War. Thousands of migrants from mainland China were quietly sneaking into the British-controlled territory on moonless nights adding to the city’s already high unemployment. If people had one commodity in excess, then it surely was time. Hong Kongers treated themselves generously to the Cantonese Opera – the king of entertainment of the day.

And, of course there were the industrious people. They were mostly engaged in simple tasks like plastic-flower weaving and working as porters in the busy harbor area.

It was against this backdrop that Leung Chun-ying, who was elected the Chief Executive of the Hong Kong Special Administrative Region in March 2012, grew up. Chun-ying’s father served on the Hong Kong police force and Chun-ying’s family, which included his mother and two younger sisters, occupied a community house with washroom facilities shared with other police families.

Every day young Chun-ying, still clad in his half-trousers, ran back home after school to help his mother weave the plastic flowers. When his mother finished weaving those flowers, Chun-ying was ready to pack them into bundles and carry them on his shoulders to be delivered to the nearby factory. Now 57, Chun-ying, proudly pointing to his right shoulder, calls it sturdier than his left, thanks to the manual labor of his childhood.

Chun-ying’s shoulders are now ready to be draped with bouquets of real flowers as he will formally take up the role of Hong Kong’s Chief Executive on July 1, 2012. Chun-ying’s journey from a community home to the seat of power in one of the world’s richest places is a classic rags-to-riches tale replete with persistence, hard work and some shrewd decision-making. In an interview given to CNTV   he recalled his childhood lesson for life, “Earn your living no matter how bad the times may be.”

And indeed, Chun-ying did earn his living by making the most of opportunities. Despite the hardships at home, at school, Chun-ying ranked at the top of his class consistently, which helped him win a five-year scholarship from the very police force that his father belonged to. Using the scholarship, Chun-ying set foot at King’s College, one of Hong Kong’s prestigious and oldest schools, filled with the children of the city’s elite. The grandiose yet disciplined atmosphere at King’s only made Chun-ying dream bigger.

In Chun-ying’s tiny Hong Kong it was land that was king. Chun-ying’s own experience of sharing a cramped room with his family members, coupled with the newfound prestige associated with occupying the best real estate in Hong Kong, impressed upon him the importance of land and property. After completing a diploma in building surveying, Chun-ying left for the United Kingdom to study property valuation and real estate management at the Bristol Polytechnic.

As Chun-ying paid for his education by waiting tables and giving Chinese lessons in Britain, he met many Chinese students just like himself. Networking with them in the 1970’s, he realized that China, the land of his forefathers, would one day grow to be an economic powerhouse. But China was still a closed economy and the best bet for an enterprising young man was to wait for his time to come. Instead of settling for a comfortable life in Britain, Chun-ying packed his bags for Hong Kong to explore opportunities that might arise out of the Middle Kingdom.

Back in Hong Kong, Chun-ying joined the real estate firm Jones Lang Wootton. Before turning 30 he became the youngest partner in the firm, and by the end of his 5th year he took home a salary of HK$10 million, which earned him the nickname ‘Emperor of the working class.’

No amount of money though, could douse Chun-ying’s ambitions of exploring business opportunities in China. When he realized that his firm was not proactive in entering China for more business, Chun-ying hopped into China at his own expense. He quickly befriended local authorities in China and started advising them on town planning and property rights. In the early 80’s, one fishing village under Chun-ying’s advisement with barely a thousand residents was Shenzhen. Today, Shenzhen has grown into a metropolis of 10 million people with a GDP of nearly $150 billion. Chun-ying also played a role in the urban planning initiatives in Shanghai and Tianjian as well. Meanwhile, Chun-ying’s star in Hong Kong began to rise as the real estate consultancy he founded merged with a larger Singapore-based property firm. He now had become immensely rich.

Starting from the late 1990’s, Chun-ying actively participated in Hong Kong’s politics and became the Convenor of the Executive Council of Hong Kong. When Chun-ying decided to run for the Chief Executive of Hong Kong in 2011 he was faced with a formidable opposition candidate in Henry Tang, who was the heir to a textile business fortune and was backed by some of Asia’s wealthiest property magnets.

Nonetheless, Chun-ying’s humble roots coupled with implicit support from China saw him finish the race as the winner.

But Chun-ying also faces immense tests ahead. The first one deals with the electoral process in Hong Kong. The 7.1 million citizens of Hong Kong currently cannot directly vote for their chief executive. Instead, only a closed 1,200 strong Election Committee composed of industrialists, academics and other professionals chose Chun-ying, spurring criticism that the chief executive does not have broad support among common citizens. Further, Chun-ying’s perceived proximity to Communist Party officials in China has angered those who treasure Hong Kong’s relatively liberal system that allows an independent press and freedom of assembly compared to stringent laws in China. Hong Kong will also be readying for a more broad-based electoral process that will allow its 7.1 million citizens to choose their chief executive in 2017 through universal suffrage.

These events are not only important for Hong Kong but also for China.

Hong Kong is changing at a much-faster pace these days. While it lost its slow-pace of life of the 1950’s sometime ago, Hong Kong is undergoing a profound political transformation. This metamorphosis most likely will happen under Chun-ying’s reign as chief executive of Hong Kong. And with this, Chung-ying’s every step will be analyzed, as the world is keenly watching what Hong Kong means to China and by extension, what China means to the world.

 

 

 

 

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