Dynasties created by powerful and wealthy families dominate many parts of Asia, and Hong Kong is no exception. Apple Lam investigates the impact of such monopolising dominance on the city.
There is a Chinese idiom that says: “A family’s wealth is not passed on beyond three generations.”
But does it apply to Hong Kong, where many wealthy families continue to dominate multiple industries such as real estate, telecommunications, shipping ports, power plants, supermarkets and pharmacies?
Lee Cheuk-yan, a member of the Legislative Council, disagrees with this ancient adage.
“It’s an outdated concept,” he says.
Instead, he thinks the dominance of powerful families in Hong Kong is here to stay unless land is more equally distributed in Hong Kong.
“The origin of corporate monopolisation is real estate because owning property gives tycoons capital to push away all other competitors in the market. Property gives rich families a lot of cash with which to monopolise other industries,” Lee says. “They start off in real estate in the beginning and then they branch out into other industries.”
He points out the wealthiest people in Hong Kong are property developers.
Lee cites tycoon Li Ka-shing as an example, who owns supermarket chain PARKnSHOP, telecommunications company Hutchison Global Communications, Hutchison Whampoa which operates ports and hotels, among others. His sons Victor and Richard Li run Cheung Kong Holdings, which invests in property as well as health and agricultural products, and PCCW respectively.
Another example he gives is New World Development owned by property tycoon Cheng Yu-tung’s son Henry Cheng, who in turn runs the company with his own son Adrian Cheng. New World owns a plethora of residential properties, K11 shopping mall, jewellery company Chow Tai Fook, City Bus and New Bus.
Monopolisation across multiple core industries gives wealthy families advantages that perpetuate their continued dominance.
“Property developers that own housing estates would allow only telecommunications companies owned by them to offer services in those housing estates,” Lee says. “The same happens with property management and construction companies – property developers would only employ the very companies that they own for the job.”
Lee believes there will be no new wave of tycoons rising up from the middle class.
“Apart from the second-generation of the rich, have you seen new tycoons in Hong Kong? No. It’s impossible because the industries are all monopolised. No matter how creative or smart you are, you cannot possibly become a new tycoon because in Hong Kong, those who have land are the only ones who can get rich and their children will continue monopolising in the same way.”
This story first appeared on Human Resources’ sister publication, Marketing Magazine.