Sir Li Ka-Shing

What is behind the rise of populism in Hong Kong in recent years? What do you think the solution is?

The widening wealth gap is a growing global social problem and it is a very thorny issue for governments everywhere. If government set policies through the emotive lens of populist sentiments, it might make you feel better, but not necessarily fare better – it is a dangerous sliding slope and a cause for a vicious circle. I grew up poor; I understand poverty. If you need to worry about subsistence every single day, such tough experiences leave an imprint on your mind. But dwelling in bitterness and resentment only pins you down, the focus should always be on how to resolve our challenges. Simple measures of poverty relief are not the antidote to counter the complexities of intergenerational poverty, because it will not improve competency nor bolster competitiveness. It is disheartening that many politicians play on the public sentiment to serve self-interests like getting votes or solidifying power base. When a society is mired in discord, it will dent its economic vitality; which is hardly good for anyone. Reforms in education and self-enhancement are important tools to engender social upward mobility. I believe failing to do so is akin to a crime against the future. This advancing wave of technological explosion is more than mere mechanized replacement; it entails a sweeping reorganization in the chain of manufacturing process. We need to beef up human capital and the innovation ecosystem.

Hong Kong needs to play catch up in the race for knowledge development and innovation investment. The future is all about technology, its outlook is bright and could be a real solution to bridge the wealth gap. This is the responsibility of the government.

The boom of the gaming industry in Macau provides many job opportunities for Hong Kong, but we should not be misled by the unemployment rate of 3.3 percent and be complacent about the urgency to compete for quality jobs. Such short-term vision will sow seeds of trouble for tomorrow.

Just by looking at numbers, Hong Kong labour statistics show increasing optimism within the tech industry. When contrasted against international surveys, however, figures reveal that our definitions of employment and achievements within the tech industry are actually below global standards. According to the Hong Kong government, about 30,000 people, or 80 per 10,000 employed, are tech employees. And according to other leading surveys, in countries with advanced technological output, such as Israel, IT staff and engineers account for 140 per 10,000 employed; the figures are 85 in the United States, 80 in Japan, 45 in China and 32 in Singapore, yet we must wonder why Hong Kong is not on this list. In Hong Kong, how many of these employees are actually scientists and IT professionals? Are our government policy and environment conducive to technological developments? A high-quality employment environment should encourage each individual to perform in his full capacity and under a diversified industry structure.

How should Hong Kong encourage innovation?

If we compare Singapore and Hong Kong, you will find that public sentiment towards social and business environment is quite different. You don’t see Singapore screaming against foreign investors benefiting from their investments in the local economy. Singapore’s policy towards foreign labour is more proactive but its unemployment rate is more or less the same as Hong Kong’s. Unlike Hong Kong, Singapore does not enjoy the committed support of Mainland. In addition, Singapore needs to shoulder a budget for foreign policy and national defence, but the Singapore government is quite committed to attract capital and talents- innovation has brought continual success to Singapore. In 1997, Hong Kong’s GDP was similar to Singapore’s. But nowadays, Singapore’s is at least 30% higher than Hong Kong’s. Improving our competitiveness must be a priority. Attitude could be a force or a hindrance, we have a traditional saying: “a wild stallion turned loose will be hard to recapture” – fostering populist sentimentality is the same.

Currently in Hong Kong, minor issues are easily amplified into social problems or disputes. How can society smoothly transform into a healthy democracy?

To me, having the privilege to choose is a blessing. A healthy democratic society is built upon the rule of law, is inclusive, tolerant and embraces diversity. I have often wondered if a democratic system could effectively turn a closed-minded society into an open-minded society. We need to balance social responsibility and interests. Do you know how many people in Hong Kong pay taxes? You will be surprised to know, that according to the Inland Revenue Department, (in the 2011/2012 year) only 5 percent of the population shouldered 91 percent of the income tax. Recently, there is a lot of heated debate over the theory of zero marginal productivity. Proposed by economist Tyler Cowen, the theory suggests that amid our recovering economy, an asymmetric balance between people’s incomes and benefits versus their output could well be the cause for continuously high unemployment rates. Someone told me that a lot of big foreign companies interview executives with the question: “Do you have any experience with layoffs?” That speaks a lot to today’s investment strategy: enterprises prefer to invest in competitiveness through enhancing efficiency and maintaining only a high quality workforce. Therefore, I have repeatedly advocated for the government to consider increasing profit taxes, maybe a hike of 0.5 percent and earmark it for continuous education and retraining as an investment to human capital. We should always support means to increase opportunities for the younger generation. I am all for the government granting tax preferences or exemptions for small enterprises in the technology sector to encourage their development.

This interview was published in full in the July – December 2017 issue of I-MAGAZINE.