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> Shantou University Business School Economic
Forum |
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| Q: |
How will traditional business fare in the New
Economy? Are you optimistic about emerging industries? |
| A: |
We are involved in a number of new industries,
such as biotechnology, and some others that have not yet been disclosed.
These are not capital-intensive industries. But if traditional businesses
can incorporate new technologies, they can enhance their efficiency
and increase their profit. All of our companies are doing just that.
We have businesses in 27 countries besides Hong Kong and the mainland,
and every one of these businesses is doing well. It is wonderful that
traditional businesses can integrate with emerging technologies. |
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| Q: |
Many companies, such as mainland's Haier, develop
a unique management style. Do Cheung Kong and Hutchison Whampoa have
their own style of management, and if so, what are its characteristics? |
| A: |
I understand Haier is in the electrical home appliances
business. We are a multi-national corporation with many different
types of businesses. We adopt a western style of management, but with
Chinese characteristics. In foreign companies, there are many Quarter
CEOs who are forced to resign if their company fails to perform. But
we are not like that. We are a compassionate organization. For instance,
if our peers in the same industry have reported a 90% profit loss,
and we record a loss of 60%, then I would reward the CEO. Conversely,
if other companies are making $100, and we are only making $80, then
I have to ask why we are not performing as well as other companies.
Foreign companies tend to focus on efficiency; Chinese companies lean
toward compassion. We are not a small operation. One of our companies
is ranked 90th in the world, and another is ranked 200th. Haier is
a very successful mainland company. They started by making refrigerators
with German technology. Their business is making very good progress.
But we are more than a manufacturer; we have a manufacturing business,
but in a different industry. We are involved in the oil industry.
Our container terminal business is the largest in the world. We handle
over 30 million TEUs every year. We are developing 3G mobile networks
in many countries, so the telecommunications business is a key component.
Many analysts are saying that the 3G launch will be delayed, that
we will not be able to roll out 3G services by next year. I have already
seen these handsets, and in Japan, 5,000 people will be using these
handsets in a trial run by the end of this month. To me, that is a
success.
In short, information is most important. Haier is a picture of success,
but we are in a different industry. |
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| Q: |
How did you formulate your strategy on Orange? |
| A: |
Orange was a miracle. About 11 years ago, we were
going in two directions-we were operating a one-way mobile system,
and at the same time we registered Orange which was a PCS system.
I tried it for myself, and the reception was very clear. The operation
was very successful.
However, very few people know why we finally sold the business. The
value of the business was extremely high. Someone came to Hong Kong
and offered us US$30 billion, but they were not the only interested
buyers. Someone else had offered about the same amount. I felt that
we should sell right away. If we were to build a 3G business with
the same number of customers, we would only require about US$12 billion.
3G offered everything 2G had and much more, including data transmission.
So the transaction took place less than two hours after we met, and
it became one of the largest transactions and the most profitable
deal in history. |
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| Q: |
It is said that when you do business in China,
you need to bring a lawyer and an accountant. What kind of changes
are taking place in China's investment environment? What are the differences
compared with other countries? |
| A: |
There are provincial and municipal officials, as
well as reporters present. May I speak frankly? Even if you have the
best accountants and lawyers, and ample funds; even when you are well
prepared, sometimes things can go awry. China is the most populous
nation in the world with enormous untapped potential. But in the past,
foreign investors coming to China have been placed at a disadvantage.
The Central Government has a perfect record for honoring its agreements
with foreigners. But there is still room for improvement at the provincial
and municipal levels. This is something that all of our leaders must
review. In general, western countries take contractual agreements
very seriously. It has only been about 20 years since China opened
up to the world, so I believe things will improve gradually, especially
now that we have entered the WTO. Even though we see some trouble
spots, we remain confident. |
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