Li’s younger, more high-profile son Richard has a stake in a family trust but runs his own telecom empire. He says he follows two of his father’s business lessons. The first is to “leave something on the table for the other side” in business transactions because that will help to bring deals back to you in the future. The second is a message his father wrote down for him when he was younger: Success is all about planning, studying downside risk and execution; “arrogance leads to failure.”
For his part, Li senior went out of his way to emphasize to me his confidence about the outlook for his own businesses, and that having a succession plan shouldn’t be interpreted to mean he has any immediate plans to retire. “I am not saying that I have a timetable for retirement–I am very healthy,” he says, almost needlessly, right before I leave him. And even if he does retire, he adds, he will remain at his foundation, keeping himself as young as he can by continuing to keep an eye on technology and the future.
Li Ka-shing shares his views on China, Europe, democracy and hard work.
Forbes: What’s ahead for the global economy?
LI: I’m definitely concerned about the present state of the global economy. Both the U.S. and Europe are dealing with economic and political issues. Inevitably, all Western countries and even some countries in the East are democracies, with their leaders elected by popular vote. This is what our world values. Any political party that aspires to power as president or prime minister must take into account the will of the people, which means finding the means to provide excellent welfare benefits and shortened working hours. This results in a larger and larger deficit. This will make recovery more difficult and extend the time frame for a full economic recovery. Asia is faring better, but it will also be affected. The coming few years won’t be easy, with GDP growth slowing. Yet our group provides products and services for the masses, not luxury products.
In the midst of tough times for Europe you made some big investments in the U.K. last year. Why are you optimistic about its economy?
Although the U.K. is part of Europe, the British pound remains separate from the euro currency. The British currency is relatively stable. The U.K. has good law and order. I trust that this country has accountability. The U.K. has greater flexibility, which is why I am not as concerned about the U.K. as I am about other European countries.
There are a lot of worries about China’s economy. What’s your take?
I believe China can maintain GDP growth of at least 6 per cent to 8 per cent. The increase in wages for labourers outpaced inflation, which contributes to the stability of society. Purchasing power is also strengthening.
Every year about 10 million people are moving from rural areas to urban areas for employment. In ten years it will be 100 million. Average wages in urban areas are higher than those in rural areas. I expect wages will continue to rise in double digits in the coming ten years. As for housing, the demand will still be there. Profit from property projects is not astronomical, but we can make a reasonable profit.
So those talking about a hard landing are wrong?
It will be a soft landing. We will slow our pace of land acquisition in China, but we will continue to buy.
What advice would you give a young entrepreneur or young person about how to find success in life?
Starting a business is not easy. I started my business in 1950 with only $8,700. It wasn’t a lot. You could buy a Cadillac or a Lincoln with it. For a young entrepreneur today, hard work is more important than opportunities. If you don’t work hard, opportunities will slip away.
With reporting by Steven Bertoni and Luisa Kroll.