For as long as most of Hong Kong’s protesters can remember, Li Ka-shing has been depicted in cartoons wearing blue tights and a red cape — the city’s soaring superman of investment, business success and aspiration.
But in the past few days, a new depiction of Hong Kong’s richest man has emerged on social media: a pro-Beijing politician posted an image of Mr Li’s face Photoshopped on to the body of a cockroach, with rough Cantonese slang branding him the “cockroach king”.
As the financial hub approaches the fourth month of a deepening political crisis, the insult could portend a critical shift in mainland China’s response to the protests, according to analysts. Beijing, which is preparing for the 70th anniversary of the founding of the People’s Republic of China on Tuesday, is keen for any opportunity to redirect the rage of Hong Kongers, who have been squeezed economically, away from the government and towards one of the city’s favourite sons.
“The smaller tycoons certainly feel vulnerable to anger in Hong Kong. But Li stands above those,” said a person who has worked closely with Mr Li’s business empire. “He is an icon. That is why Beijing will try to go after him.”
Many businesses that operate in Hong Kong and mainland China have already come under fierce attack from Beijing for their perceived support of the protests.
Cathay Pacific, the city’s flagship airline, and its parent group Swire, banks such as HSBC and BNP Paribas, and professional services firms including PwC, have all been attacked by Chinese state media.
The tycoons, many of whom have made their fortunes in property development, have also been accused of contributing to a shortage of affordable housing in the city.
But even as Beijing turns its ire on Hong Kong’s elite, some say that Mr Li has prepared for this threat better than any of his peers — and may have seen these events coming years ago.
Mr Li and CK Hutchison did not immediately respond to a request for comment. But the tycoon has been diversifying his business away from Hong Kong for decades.
Last month, he bought Greene King, the UK’s largest listed pub and brewery group, for £4.6bn including debt. The acquisition was the latest in a series of deals, including the 1991 purchase of Canadian energy company Husky, the 2010 buyout of EDF Energy’s UK electricity business, and the 2016 purchase of Duet, the Australian energy group. Hong Kong accounted for just 3 per cent of core earnings at CK Hutchison, the Li family’s holding group, as of mid-2019. By contrast, Europe contributed 54 per cent and Canada 10 per cent.
Analysts say the diversification strategy has been prescient — one that will help keep the business in Li family hands long after the patriarch has passed it on to his heirs and many other tycoons may be forced to sell to Beijing.
“Chinese guys, including Li Ka-shing, know that businesspeople have historically not been protected in China,” said Joseph Fan, a professor of finance at the Chinese University of Hong Kong. “Being diversified to avoid political turmoil is a smart move. But not everyone has been able to achieve this kind of diversification.”
Observers say the city’s other tycoons would struggle to move away from China now, with Hong Kong in turmoil.
Their assets are highly concentrated in the property sector and more reliant on the city and mainland China. Companies such as New World Development, owned by the Cheng family, the Kwok family’s Sun Hung Kai, and Henderson Land, the conglomerate owned by the Lee family, dominate the city’s property market but are relative newcomers to investment outside Hong Kong and China.
In comparison to the $31bn that Li family businesses have invested in the UK alone over the past decade, New World has made about $9bn in investments outside Hong Kong, although about $7.4bn of those deals have been done in China, according to an analysis of data from Dealogic.
Sun Hung Kai and Henderson Land have made a negligible number of overseas investments in the past 10 years, leaving their operations highly exposed to disruptions in the city.
Mr Li “has been at this for years”, said a Hong Kong-based banker who has worked with his empire. “The other developers can’t start [divesting] now and expect the same results. It’s a bit too late.”
Raymond Cheng, a property analyst at CIMB, adds that the tycoons’ focus on Hong Kong has only accelerated. “Those developers have acquired a lot of land in recent years and their assets are very concentrated here,” he said.
One solution to the tycoons’ problems is to sell to China’s state-owned companies. That process has already started, with some of Hong Kong’s largest businesses now owned by government-controlled groups.
In 2017, Cosco Shipping, the Chinese state-owned shipping company, agreed to acquire Orient Overseas Container Line, the shipping business owned by the family of former Hong Kong chief executive Tung Chee-hwa, for $6.3bn.
Even Mr Li in recent years has sought to sell down to the Chinese government. Two years ago, he struck the world’s most expensive deal for a single building: the sale of Hong Kong office tower The Center for HK$40.2bn ($5.2bn) to a consortium led by a Chinese state-backed energy company. That agreement fell through when the Chinese group pulled out.
“The future generation will not inherit the same political connections as their parents,” Prof Fan said. “They [will] inherit social problems and a battle between the rich and poor . . . Some might choose the easy way out and sell to the Chinese state.”