Li Ka-shing 1928–
Chairman, Cheung Kong Holdings; chairman, Hutchison Whampoa
Born: June 13, 1928, in Chaozhou, Guangdong, China.
Family: Son of Li Yunjing (primary school head); married Amy Li Ching Yuiet-ming (founding director of Cheung Kong Holdings; deceased 1990); children: two.
Career: 1944–1949, plastic-goods salesman; Cheung Kong Industries, 1950–1971, chairman; Cheung Kong Holdings, 1971–, chairman; Hutchinson Whampoa, 1979–, chairman.
Awards: Grand Officer of the Order Vasco Nuñez de Balboa, Panama, 1982; Commander in the Leopold Order, Belgium, 1986; Knight of the British Empire, United Kingdom, 2000; Grand Bauhinia Medal, Hong Kong, 2001; honorary Doctorates, University of Cambridge, University of Calgary, Beijing University, and five universities in Hong Kong.
Address: Cheung Kong Holdings, Cheung Kong Center, 7th Floor, 2 Queen's Road, Central Hong Kong; Hutchison Whampoa, Hutchison House, 22nd Floor, 10 Harcourt Road, Hong Kong; http://www.ckh.com.hk; http://www.hutchison-whampoa.com.
■ The wealthiest man in Asia, Li Ka-shing was nicknamed "Superman" in Hong Kong, where his global empire was based. His political and financial influence, as derived from his diverse holdings, which included real estate, ports, telecommunications, finance, infrastructure, and biotechnology, led AsiaWeek to call him "the most powerful man in Asia" in 2000. Born in mainland China, Li came to Hong Kong as a poor immigrant in 1940 and launched his career making and exporting plastic flowers. He lived a relatively modest lifestyle and contributed millions of dollars to various philanthropic interests.
POVERTY AND AMBITION
Although his father was the head of a primary school in Guangdong province, Li had little opportunity for formal education. He was 12 years old in 1940 when his family fled the Japanese invasion of China. Within three years of their arrival in Hong Kong, his father had died, and the teenage Li was helping to support the family by selling plastic watchbands and belts.
Li proved to be a capable salesman and started his own plastics factory in Hong Kong in 1950. By 1958 he had a flourishing business manufacturing plastic flowers and was ready to expand. He named the firm Cheung Kong Industries, after the Cheung Kong River—also known as the Yangtze—the longest river in China. The name was reportedly an allusion to both the river's many tributaries and the need for business alliances.
FROM PLASTIC TO PROPERTY TO CONGLOMERATE
By 1958, when his landlord raised its rent, Li had enough cash to purchase his factory. This would be the first of many investments in real estate; by the 1960s Cheung Kong had transformed into a property development and management company. Li's strategy was to avoid debt by raising capital before building, both through the formation of joint ventures with landowners and by preselling apartments to friends and colleagues. As such Cheung Kong could incur fewer risks while still earning profits for both Li and his co-investors, fueling rapid growth. The company, renamed Cheung Kong Holdings in 1971, had its initial public offering in 1972. By 1979 Li was Hong Kong's largest private landlord.
Once again success led Li to expand his corporate efforts in a new direction, this time through the acquisition of one of the oldest British "hongs," or trading companies. Hutchison Whampoa had been created in 1977 by a merger between the financially troubled Hutchison International, founded in 1880, and Hongkong and Whampoa Dock, which had been the first registered company in Hong Kong when it was founded in 1861. In 1979 Li bought 23 percent of Hutchison Whampoa from Hongkong & Shanghai Bank, becoming the first Chinese to control one of the old British companies that had long dominated Hong Kong's economy.
Over the years Li gradually increased his equity—to 49.9 percent by 2004—and used Hutchison Whampoa to move into a variety of other businesses, demonstrating a talent for deal making that earned him the nickname "Superman." During the 1980s Hutchison Whampoa expanded its container ports and in 1985 bought 33 percent of Hongkong Electric Holdings. Li next began to extend his empire outside of Asia, starting in Canada, where his two sons were educated, with investments in the Canadian Imperial Bank of Commerce and Husky Oil. Hutchison Telecommunications, a Hong Kong mobile-phone service launched in 1985, became a major player in telecommunications in the 1990s, building the Orange PCS mobile network in Europe, which Li sold to Mannes-mann in 1999 for $14.6 billion in cash and equity.
Li's two primary corporate entities, Cheung Kong and Hutchison Whampoa, were intertwined: Cheung Kong Holdings owned 49.9 percent of Hutchison Whampoa, and Hutchison Whampoa owned 85 percent of Cheung Kong Infrastructure. Cheung Kong, with 175,000 employees worldwide and operations in 39 countries, eventually moved into biotechnology and internet services. By early 2004 the various Cheung Kong companies represented 11.5 percent of the total market capitalization of Hong Kong's stock exchange. Hutchison Whampoa was the world's largest port operator as of 2004; meanwhile its retail and manufacturing segments accounted for more than 40 percent of company sales, with thousands of retail outlets selling wide varieties of products across Europe and Asia.
BRIDGES TO BEIJING
Decades after his family's escape from political turmoil in China, Li built strong political and economic ties to mainland China. According to ChinaOnline.com, he "advised the late Deng Xiaoping during the Sino-British talks, which led to the 1984 Joint Declaration on Hong Kong's future"; he also served on the committee that drafted Hong Kong's constitution. AsiaWeek noted that he was "known to talk directly with President Jiang Zemin and Premier Zhu Rongji" (May 2000). He invested billions of dollars in ports, infrastructure, and realestate development projects in China; he founded Shantou University near his hometown in Guangdong in 1981, donating an estimated $150 million to build its campus. Li's links to Beijing made American politicians uneasy in the late 1990s, when some feared that his control of ports at both ends of the Panama Canal represented a potential security threat.
Li's Beijing connections proved useful when his older son was kidnapped in 1996. Rather than getting the Hong Kong police involved, Li paid $125 million in ransom and also reportedly asked the mainland government for help; in 1998 the kidnapper was captured and executed.
A TRADITIONAL DYNASTY
Most accounts described Li as personally unpretentious and frugal, leading a modest lifestyle that reflected his respect for traditional Chinese values. His philanthropy was well known throughout Asia, where his Li Ka-shing Foundation, created in 1981, contributed about $500 million in the fields of health and education.
While Li remained actively in control of his empire into the early years of the 21st century, his two sons had begun to play prominent roles in the international business world. Richard Li, the younger and more flamboyant of the two, had his own firm, Pacific Century CyberWorks, which invested in various internet start-ups and in 2000 acquired Hong Kong Cable & Wireless. Victor Li, the elder brother, remained at his father's side, running the day-to-day operations of Cheung Kong as vice chairman; as of 2004 most observers believed Victor Li would inherit control of the Li empire.
See also entries on Cheung Kong (Holdings) Limited and Hutchison Whampoa Limited in International Directory of Company Histories.
sources for further information
Cheng, Allen T., and Yulanda Chung, "Up, Up and Away," AsiaWeek, May 2000.
Kraar, Louis, "A Billionaire's Global Strategy," Fortune, July 13, 1992, p. 106.
"Li Ka-shing, Hong Kong Entrepreneur, Founder of Cheung Kong and Chairman of Whampoa, Hutchison," http://chinaonline.com/refer/biographies/secure/c00121166.asp.
Spaeth, Anthony, "Clans on the Run," Time, April 19, 2004.
—Sandra M. Larkin