November 07, 2005

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The Empires Strike Back

Local tycoons breathed easier after this weekend now that the Legislative Council has seen fit to abolish estate taxes, taking HK$1.5 billion (US$200 mn) out of annual revenue. They have done this to make the city more attractive as a financial centre.

Hong Kong has always been considered a city where rags-to-riches stories can happen. Certainly that was true in earlier ages, like when Superman Li Ka-Shing began his career as a plastic-flower salesman in the 1950s. But over time, as the city has matured, the number of moving trucks from North Point to the Peak has slowed considerably. One wonders what effect this highly regressive tax break will have, and whether taking funds away from areas like English or Mandarin education is a good thing for the city. Certainly, one could argue that it will attract more wealthy immigrants, and having that capital at close hand would be good for Hong Kong.

But one thing it will definitely reinforce are the imperial, dynastic cycles of the local landed elite. Chinese have always loved the family business structure, and most companies here are some form of them. In an age when professional management is groomed to take over from company founders (like Newscorp now, for instance), Hong Kong tycoons have stubbornly stuck to handing over the reins to their sons. And this article I read about Victor Li's imminent inheritance of the Li Ka-Shing empire was particularly illuminating in this respect.

How can you resist this story about how Asia's most powerful man put his 10-year old son in a high chair at the table during Cheung Kong board meetings?

posted by HK Dave on 11.07.05 at 08:52 AM in the




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