.. poa Dock Company and create the Hutchision Whampoa. Hong Kong Bank was looking for a suitable investor to take over the pre-opium war hong and eventually they chose a rising real estate tycoon, Li Ka Shing. There are many reasons that Hong Kong Bank chose Li Ka Shing, but two reasons stand out the most, His reputation as a honest and able businessman and his contacts with the government in Beijing. Today, Hutchison Whampoa has grown into one of Hong Kong’s largest blue chip companies with over 70,000 employees worldwide. The Group operates five core businesses : Property Development and Investment, Ports and related services, Retailing and manufacturing, Telecomminications and Media, and Infrastrucutre and Energy.
Property Development and Investment Hutchison Whampoa Property develops residential and commerical properties for sale and lease. Its portfolio includes some of Hong Kong’s largest private housing projects and several landmark developments in the Mainland. Ports and related services The group’s expertise in port investment and management stems form its pioneering operations in Hong Kong. Its port operations arm, Hutchison International Port Holdings, is now exporting its professional experience and expertise to ports in different parts of the world. Retailing and manufacturing Watsons operates three of Asia’s most innovative retail chains:Park’N Shop supermarkets, Watson’s personal care stores, and Fortress, selling domestic electrical appliances.
The manufacturing division produces and distributes a wide range of food and beverages throughput Hong Kong, the mainland and other Asian countries. Telecommunications and Media Hutchison Telecom operates a wide range of intregrated telecommunications services worldwide and is one of the world’s major providers of mobile communications Infrastruture and Energy The Group has major shareholding in Cheung Kong Infrastructure, which holds interests in infrastructure and related businesses, and power plant projects such as the Hong Kong Electric. It is the sole supplier of electricity to Hong Kong Island. Husky Oil, is one of Canada’s largest privately owned oil and gas companies. For the fiscal year ending in December 31 1998, The Hutchison Whampoa Group had a net profit after tax of HK$8.7 billion.
It was lower than HK$12.2 billion from 1997. The Asian crisis which brought on pressures on the entire Asian region. It experienced a period of unprecedented asset and price deflation coupled with severe recessionary conditions. These conditions had the hardest impact on the Property/Development and Retail/manufacturing operations of the group in 1998. Li Ka Shing’s another main weapon in Asian business is his strong ties to the Chinese Government.
He has been favored since being the first Chinese to take over a western hong in the late 1970’s. He also played a large role in the transition period for the `97 handover of Hong Kong. Currently he has a strong influence in the policies that effect Hong Kong both through his contacts with Beijing and the Chief executive, Tung Chee Wha. HSBC Group Headquartered in London, HSBC holdings is one of the world’s largest banking and financial services organizations. The HSBC Group’s international network comprises more than 5,000 offices in 79 countries.
The HSBC Group is named after its founding member, The Hong Kong and Shanghi Banking Coporation limited. Hong Kong Bank, as it is known for short, was established in 1865 to finance the growing trade between China and Europe. The inspiration behind the founding of the bank was Thomas Sutherland, a Scot who was then working as the Hong Kong Superintendent of the Peninsular and Oriental Steam Navigation Company. He realised that there was considerable demand for local banking facilities in Hong Kong and the China coast and he helped to establish the bank in March 1865. Then, as now, the bank’s headquarters were at 1 Queen’s Road in Hong Kong and a branch was opened in April 1865 in Shanghai. Throughout the late nineteenth century and the early twentieth century, the bank established a network of agencies and branches based mainly in China and South East Asia but also with representation in the Indian sub-continent, Japan, Europe and North America.
In many of its branches the bank was the pioneer of modern banking practice. From the outset, trade finance was a strong feature of the bank’s business with bullion, exchange and merchant banking also playing an important part. Additionally, the bank also issued notes in many locations throughout the Far East. During the Second World War the bank was forced to close many of its branches and the head office was temporarily moved to London. However, after the war the bank played a key role in the reconstruction of the Hong Kong economy and set about further diversifying the geographical spread of the bank.
The post-war political and economic changes in the world forced HongkongBank to analyse its strategy for continued growth in the 1950s. The bank diversified both its business and its geographical spread through acquisitions and alliances. However, the bank remained committed to its historical markets and played an important part in the reconstruction of Hong Kong where its branch network continued to expand. In 1965 the bank purchased a controlling interest in Hang Seng Bank, which had been established in Hong Kong in 1933. By the 1970s the policy of expansion by acquisition of subsidiaries with their own identities and specialisations was firmly in place.
During the 1980s the bank concentrated on moving into those markets where it was not yet fully represented. Hongkong Bank of Canada was established in 1981 and HongkongBank of Australia Limited in 1986. In 1987 Marine Midland Bank, based in New York State, became a wholly owned member of the Group and its principal subsidiary in the United States. HSBC Holdings plc, the parent company of the HSBC Group, was established in 1991 with its shares quoted on both the London and Hong Kong stock exchanges. Conclusion Already almost two years have passed since the handover Hong Kong to the PRC.
It is hard to judge the impact of the handover to the Hong Kong economy, due to the Asian Financial Crisis in 1997. What is definite however is that Hong Kong has suffered a difficult 1998 and is still in the process of recovering. The good news is that the fallen prices of 1997 got rid of a lot of the bubbles that was being accumulated in the territory. Large landowners like Li may have had some losses but 1999 saw the economic prices and activities picking up again. Many say that the worst is over and that recover is in process.
Already land prices have recovered a lot of its losses during the 1997-8 period. The problem in the territory is more a political one. Many incidents have brought attention to the problem of implementing the one country, two system policy, which is fundamental in the Hong Kong Basic Law and which will guarntee the independent governing of Hong Kong. The main attraction that has made Hong Kong what it is today is it’s efficiency and lassie faire approach of the government. If the mainland interferes too much in Hong Kong, it status will decline as the international free port city that has made it so prosperous.
Bibliography Biblography Chan, Anthong B., Li Ka Shing, Hong Kong’s Elusive Billionaire, Oxford University Press, 1996. Clifford, Mark L, The Taipan’s Last Chance, Businessweek, April 26, 1999. Kraar, Louis, Inside Li Ka Shing’s Empire, Fortune, March 29, 1999. King, Frank H H, The History of the HongKong Shanghi Banking Coporation, 4 volumes (Cambridge University Press, 1987-91) Business.