Ty­coon’s move shows main­land’s space for spec­u­la­tion is shrink­ing

China Daily (Hong Kong) - - COMMENT - HONG KONG TY­COON,

Li Ka-shing put his Hutchi­son Global Com­mu­ni­ca­tions on sale on Sun­day at a price of HK$14.5 bil­lion ($1.86 bil­lion). Three days ear­lier his Che­ung Kong In­fra­struc­ture Hold­ings and Che­ung Kong Prop­erty Hold­ings an­nounced they will es­tab­lish a joint ven­ture to pur­chase Ista Lux­em­burg GmbH, a Ger­man en­ergy man­age­ment ser­vice provider, and all of its af­fil­i­ated com­pa­nies for about HK$41.4 bil­lion. Bei­jing News com­ments:

Li has made nearly 100 bil­lion yuan ($14.88 bil­lion) sell­ing his com­mer­cial real es­tate pro­jects in Hong Kong, Guangzhou, Shang­hai, Chongqing, Nan­jing and Bei­jing over the past nine years. Mean­while, he has in­vested in 13 for­eign com­pa­nies in en­ergy, trans­port and telecom­mu­ni­ca­tions in the United King­dom, Aus­tralia, Ire­land, the Nether­lands and Ger­many.

But there is no rea­son to be­lieve, as some have claimed, that Li is run­ning away with the money he made in China. For some­one as busi­ness savvy as Li, his so-called wealth trans­fer is in­vest­ment for fu­ture gains.

Nor does it mean the Chi­nese econ­omy is bank­rupt, as some have al­leged. Li’s de­ci­sion is in line with the changes in the main­land’s real es­tate mar-

ket amid its eco­nomic re­struc­tur­ing.

Of­fload­ing his com­mer­cial real es­tate prop­er­ties in China, which he has been do­ing for about nine years, shows Li has judged that the profit mar­gins of these com­mer­cial de­vel­op­ments are be­com­ing lim­ited.

This re­flects the fact that the room for spec­u­la­tion in the main­land mar­ket, which Li has built his for­tune on, is be­com­ing smaller and smaller. This demon­strates the progress the coun­try’s pol­i­cy­mak­ers have made in trans­form­ing the growth model, in which the real econ­omy, es­pe­cially the ad­vanced man­u­fac­tur­ing and ser­vice in­dus­tries, rep­re­sents the sus­tain­able fu­ture of the over­all econ­omy and is where new wealth leg­ends will be born.

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