[The Epoch Times, May 11, 2022](The Epoch Times reporter Ye Yifan interviewed and reported) Hong Kong’s richest man Li Ka-shing’s company suddenly appeared in China’s land auction after a lapse of ten years, bidding for a land parcel in Guangzhou. For this auction, some commented that it was because Li Ka-shing saw an opportunity, and some commented that this 100% “show” was a superficial article made under pressure.
On May 5, Guangzhou, Guangdong province, China ushered in the first round of centralized land supply auctions, selling 18 residential land in one day, earning a total of 34.1 billion yuan ($5.4 billion), according to the Financial Associated Press.
In this auction, the most eye-catching plot was the plot in the middle of Konggang Avenue, Baiyun District. After 25 rounds of bidding, China Overseas Real Estate won the bid for RMB 2.72 billion (US$ 438 million), a premium of 15%.
In addition to a group of CCP central enterprises competing for this land, there is also Hutchison Whampoa Limited (formerly listed on the Stock Exchange: 0013), which has not appeared for a long time. There is further action, but its appearance is still quite remarkable.
Hutchison Whampoa is under Li Ka-shing’s “Changhe Department” business empire. As early as the 1990s, the Changhe Department entered the real estate market in mainland China with two companies, Cheung Kong Holdings and Hutchison Whampoa.
In June 2015, CK Hutchison Industries and Hutchison Whampoa completed business restructuring and merger, forming a territory dominated by four Hong Kong-listed platforms, namely CK Hutchison (00001.HK) and Cheung Kong Group (01113.HK) , Power Industry (00006.HK) and Cheung Kong Infrastructure (01038.HK).
This time, Hutchison Whampoa once again participated in land auctions in the open market in mainland China after nearly ten years of breaches. Since December 4, 2012, Hutchison Whampoa has not made a large-scale land acquisition in China since it bought a piece of land in Wuhan’s Caidian district for 23.2 million yuan ($3.65 million).
Li Ka-shing, known as one of the world‘s most shrewd businessmen, has always been a market vane. Although Li Ka-shing’s bid in Guangzhou was unsuccessful this time, the signal that his company has rarely appeared in China’s land auction market has caused the market to wonder.
Xiao Wenxiao, chief analyst of Guangzhou Kerui, told the Financial Associated Press, “A company that has been absent for a long time suddenly appeared, and it should have seen an opportunity.”
And a user named “Gufeng” posted on Twitter that Li Ka-shing dared to eat “returning grass” in the current economic downturn in China, not because the business environment in mainland China has improved, but because he is looking for the bottom (taking advantage of the price). It is not only the bottom of the economy, but also the political bottom of Xi Jinping, the general secretary of the Communist Party of China. Gu Feng said that Li Ka-shing is not only “a great businessman with hands and eyes, but also a super politician”.
Li Yuanhua, a current affairs commentator and former associate professor of Capital Normal University, said in an interview with The Epoch Times, “He doesn’t want to mess with the bargain hunters, just show off, 100% show off.” He believes that since Li Ka-shing has decided to leave, it is impossible to turn back easily.
Since 2013, Cheung Kong and Hutchison Whampoa have been selling assets in mainland China one after another. The Li family sold the Guangzhou project for 1.6 billion yuan ($240 million) in August 2013, after Hutchison and Cheung Kong transferred their 50 percent stake in Guangzhou Xicheng Duhui Plaza, according to the China Times. Since then, the Li family has sold projects such as Surbana International in the North Bund in Hongkou District, Shanghai, Oriental Huijing Center in Lujiazui, Nanjing, and Beijing Yingke Center.
According to institutional statistics, in the past two years, Li Ka-shing sold nearly 100 billion yuan (about 14.7 billion U.S. dollars) of property and assets in mainland China, while in the past year, nearly 100 billion yuan of assets were sold in Hong Kong and mainland China. 80 billion yuan ($11.9 billion).
Li Yuanhua believes that the reason for Li Ka-shing’s early withdrawal of capital is that he does not agree with the CCP’s economic development model. At the same time, he has long seen that China’s economy is declining, not only has no development potential, but will collapse sooner or later. His actions this time are just to force A superficial article made under the pressure of a certain faction of the CCP, because the CCP has recently made great fanfare to encourage ordinary people to invest in real estate due to the economic downturn.
“He didn’t belong to Xi Jinping’s camp originally, he benefited from the era of Jiang Zeng (Jiang Zemin, Zeng Qinghong) in power. After Xi Jinping came to power, there was no real support behind him. At the same time, he saw different political factions fighting infighting. ‘Change of dynasty’, he also has to leave.” Li Yuanhua said.
In September 2021, Changshi Group sold the Shanghai property Li Ka-shing acquired in 2005, Scorecity Investments Limited. According to the proportion of assets held, Li Ka-shing will cash out 2.1 billion yuan (310 million US dollars).
On March 17 this year, the 2021 annual report released by Changjiang Hutchison and Changshi Group showed that the land bank of Changshi Group in mainland China continued to decline, down another 4 million square feet from the previous fiscal year.
According to the annual report of Changjiang Hutchison, although many European assets of the Li family have been sold, the European market will account for as much as 55% of its 2021 revenue, and mainland China will only account for 10%.
Li Yuanhua believes that Li Ka-shing’s shrewdness lies in his pre-judgment and concealed withdrawal of capital. “Now those people in China can’t be withdrawn. If these people have money overseas, they will immediately pack up and leave, but the CCP does not allow those people to transfer their money and leave, they will die together, and they will sink together. All vested interests in the combination of government and business are tied together.”
Responsible editor: Lian Shuhua#