Hong Kong business tycoon Li Ka-shing sold his property assets in Nanjing in January 2014 to Jiangsu Sanpower Group via Singapore ARA Asset Management, an affiliate of Li's Cheung Kong Group. Photo: CFP

 

Hong Kong billionaire Li Ka-shing's CK Hutchison Holdings on Tuesday denied that the company is withdrawing its vast investments in China, saying that its recent business transactions in China represented normal operations.  

The company is not withdrawing investment from China and recent purchases and sales in China are normal business moves, according to a statement sent to the Global Times on Tuesday. The statement came in response to media reports that the company is selling off assets in the Chinese mainland at knockdown prices and abandoning the market as the economy turns sluggish.

In an article published Saturday on the website of the Liaowang Institution, a thinktank affiliated with the Xinhua News Agency, Luo Tianhao, a research fellow at the State-owned Assets Supervision and Administration Commission of the State Council, said that Li continues to sell properties in China at "a sensitive time when the Chinese economy is facing a crisis." The article referred to Li's most recent move in which he listed a property in downtown Shanghai for 20 billion yuan ($3.14 billion). 

Luo suggested that Li received a lot of help from the Chinese government when his company first expanded into the mainland and that Li's recent moves in China had caused "negative sentiment" in some quarters. Luo said that Li had lost his "moral high ground."

Luo said that in certain sectors such as real estate and ports, which were the least commercialized, companies and developers needed help from the government in pursuing their projects, and it was "immoral" that Li had acquired assets through political power and was now selling them on the market.

Not all observers agreed with that assessment.

"This was just a pure business move that was driven by the market, and a strategy designed for the company's future development," said Li Zhanjun, research director at Shanghai-based E-House China R&D Institute. "We shouldn't look at this from a moral or political point of view." 

Media reports have surfaced from time to time in recent years saying that Li is moving out of the mainland by selling assets and shifting toward Europe.

For example, reports said on Tuesday that Li had sold properties in Beijing, Shanghai and other major cities in China for more than $15.7 billion in the past three years. Just last year, Li sold assets for about $11.6 billion, of which more than $2 billion involved property in China.

Meanwhile, Li has reportedly made heavy investments in Europe. For example, in Britain, he has acquired assets worth more than $50 billion. 

However, the analyst noted that these shifts reflected concern about the Chinese economy, which has been slowing for more than a year. Official data show that second-quarter GDP growth was 7 percent, half a percentage point less than a year earlier.

Rui Meng, a professor at the China Europe international Business School, said that the unsatisfactory growth rate affects investor confidence in the Chinese economy, which is the main explanation for Li's moves.

"Li is a very smart businessman," Rui said. With changes in the exchange rate and the peak of the property market having passed, "it is normal that he sold overvalued properties in China and went to Europe to buy undervalued properties."