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Beijing Versus the Billionaire

BANGKOK – China’s government and Hong Kong’s wealthiest man, the much-admired Li Ka-shing, have been waging an acidic spat – one that increasingly looks like a bitter divorce being played out in tabloid newspapers. Indeed, Chinese media have lately been directing a relentless stream of vitriol at Li. His “crime”? Buying low in Europe and selling high in China – that is, acting like an investor.

The trigger for this wave of scorn was Li’s sell-off of some of his prime Shanghai properties, after relocating his corporate registry from Hong Kong to the Cayman Islands. This is a completely mundane and rational business decision, aimed at minimizing tax obligations. Indeed, some 70% of all Hong Kong-listed companies have a Caribbean registry, and even a number of major mainland companies, including the Internet giant Alibaba, are registered in offshore tax havens.

But, in the Chinese media’s puerile narrative, the move exposes Li as “ungrateful” and “unpatriotic.” He is “abandoning” China – which, it is claimed, enabled him to rise from extreme poverty to become one of the world’s wealthiest men – when the country needs him most.

This absurd account neglects the fact that Li was already one of the world’s wealthiest people before he ever invested in China. Perhaps more important, it fails to recognize that Li’s Chinese land holdings still amount to more than 20 million square meters (215 million square feet) – nearly a quarter of the size of Manhattan – and that the number of retail outlets he owns in China has increased by 70% in two years.