Less than a decade ago, Hong Kong’s richest man, Mr Li Ka-shing, was granted an exclusive audience with China’s then-President Hu Jintao, a rare honour.
State television lauded the September 2010 meeting, saying Mr Hu lavished praise on the tycoon for contributing to the city’s prosperity and stability.
These days, as Hong Kong reels from months of violent demonstrations, China’s government is weaving a much harsher narrative around the billionaires who dominate the business and politics of the city.
In recent weeks, it’s linked them to the rising inequality it blames for the social unrest, a new stance that threatens the close ties Hong Kong dynasties have forged with Beijing.
While most of Hong Kong’s wealthiest families have sprawling property holdings, they also dominate industries from telecommunications to retail, giving them outsize influence.
The 20 Hong Kong tycoons tracked by the Bloomberg Billionaires Index – including moguls like Mr Li and property magnate Lee Shau Kee – have a combined net worth of more than US$200 billion (S$276.06 billion). So any shift in China’s posture toward those wealthy families has the potential in coming years to ripple through the city’s US$360 billion economy.
In a scathing article posted on social media earlier this month, China’s Central Political and Legal Affairs Commission, the nation’s most powerful law-enforcement body, lashed out at Hong Kong’s property tycoons for “hoarding land and grabbing money”.
Next, the Communist Party’s mouthpiece, the People’s Daily, said the government should take away land from Hong Kong developers through compulsory acquisition.
“It is very clear that Beijing’s attitude toward Hong Kong’s property tycoons has changed,” said Mr Joseph Wong, who was secretary for commerce, industry and technology under the city’s former leader, or chief executive, Mr Donald Tsang.
China appears to be encouraging state-backed enterprises to expand in Hong Kong, a special administrative region, and, over the coming years, these companies likely will play a leading role in industries the tycoons have controlled, Mr Wong said.
China Mobile Ltd, the mainland’s biggest carrier, has increased its subscriber base in Hong Kong by more than 50 per cent since 2016, according to data compiled by Bloomberg News.
Mainland developers, including China Resources Land Ltd, bought almost 60 per cent of the residential land sold by Hong Kong’s government in the first half of this year.
Representatives at family holding companies of Mr Li and Mr Lee didn’t respond to requests for comment.
While much of their power comes from these informal relationships, members of the wealthiest families in Hong Kong also have official positions, including on the election committee of about 1,200 people that selects the city’s leader.
Hong Kong business people sit on the Chinese People’s Political Consultative Conference, an advisory body that meets once a year in Beijing.
Chinese leaders were friendly toward the tycoons when the mainland economy was opening up because they wanted to encourage them to invest across the border, said Mr Ding Yifan, a former senior government researcher who now teaches world economy at Beijing Foreign Studies University.
“Now that things have hit the fan, they realise there are many things quite unfair in Hong Kong,” he said.
“Of course they need to deal with these problems.”
Hong Kong’s protests erupted in June in response to a proposed Bill that would have allowed extraditions to mainland China.
They’ve continued even after that legislation was shelved, with protesters making other demands, including universal suffrage and an investigation into police actions toward demonstrators.
China’s office for Hong Kong and Macau affairs this month said it would support Hong Kong’s leader, Ms Carrie Lam, in efforts to address social problems such as the housing shortage, the large wealth gap and the difficulty in upward social mobility. Hong Kong has the world’s least affordable housing.
At the end of July, about half of Hong Kong’s new apartments for sale came from five of its largest developers – including the Li family’s CK Asset Holdings Ltd; Henderson Land Development Co of the Lee family; and Sun Hung Kai Properties Ltd, controlled by the Kwok family – according to an analysis of data from realtor Centaline Property Agency.
Meanwhile, half of the city’s mobile phone users subscribe to providers controlled by the Li and Kwok families, according to government data and earnings reports.
In some industries, the wealthiest Hong Kong Chinese families share power with dynasties that are a holdover from the British.
The Li family’s AS Watson Group and Dairy Farm International Holdings Ltd, linked to the Keswick family, control 70 per cent of the supermarkets, according to data from Euromonitor International. Representatives for the Kwok and Keswick family businesses declined to comment.
Beijing’s priority has shifted toward pursuing social equality, said Professor Li Xiaobing of Nankai University in Tianjin, who has written on Chinese regional politics.
“The central government wishes tycoons to contribute more to society,” Prof Li said.
That shift has come as China searches for answers to end Hong Kong’s protests.
On Wednesday, developer New World Development Co, run by the billionaire Cheng family, announced that it will donate 3 million square feet of land to help ease Hong Kong’s housing crisis.
In recent weeks, several tycoons, including real-estate and casino magnate Lui Che-woo, have attempted to show Beijing their loyalty by issuing statements or placing newspaper advertisements condemning violence and pledging full support to the government.
Mr Li earlier this month called for the government to “have mercy” on Hong Kong’s young people and for the youth to show more understanding. But China’s highest law-enforcement body lashed out, accusing Mr Li of encouraging crime. The 91-year-old billionaire then said his remarks were misinterpreted.
Hong Kong’s billionaire families long hedged their risks because they knew their political and economic favours wouldn’t last forever, said Dr Joseph Fan, a professor at the Chinese University of Hong Kong who studies family-run businesses.
Some tycoons, in recent years, sold their businesses to mainland firms. In 2018, former city Chief Executive Tung Chee-hwa’s family sold its stake in a shipping line to state-owned Cosco Shipping Holdings Co.
That year, the real-estate arm of Mr Li’s business group sold its stake in an office tower, The Centre, for about US$5 billion to a consortium controlled by mainland companies.
Mr Michael Tien, a pro-Beijing lawmaker in Hong Kong and a deputy to China’s National People’s Congress, expects more mainland firms to play leading roles in Hong Kong industries traditionally controlled by tycoons.
“In the long run, we all know that the future belongs to mainland Chinese capital,” he said.