Vincent Lo, chairman of Shui On Group, is on the show this week.

Lo shares with us why he doesn't think Hong Kong is just another Chinese city and how we can position ourselves to play a more prominent role in the country's grand scheme of plans, such as the Belt and Road and the Guangdong-Hong Kong-Macao Greater Bay Area projects.

Check out the full transcript of TVB’s Straight Talk host Dr Eugene Chan’s interview with Vincent Lo:

Chan: Good evening and welcome to Straight Talk! I'm Eugene Chan, and we are honored to have with us Vincent Lo, the founder and chairman of the Shui On Group, which is focused on property and construction across the Chinese mainland, Hong Kong and Macao. As a man who made Xintiandi, he has had a transformative impact on China's urban landscape. He has received numerous accolades, including the Grand Bauhinia medal in 2017. He was also awarded honors by the French government, and given a Lifetime Achievement Award at the 2012 World Chinese Economic Forum. He has held many key roles, such as the chairman of the Hong Kong Trade Development Council, Hong Kong Airport Authority, and was a member of the National Committee of the Chinese People’s Political Consultative Conference over two decades. So, this evening, we have asked him to share with us why he thinks Hong Kong is not just another Chinese city. Welcome, Vincent!

Lo: Thank you, Eugene, for inviting me.

Chan: Vincent. I mean you have been … I would use the word, you’ve been a very prominent figure in the Hong Kong business community for decades. Can you briefly share your experience, in particular being … you were the chairman of the Trade Development Council, how you have seen the business or landscape evolving between Hong Kong and the mainland over the last decades?

Lo: I think the main changes have been in Hong Kong the past few decades, especially before the handover, Hong Kong was very politicized. And even after the handover, I think there was a lot of debate on, okay, “one country, two systems”. I think a lot of people don't really understand what “one country, two systems” is, until after a lot of disruptive demonstrations in Hong Kong that really made us realize that we are under one country. Of course, we want to put emphasis on our special status of two systems. But without one country, there cannot be two systems.

Chan: Right. Vincent, since you mentioned this, I understand that you were actively involved in the preparation of the handover, and you were, I mean, you know exactly what went on in those negotiations or discussions. Has this ever been anticipated that we have to go through such a big turmoil to arrive at what we have today?

Lo: I don't believe so. I think no one would expect Hong Kong to have become so politicized and so confrontational. And especially during the 2019 demonstration, there was such aggressive behavior by some of the Hong Kong young people. But of course, now we know there's a lot of outside forces encouraging them, organizing them. But still, Hong Kong has to go through that phase until now, then we realize that, okay, we have to make sure that the security for Hong Kong and for the mainland must be preserved.

Chan: Vincent, since you were doing business all these years, how would you compare doing business with the mainland, which Hong Kong is … it’s a big part of Hong Kong's business community. How will you compare nowadays, as compared to the colonial times, as we so-called? Is it easier, or is it more difficult now?

Lo: I think it's easier now to work in the mainland, because first of all, after 40 years of opening up and reform, China has become much more knowledgeable in dealing with businesses. And in the earlier days, when I first went in, in the mid-’80s, I think they really didn't understand what the commercial arrangements would be, but they have made a lot of progress. They have learned, and actually they have moved ahead, in many ways, even ahead of Hong Kong, like look at Shenzhen. It's now much, much bigger than Hong Kong as an economy. And, in the earlier days of Shenzhen, a lot of Hong Kong business people, including myself, were not confident that Shenzhen would become an important city. So, I think things have changed, and we have to reposition ourselves vis-a-vis doing business in China and also how we deal with the outside world.

Chan: Vincent, since you mentioned that if our motherland has improved and also has matured, understand what the world is all about. Does that make Hong Kong a lesser role to play, in that case?

Lo: No, more so because right now, for example, the US and its close allies are all trying to contain China's growth. And so Hong Kong as a special administrative region, we have a special sort of angle to handle this situation because I don't believe multinational corporations can ignore the China market, 1.4 billion consumers and also increasing their wealth. So, Hong Kong will continue to have a very big role. And we have the common law system, right? Basically around the world, when you deal in business, the common law is what people would use when writing their contracts. So, I think Hong Kong will continue to have a big role. But I think we mustn't be just a gateway. We have to be a value creator.

Chan: Vincent, since you mentioned that, I mean, Hong Kong must act as an international gateway, more than a gateway to the mainland, but with the current geopolitical tensions that is, we can see there are a lot of policies, even targeting against Hong Kong, which never happened before. So, how can we maintain ourselves as a global financial center, and what will be our economic prospects? And how do we position ourselves in such a chaotic environment, if I may use that term?

Lo: Well, in my 50 years of business life, I've never seen the world so divided, so confrontational, because it's actually transitioning from a unipolar world to a multipolar world, and also with the geopolitics on, for example, wanting derisking and decoupling from China. It's not going to be that easy. And then, of course, in the past decades, we've been very focused on the US and European markets. But now I think we need to look at other developing regions like the ASEAN, like the Belt and Road countries. And Hong Kong actually still has very good prospects, for example, as a medical center, also education center, and then wealth management.

Chan: Right.

Lo: Wealth management right now, under our management, is $4,000 billion. It's very substantial, and we could easily become the biggest wealth management center in the world, right?

Chan: Vincent, since you’ve just mentioned the … in terms of wealth and all that, we saw that there's some recent fiscal stimulus from the central government, and we saw that the Hong Kong stock market has soared for the last couple of weeks. And are we back to the road of recovery?

Lo: I am not sure we are already back on the road to recovery, because I think there are a lot of structural issues that the mainland and Hong Kong will have to deal with. Like I was saying, the world has changed so much, so how do we reposition ourselves in order that we can move ahead? I'm still bullish on Hong Kong because of the Greater Bay Area, the Belt and Road initiative, and then the three centers that I was talking about. So, there's a lot that Hong Kong can still do, but we cannot just copy what we have been successful with in the past decades.

Chan: Vincent, since you mentioned the Greater Bay Area, I mean, let's link to our title of the show today is, ‘Why will Hong Kong never be just another Chinese city?’ So, we must analyze it. I mean, empirically, rather than just making a statement, how are we different from the other nine GBA cities in terms of business environment, legal framework and international appeal? Do we still have a niche?

Lo: Yes, definitely. I'm very bullish on the Greater Bay Area. It's 56,000 square kilometers, 86 million people, and this is a unique region in the world in terms of technology, manufacturing capabilities, international finance center with Hong Kong, and then tourism, history, good food. You have everything in this region, and we can play a very, very major role in the future development of the Greater Bay Area. And we have to really coordinate our efforts on how we work with the nine cities because they are all at different stages of development. So, for example, how to work on the technology side with Shenzhen and how do we work with Dongguan on manufacturing?

Chan: Right? It's a very, very unusual region where you have so many critical resources all gathered together. Vincent, apart from these nine cities, I mean people from overseas, I will say the Western world always look at Shanghai, or even Shenzhen, as important cities that will be taking over from Hong Kong. Do you think that will happen eventually?

Lo: I don't think so. Because, for example, the common law system, it's only practicable in Hong Kong, and we will continue to have that edge, and also the central government is bending over backwards to try and continue to maintain Hong Kong’s special status. And in order that Hong Kong can contribute to China's development, Hong Kong must be different from Chinese cities.

Chan: Right, Vincent. Let's take a break now and viewers, stay with us. We will be right back.

Chan: Thank you for staying with us. We have the privilege of having Vincent Lo to share why he thinks Hong Kong is not just another Chinese city. So, Vincent, in the first half, you are very bullish about Hong Kong, especially with the GBA, and you mentioned about ‘one country, two systems’. Let's touch on that topic before we move on further to GBA and the Belt and Road initiative. How would you say that after 27 years, how did this past experience of ‘one country, two systems’ compare to where we are today? And are we in a better position? Because, as our title suggests, a lot of people say Hong Kong is just another Chinese city. So, that is the reason we invite you because you were there to start the preparation, you have seen it happen, and you are still very sharp in everything. What would you say to that?

Lo: I think when we first heard of the ‘one country, two systems’ in the ’80s, I think nobody really understood what it meant, how it can be practiced. And even after the handover, there was too much emphasis on ‘two systems’ instead of ‘one country’. So, after all the disruptions, all the demonstrations, I think we start to realize that we need to honor that ‘one country’. We are part of China, we cannot be away from China. And even from the economic point of view, if we don't have the backing of the Chinese mainland, how is Hong Kong going to maintain even its economy? So, I think ‘one country, two systems’, we have gone through the learning process, and now I think it's much better understood and practiced, as a special administrative region.

Chan: However, when you say that … but what we are suffering right now … I will use your word ‘suffering’ because we used to be a very good middle person between the mainland and the Western world. And now because of the geopolitics we talked about earlier, Hong Kong is being “Okay, you are now part of China, so we treat you exactly same”. They are looking at closing our economic trade offices in the US. That never happened before. So, how can Hong Kong be in a better position while we are being treated no different than before? I mean how will that help us?

Lo: We have to learn to reposition ourselves so that we can create value under the current circumstances. Like, for example, in the Belt and Road Initiative, Hong Kong can easily become the resource allocation center for the Belt and Road projects. Since the establishment of the Belt and Road in 2013, China has been the main investors into the Belt and Road countries and projects, and China has invested, if I remember correctly, $439 billion and also over $600 billion in construction contracts. But the IM… not IMF, I am sorry, it is the ADB, Asian Development Bank, they estimated, from the year 2016 to 2030, 25 Asian countries, on infrastructure alone, the requirement is $439 billion per annum. So, what China has invested is just a drop in the ocean, and this is just for Asian countries. We are not talking about the other 100 odd countries that have signed onto the Belt and Road. So, we would need resources from all over the world to continue to make the Belt and Road’ projects successful. And Hong Kong can play that very special role. We cannot just raise funds, we need to also allocate all the necessary resources to go and do these projects successfully.

Chan: Right.

Lo: And Hong Kong can also, because with our expertise and experience, we can identify the economically viable projects, bankable projects, and take the lead to organize them so that these projects will come to fruition that will benefit the local community as well as the investors.

Chan: Right. Vincent, since you mentioned the ‘One Belt, One Road’ initiative, but, however, I think I have heard from many friends in the community that they felt that it is too far away from us. I mean the GBA is already somewhere that we have to explore, and that is further away. So, how can we entice Hong Kong people to follow what you said? Because GBA, we are just starting, we are looking at the ASEAN countries, and there is only 24 hours in a day. How can we even spread our resources even to further away?

Lo: No, I think we … like I was emphasizing, we need to reposition ourselves. So, we cannot just use the old ways of doing business. The world has changed and is changing at a very rapid pace. So, what we need to do is really address the issues of how are we going to prosper in the future. How are businesses going to make money in the future? So, you just have to go with that thought, then I think you will allocate the time to do what you need to do.

Chan: Right. Vincent, with your experience in the construction industry, can you elaborate Hong Kong can assist, I will use the word ‘assist’, mainland enterprises to establish standards in this Belt and Road area and promote them within the countries?

Lo: Hong Kong, of course, we have always just used the British standard. But now I think we need to really look at the world and say, “Okay, in this multipolar world, how do we establish a standard that will be acceptable and practicable by different countries?” right? Even railway tracks, how do you link them? The different standards will require different things. So, Hong Kong, I think with our very vast experience, we can work on these and take the lead. And because our services, professional services, is very, very strong, it's probably the best in the world. So, all these, I think we can work on. And it will create new businesses for Hong Kong.

Chan: And how does being, I mean, Hong Kong being the largest offshore RMB center enables us to sort of connect with these Belt and Road countries?

Lo: Well, of course, we hope that investment can be made with RMB, but at the same time, we can invest with US dollar, and English pounds, or Euros. That's what Hong Kong is good at. And that's the special status that we can continue to exploit, not just for ourselves, also for the Chinese mainland, and the world.

Chan: Right. So, Vincent, let me go back to the GBA initiative that, I mean, that we talked about earlier. How, with increasing integration of Hong Kong and the GBA, how do you see Hong Kong preserve our, I will use the word, ‘distinctiveness’, while aligning with our country's broader economic goals? Because Hong Kong is moving, even according to some Hong Kong people, we are moving to more mainland operating mode in that sense. I mean on Straight Talk, we talk about everything. So, how do you see that? How do we maintain our distinctiveness because we don’t want to lose it? That is our niche, isn’t it?

Lo: No, I will give you an example. Like doing the Xintiandi, I have put forward the concept and ideas to the municipal government, and they liked what I was proposing to them. So, they asked me to do the development. So, Hong Kong will continue to be able to play that role, as long as we are staying ahead of the game.

Chan: Right.

Lo: And that's what Hong Kong is good at. We have been, for example, through city development, if we look at Hong Kong, in the past over 1.5 centuries, we have developed from a small fishing village to an international finance center. So, we know the progress, the process, of how we can upgrade ourselves.

Chan: Right. Vincent, since you are a person with deep ties in both Hong Kong and the mainland, do you see any business or sort of business sector that will have the most growth potential for Hong Kong in the foreseeable future, with the GBA and even the Belt and Road?

Lo: Basically in all sectors, for example, finance, right? All these investments, all these projects, will require financing. And Hong Kong, as an international finance center, we can play a big role. And then the professional services. We are very, very good at that, we have maintained our standards, and so we continue to lead the way, right? To provide the support to make sure that the deals are done properly, handled properly.

Chan: Right. Vincent, I am going to ask you the last two areas that I am sure the viewers will be very interested to know your views about. It has been often cited internationally: Hong Kong is no longer an international city like before. And we had Kishore Mahbubani on the show recently, when he said that we must have our priorities, that there is a delicate balance between Beijing's influence and Hong Kong's autonomy. We must convince the world that we have got this balance right. Do you agree?

Lo: I agree, I totally agree. And actually I don't believe Beijing wants to interfere in Hong Kong’s affairs. Beijing has got enough on its plate right now, particularly with the not-so-lively economy. And, so, I think it is up to us in Hong Kong, what we do with our special status.

Chan: Right.

Lo: How we would exploit our strengths to make it a better place for our future?

Chan: Right. One brief answer from you: CE’s Policy Address will be out very soon. What will be your wish list?

Lo: I think the Policy Address should look at how we can revive the Hong Kong economy. Not by focusing on the night economy, I think we need to look at the bigger picture. How do we position ourselves? And also how do we work better with the GBA? And how do we work on the Belt and Road projects?

Chan: Thank you, thank you, Vincent, for reassuring us of Hong Kong’s unique status and sharing with us why we are not just another Chinese city but a super-connector and super value adder under ‘one country, two systems’. Thank you for joining us and have a good evening!