17 March 2016
Redeveloping Guangdong’s “Siberia”
The Nansha New Area in the Chinese mainland is one of three development zones that form the Guangdong Free Trade Zone. Positioned to become the province’s main gateway for ocean-going trade, Nansha also has the potential to become a cross-border e-commerce hub for SMEs, according to Kenneth Fok, Vice-President of the Fok Ying Tung Group. The Hong Kong-based conglomerate, in October, launched a new commercial and tech R&D development in the area, the latest in a series of company investments there since the1990s.
Why did your company choose to invest in Nansha?
Nansha is located at the heart of the Pearl River Delta, having Guangzhou, Hong Kong and Macau within its 100-kilometre radius. It is my ancestral hometown and this adds to our passion and vision of what this place can be. Nansha has officially become a Free Trade Zone and a state-level district, making it a prime property of China.
The area we are responsible for has a land mass of more than 22 square kilometres. The entire zone is projected to have 2.5 million people by 2030.
Our ties with Nansha date back to my grandfather [the late business tycoon Henry Fok]. He first visited the area in the mid-1980s and fell in love with it. Known as the Siberia of the South, Nansha was home to many highly polluting industries because it is furthest away from the city of Guangzhou. But my grandfather saw the potential of this place, knowing that people would eventually move out of cities they worked in to enjoy a better lifestyle.
How do you plan to proceed with the Nansha development?
We have invested in several projects, including an IT park, an international college, a golf club, a yacht club, a coastal park, a five-star hotel, along with commercial and residential buildings. Consumption has largely been on travel and entertainment, so we tried to incorporate more green space and health facilities into our development plan.
The spending pattern of the Chinese youth is changing. It used to be the case that after getting a car or house, you’d get married and be set for life. Today, people don’t just buy houses; they pursue a way of living. We must build a city that encapsulates the taste and habits of young Chinese consumers.
What are some of the challenges?
Goal alignment between us and the mainland government is challenging because it has its own master plan, and we have our own. A new leadership may have a different goal so the key is to communicate with them on the best interests for Nansha.
It’s also about adhering to my grandfather’s vision, and yet being nimble enough to adapt to changes. We try to handle this by engaging with young employees in decision-making and being confident in delegating responsibilities.
In the 1990s, we did everything ourselves. As more specialised companies emerge, we form partnerships to bring in new talent. Family businesses tend to be more risk averse, so how can we make use of the capital market by taking in more debt to speed up the development process?
As Honorary Deputy Secretary-General of the Sports Federation and Olympic Committee of Hong Kong, what are your thoughts on the potential of the mainland’s nascent sports industry market?
Premier Li Keqiang last year introduced an initiative to stimulate the sporting industry by encouraging consumption and participation. The world’s sports industry last year totaled US$800 billion, of which one-third goes to sponsorships, a third goes to media, and a third goes to products and sales. While the United States has the biggest market share, the Chinese market only takes up US$50 billion, leaving a lot of potential for growth.
When it comes to sports, it’s not just about brand names, like Nike and Adidas. It also involves talent management, sports clubs, medicine R&D, event services, tourism and education. These are still infant markets in China. As the news about the paper (on Premier Li’s initiative under the 13th Five-Year Plan) came out, we see big players such as LeTV and Wanda rushing in with ambitious plans.
Hong Kong’s youth who are keen to enter the sports industry should jump on the bandwagon and capture the mainland’s huge market potential. We should leverage the strength of Hong Kong as an international city, and help connect China with the world.