For those concerned about the future of Hong Kong — and his friend, Jack Ma — Joe Tsai has some reassuring words.
In an interview with CNBC on Tuesday, the Alibaba (BABA) co-founder addressed both issues separately.
Despite the pandemic, the economic downturn, and geopolitical tensions, he predicted that “Hong Kong will be fine.”
“Everything has now stabilized since they instituted the national security law,” Tsai said, referring to a contentious measure enacted in the city last year after months of historic mass protests. The law outlawed anti-Beijing sedition, secession, and subversion, while allowing Chinese state security to operate on the territory.
Hundreds of opposition activists have been arrested since then, schools have been ordered to remove controversial books from their curricula, and authorities have largely limited mass protests.
Tsai, a billionaire businessman who has a home in Hong Kong, opened up about his experience during the crisis, saying that “in 2019, when people were protesting on the streets, I was actually afraid to walk onto the street.”
Tsai, who grew up in Taiwan, added, “I actually felt physically threatened by… these protesters.”
Tsai now claims that, despite its setbacks, Hong Kong retains a number of competitive advantages as a global business hub, including a low income tax rate and open markets.
He explained, “It’s a free market economy.” “You deposit money in the Hong Kong Stock Exchange today… in Hong Kong dollars, and you can withdraw it in US dollars tomorrow. The flow of capital is unrestricted.”
Hong Kong has long been regarded as an important crossroads for trade between East and West. Even after the city was handed over from Britain to China in 1997, it managed to keep its image for decades, thanks to Beijing’s promise to keep its semi-autonomous status for 50 years after the handover.
But, according to the American Chamber of Commerce in Hong Kong, its status as an international gateway has recently been questioned, with “an unprecedented number of expatriates leaving or planning to leave the city over the past few years.”
The city was kicked off an index of economic freedom that it used to lead earlier this year, further damaging its reputation.
Officials in Hong Kong slammed the move at the time, claiming that it was “neither warranted nor justified.”
Despite securing and making available millions of vaccines for free public use, Hong Kong has had difficulties with its vaccination campaign. According to official data, 26.3 percent of the city’s total population has received their first vaccine dose, compared to 52.6 percent of the US population. For many months, strict quarantine measures in the former British colony have made international travel nearly impossible.
Tsai also provided an update on his business partner, fellow Alibaba co-founder Jack Ma, who has been largely out of the public eye since getting into trouble with regulators last year.
Last year, Ma enraged Beijing by accusing the government of stifling innovation and criticizing China’s banks for having a “pawn shop” mentality.
Since then, Chinese regulators have launched an unprecedented crackdown on technology companies, including Alibaba.
When asked about the situation, Tsai said Ma was “lying low right now” while pursuing new interests like painting.
“I talk to him every day … he’s actually doing very, very well,” he said. “I think you have to separate what’s happening to Jack and what’s happening to our business.”