The Li Ka-shing family's CK Hutchison group, once called the "invisible hand that moved Hong Kong," has begun slimming down by selling or listing core asset one after another. The group, which spanned ports, telecoms, and retail worldwide and served as the capillaries of Hong Kong's economy, put forward the banner of a "management strategy to raise corporations value." But some analysts said the moves also reflect the powerful geopolitical waves of U.S.-China tensions and the urgent task of a generational transition.
On the 24th, according to Bloomberg and other foreign media including the South China Morning Post (SCMP), CK Hutchison began talks to sell 43 global port asset for $19 billion (about 28.12 trillion won) in cash. The size of the sale accounts for most of the group's overall global portfolio. At the same time, the group plans to secure at least $2 billion (about 2.96 trillion won) more by dual-listing the retail institutional sector Watsons (AS Watson) in Hong Kong and on the London Stock Exchange. Foreign media said, "A vast empire that moved Hong Kong stands at a turning point, abandoning an operations-centered business structure and reshaping itself into an investment specialist corporations."
In the past in Hong Kong, the name Li Ka-shing virtually meant the daily life of Hong Kong residents. When people woke up and turned on the lights in the morning, a power plant owned by Li supplied the electricity. When they stepped out of their homes, they passed an apartment complex he built. For lunch, they carried daily necessities bought at Watsons and ate food made from ingredients brought in through Hutchison ports. Hutchison Whampoa built by Li Ka-shing was more than a simple corporations group; it was a vast infrastructure that operated the city of Hong Kong.
But in 1997, with Hong Kong's handover, Li Ka-shing began a revamp. He foresaw the political volatility that would arise once Hong Kong's sovereignty moved under China. So while keeping Hutchison Whampoa's headquarters in Hong Kong, he quickly shifted the business center of gravity to Europe and the West. Li subsequently poured massive capital into the U.K. telecom market and European port infrastructure. In 2015, he split Hutchison Whampoa into CK Hutchison, the non-real estate institutional sector, and CK Asset, the real estate institutional sector, refining the group's governance. At the time, Hong Kong capital was welcomed in the Western world as safe and neutral asset linking China and the West.
In recent years, the situation has flipped completely. As U.S.-China tensions intensified, the Western view of Hong Kong corporations shifted rapidly from neutral capital to Chinese capital. The U.S. Trump administration pressed China throughout the year, tagging Hong Kong corporations with a pro-China frame that was tantamount to a death sentence. To do business overseas in North America and Europe, they must prove they are not Chinese corporations, but based in Hong Kong, proving that has become virtually impossible. Analysts widely say the pressure Hutchison faces is reaching its limit, especially in ports and telecoms, which are directly tied to national security.
Bloomberg, citing sources, reported that "as Hutchison Group proceeded to sell port asset near the Panama Canal and U.S. investment firm BlackRock showed interest in an acquisition, the Chinese government openly expressed discomfort." In the end, Hutchison was compelled to add China's state-owned corporations COSCO to the pool of sale negotiators. Western countries are wary, on security grounds, of Hong Kong corporations like Hutchison operating ports, while the Chinese government seeks to avoid handing over asset already secured by its own corporations to the West.
The 43 ports now on the block are core asset in the global logistics network that Hutchison has painstakingly built over decades. Bundling and selling them outright signals it will no longer cling to its identity as an operator. Instead, it suggests the group will secure cash and reinvest in areas with lower geopolitical risk or focus on defending asset.
The push to list the retail institutional sector Watsons (Watsons) is along the same lines. Watsons operates more than 17,000 stores across 31 markets worldwide. It is the star business unit responsible for 41% of the group's revenue. Yet the Li family has decided to put equity in this core business on the market and pocket cash. Experts called this a "tidying up of the empire."
The Li family has gradually adjusted the share of CK Hutchison equity, which has higher operating risk, while steadily increasing CK Asset equity, which holds relatively stable real estate asset, to 49%. This is evidence of a shift away from directly running businesses and getting entangled in regulatory and political controversies, toward a structure of holding real asset like real estate to earn rental revenue and capital gains.
Vincent Lam, chief investment officer (CIO) at Hong Kong-based asset manager VL Asset Management, said, "For the Li family, the most important thing now is not expanding business but safely preserving the vast wealth built over decades," and noted, "In the midst of geopolitical waves, cashing out asset to secure liquidity is the best defense."