A question of economics

When news emerged last week that Hong Kong’s billionaire brothers Ronnie and Gerald Chan had given US$350 million (Bt11.3 billion) to Harvard University – the biggest donation in the US institution’s 378-year history – debate broke out on Chinese social media.

Some netizens excoriated them, with one asking on Weibo: “Why didn’t you give the money to our own universities, you traitors?”

Others said China’s institutions had to be more transparent about their finances. One netizen pointed out:  “If we donate to Chinese universities, how much money will be used for education? When Chinese universities’ management standards reach those of Harvard, there will be people willing to donate.”

Swirling debates and controversy have never been far from the plain- speaking property tycoon Ronnie, 64, and to a lesser extent, his brother Gerald, 63.

The scions of the late Chan Tseng Hsi, who founded the Hang Lung Group in 1960, they are valued at about US$3 billion and rank 17th on Forbes’ “Hong Kong’s 50 Richest” list.

The older Chan is the chairman of Hang Lung, a major developer in Hong Kong. His younger brother, who has a master’s degree in medical radiological physics and a doctorate in radiobiology from Harvard’s School of Public Health, lives part-time in the US.

The brothers also invest in more than 40 life sciences companies through their Morningside Group business. It is through its foundation that they made their donation, with the School of Public Health to be renamed in honour of their father.

This will make it the second school at Harvard, after the John F. Kennedy School of Government, to be named after an individual.

In a speech at Harvard, Dr Gerald Chan said the donation was inspired by his mother’s volunteer work in China in the 1950s. A nurse, she would vaccinate neighbourhood children in the family kitchen, using the same needle by disinfecting it in boiling water. “As you can imagine, the needle was blunted by repeated use so the injections got extraordinarily painful... It was no wonder many children screamed and wailed in our kitchen.”

The other inspiration was his father who helped many friends finance their children’s education overseas, he said.

Decades after leaving Harvard, Chan retains ties with his alma mater, serving on the school’s board of dean’s advisers. He also drew attention this year buying more than US$100 million of property in Harvard Square, said campus newspaper The Harvard Crimson. Rents rose and many long-time businesses there chose to or were forced to close.

In Hong Kong, it is Ronnie Chan who is more prominent. Known as a shrewd developer and active figure in politics, he took over Hang Lung from their uncle in 1991. The following year, it made its first mainland foray.

A gung-ho attitude coupled with conservative instincts at the right moment served Hang Lung well. It would quietly acquire sites during downturns and sit on unsold units until property prices went up again.

Chan’s Chairman’s Letters in the company’s annual reports stand out for their unusual frankness and critiques of rivals’ strategies, such as when one developer bought a plot in western China at a unit price 20 times more than what he had paid a year earlier.

Last year, he lashed out at the Tianjin government for the nine years it took for his mall Tianjin Riverside 66 to be completed.

“Neither size nor construction complexity could be used as an excuse for Tianjin to be so slow,” he wrote pointedly. “There could only be one explanation – the complicated and prolonged procedures in seeking various approvals from the municipal government.”

In 2004, he helped set up a public policy group, the Hong Kong Development Forum, marking the first time big business formally entered the political scene. He became one of the core backers of Hong Kong Chief Executive Leung Chun Ying when most other tycoons threw their weight behind Leung’s rival Henry Tang.

In a recent interview, Chan said Mr Leung is dealing with the mess left by his predecessor and “has played quite well, given the rubbish cards dealt to him”. He has also made no bones of his conservative stance on issues such as Hong Kong’s constitutional reform, saying that “democracy is not rational”.

Outside of Hong Kong, his influential friends include Singapore’s first prime minister Lee Kuan Yew with whom, said Chan in a 2012 interview, he exchanges letters regularly.

But perhaps the most maverick aspect of this tycoon is his public stance on not leaving an inheritance to his two sons. (One works at Hang Lung while the other is an occupational therapy academic in the US.) Asked once how he could avoid leaving his estate in disarray, Chan replied: “It’s very simple. Don’t leave anything to your children. This will avoid disagreements.”