Letters | What ‘old money’ can learn from ‘new money’– and how Hong Kong can help
- Readers compare the attitude of business families in the Global North and Global South, the next industrial revolution, and China’s electric vehicle makers
One of the more useful anecdotes in E.M. Forster’s A Room With A View involves whether it would be better to rent to a family rising up from humble beginnings or a family of noble background that has fallen on difficult times.
As economic, social and legal environments change, different traits will present greater fitness. The “innerworldly asceticism” of Max Weber’s Protestant ethic, which is often associated with successful entrepreneurs in the Global North, has found its counterpart in a Confucian ethic and a Catholic ethic that don’t retreat from the world but focus on change, progress and overcoming.
With that in mind, one might ask whether what is colloquially known as “old money” – the business families of Japan, North America and Europe that rose during the 1900s – has anything to learn from the “new rich” of the developing world.
In my experience of working with family businesses from both the Global North and the Global South, I would summarise the differences as relating to blood, government and frontiers.
One of the starkest differentiating factors is openness to legacy-building along bloodlines. Old money families, however eager to send offspring to certain educational institutions, are not keen to bestow unearned riches upon their children.
The new rich of the Global South tend not to have such qualms. Privileges are to be passed down without reticence in the same vein as the royals of 1700s and 1800s Europe. While that can be problematic, it also points to opportunities old money is missing.
Who better to run the family business than someone trained from early childhood for the job by the most competent person there is for that role, namely the CEO, who passes on his or her informal knowledge as well as personal connections? And if the best person for the job happens to be part of the family, why hold it against them?
Second, government. For perhaps the same reasons that nepotism is looked down upon in the Global North, so are government connections. School ties, university friendships and family linkages are important but not flaunted to meet standards of propriety.
In the Global South, not only are government contracts openly sought but government linkages, political connections and other advantages are sought as simply “business”. Old money might wish to take a leaf out of new money’s book and fight without the white gloves. This is not an invitation to corruption or the like, but a plea for treating all business opportunities seriously.
Third, frontiers. New money tends to aggressively seek new markets. Businesses in the Global South are simply used to dealing with the issues faced in frontier markets. It is understood that demand will be met one way or another – and one’s personal feelings about it will not make a difference.
Hong Kong, being a hub for both old and new money, can be the place where brainstorming on how old money can reinvent its approach takes place.
Radu Magdin, former adviser to the prime ministers of Romania and Moldova
Next revolution to shape world may take place in Asia
It was the industrial revolution in the 18th and early 19th centuries which powered Western imperialism by providing economic and military might. Ultimately, the East caught up. China, which became the world’s factory, is the best example. It has exported its way out of poverty to become the world’s second-largest economy. But it took China almost 200 years to do so.
After the industrial revolution, the next big revolution to shape the world order is in semiconductors and artificial intelligence. If China and other Asian countries succeed, then this revolution is likely to take place much faster, possibly in only a couple of decades. The possibility of China dominating semiconductors and AI is what causes the reigning superpower extreme anxiety, leading to the current geopolitical tensions, trade restrictions and even conflicts.
The tide may even have already turned in mobile technology, 6G and electric vehicles, and this is reflected in the declining market capitalisation of major companies like Apple and Tesla.
Sutinder Bindra, Discovery Bay
Look to Book of Changes for insight into EV market
The founders of BYD and Xiaomi seem to be living by the first hexagram, Qian, in the Book of Changes. Initially, like the first unbroken line of the Qian hexagram that represents a hidden dragon, they both hid their ambition to be industry leaders and focused on making innovative and groundbreaking electric car models, pouring time, energy and resources in that direction. Gradually, they will rise and defeat their foreign competitor, doing their bit to achieve the Chinese dream.
Fung Zhan Hong, Ho Man Tin
