By: Our Correspondent

Symbolism matters, perhaps more in China than elsewhere. So what message
was China's President Hu Jintao sending when he gave Hong Kong's
richest man, Li Ka-shing, an extraordinarily privileged role at a
ceremony to mark the 30th anniversary of the Shenzhen Special Economic
Zone, whose growth from paddy fields across the border from Hong Kong to
a population of 12 million is symbol of China's transformation from Mao
to modernity?

Li, 81, had a high-profile one on one meeting
with the president and spoke at the September 6 ceremony at which Hong
Kong chief executive Donald Tsang and other dignitaries were merely
observers.

It matters because there are different ways of viewing
Li and the significance to China of this man, who currently ranks
second among Asians in the Forbes list of global billionaires. Hu
singled him out for his contribution to Shenzhen's extraordinary growth
and to China's modernization. But although Li's companies have big
investments on the mainland, including Shenzhen, he was never in the
forefront of the push into China.

Nor does he have any
significant interest in export manufacturing, the business which for two
decades made Shenzhen the spearhead of China's growth. For that, Hu
would need to thank hundreds if not thousands of manufacturers and
traders from Hong Kong and Taiwan – and scores of foreign companies such
as Walmart as well.

Maybe Hu was simply signaling his respect
for a successful Chinese businessman whose empire of power stations,
ports, telecommunications and oil as well as real estate spans the
globe. But Li's world scope could equally well be a reminder that much
of it has been paid for from the quite extraordinary profits which have
been available to a privileged few property developers in Hong Kong –
three of them in the Forbes top 50 global billionaires – and from a
power monopoly and port and retailing dominance in a territory with no
competition or anti-trust legislation. Profits have often been
reinvested in lower-yielding but safe infrastructure sectors in
developed countries such as Australia and the UK where he recently made a
US$9 billion offer for a power distributor.

Li's primary skill
has been not as an innovator or pioneer but as an asset trader, always
willing to buy or sell a business at the right price and right time.
This is a valuable skill which has rewarded investors in his companies.
He is also an active trader in his own companies' shares. But such
talents are not what Chinese leaders usually think the nation needs as
it seeks to build national champions in technologically advanced
sectors.

Mr Hu could have been sending signal to the Hong Kong
business elite that Beijing admires them, wants them to oppose
democratization in Hong Kong and help speed up interaction with the
mainland. But that is so obvious that it scarcely needs emphasizing.
Indeed it could now be counterproductive in Hong Kong where Li and
fellow property tycoons are no longer quite the admired symbols of
achievement that they once were.

For sure, Mr Li is the most
respected as well as richest and his successful diversification widely
admired. But the shine has gone off as the tycoons have been seen to
influence a weak Hong Kong government into reenforcing their dominance
of a property market which is at the root of an ever-widening wealth
gap. Beijing's identification with the Hong Kong tycoons suggests it
believes that to get rich is glorious regardless of the social
consequences of oligopolies enjoying cosy relations with officials.

The
praise of mega rich developers points to a dilemma that Hu and his
colleagues now face on the mainland. The government has taken some steps
to dampen land speculation and promised a crackdown on land hoarding.
But in China real estate billionaires are being created at a fast pace
not just because the economy is growing but because those with access to
bank finance can speculate freely – and walk away if their bets fail.
Local party chiefs may have little more interests in seeing prices
decline to levels which would improve affordability for ordinary
households than the tight group of Hong Kong developers who supplies 90
percent of Hong Kong's new housing and hoards huge land banks which
enable it to maximize profits by limiting production.

So if
there is an overall message from Hu it is that capitalism with Chinese
communist characteristics prefers fat profit margins cushioned by good
relations with government to vigorous competition.