Expanding networks and minds
Dr Peter Wong, Chairman, The Hongkong and Shanghai Banking Corporation, and Chairman, the College International Advisory Board (CIAB), talks about the role of networking, internationalisation, diversity, innovation, and the qualities he looks for in potential employees.
Interview by Eric Collins
EC: How important is international experience for our students in Hong Kong?
PW: It’s great if you can travel around and go to different places. But in the absence of that when you're in a university environment, what do you do? How do you get the international knowledge? So, in the university, first of all we must have diversity, inclusion. Different races of people from different parts of the world. Try to understand them, try to understand their culture, be able to connect with them. How do they do business in their countries? Also, you really do have to read international newspapers. For example, today there is conflict between Russia and Ukraine. Well, how does that impact the world? You can say it will increase oil prices, then it will impact inflation. Then it will impact interest rates. When interest rates go up what will that impact? People not investing, and then it will impact different currencies, some stronger, some weaker. If interest rates go up in the United States what does it mean for the Australian dollar, what does it mean for the pound? And if the foreign exchange rate goes down, what does it mean for trade? So, you've got to be able to connect very quickly around the world when something happens. And without reading the international news, you won't be able to connect the dots.
“Without reading the international news, you won't be able to connect the dots”
Networking and collegiate culture
EC: Is still important in this day and age?
PW: The connectivity between students in forming a network is very important. Today when I look at my customers, many of them are already well connected with each other because they went to the same school or universities overseas, and then they come back and have a network. It's not like excellent academic achievement achieves success. You need a lot of connections. Because in the world as we see it today nobody knows everything. You need to be able to have information. The information flow, because of technology is so is so quick and then the development in different areas, be it in pharmaceuticals, in technology itself, or even in agriculture. What does it mean by technology influencing different fields? Technology and artificial intelligence are general terms that can be applied to anything. It can be applied to construction, to medical, to linguistics. It can apply to any field that you can name. So how do those things come together? When you have friends in different industries you can talk to them and say, OK, how does technology affect your field?
EC: Technology is that generic these days.
PW: And the vocabulary in the general conversation with the customers has changed. Previously it would just be like, oh, yeah, how much are you exporting? Now, it's getting to how does technology affect my work? And how does ESG affect my work? Because I need to go to o let's say by 2050. So how can I prepare myself for that?
Making ESG operational
EC: Do you see it as a positive development that there's a sort of consensus around matters such as ESG?
PW: I think that there is a consensus around it, and right now a lot of people are talking about it at a very high level. But how does it impact the customers at the operating level? I've talked to a lot of customers and many of them don't understand the word net zero. How do they get their manufacturing facilities from where they are now to net zero? When I listen to my customers saying that I see three opportunities. The first one is that the banks can partner with companies that are very knowledgeable in that industry and start the target company on the journey to net zero. Then the second piece of the business is that once the target company gets the idea of how to do it, then they will invest. They'll buy equipment, they'll build infrastructure and so forth. And so the banks would come in and they can do fundraising for the company. And then the third piece is that along the way from where they are now to net zero, they have the opportunity for carbon credit trading. There's another big market for that. That market is being built right now, but it doesn't have any standards across the world. So, these are the things that are coming and students need to understand these trends. It is not enough just to study.
Banks as facilitators
EC: So banks have the wherewithal to actually make ESG functional.
PW Banks are an important medium to do that. But there are a lot of other factors that are involved. For example, the bank can say I don't want to lend to industries that are constantly polluting the environment. So that is a way of urging companies to become more climate friendly. But the knowledge is the key thing - how to do it. So when we talk about globally, the world of Cop 28 and so forth, the idea is there, but the most important thing is at the operating level.
EC: In that sense, the bank is potentially a gatekeeper.
PW: Yes, we can be a facilitator. We can be a gatekeeper. If the customers are willing to do it, we will be able to help.
EC: So that actually places banks in a slightly broader context than one would normally imagine. You can be a force for the good in financing along certain routes of development.
But we also need to see not just from the bank's point of view. Different parts of the world have different stages of development. Some parts of the world, in well developed countries, you can talk to them about ESG and they will immediately get it. But when you get to some other less developed countries, it's hard to say, well go and build a nuclear plant. Their generation of power is based on coal. It's hard for them to immediately change. They don't have the knowledge, they don't have the money. So, if you just say, oh, I'm not going to do any business with you, that's a very complex situation. You have got to understand the stages of development of different countries.
If you look at China, it's probably quite amazing to me that they are fastest in terms of solar energy, fastest in terms of wind farms. I've been there and seen them. The fastest in development of EV's. And if you just get across to Shenzhen, the development in the last ten years in terms of number of trees planted, in terms of the building codes and so forth, they've all changed very quickly. I think it's going to be quite interesting. The more developed countries will gradually pull the less developed countries along.
Hong Kong’s pivotal position
EC: Do you see Hong Kong still in a pivotal position for transmitting, not just finance, but ideas between East and West?
PW: Hong Kong, when I looked at the history, and I've been in banking for 42 years now, in those years I've gone through 12 crises. May it be pandemic. May it be caused by politics, or may it be economics. In 1981-82 the Hong Dollar was plunging, the interest rate was above 20% and a lot of people left. At the end of 1983, the Hong Kong dollar was pegged to the US dollar, and the Sino British Agreement was signed in 1984. And then in 1987 there was a stock crash in the US, and in 1991 a bank run in Hong Kong. 1997- 98 was the Asian financial crisis attacking the Hong Kong stock market, and from 1998 to 2002 the property market dropped by more than 60%. 2003 was SARS. And then 2008 was the Lehman crisis in the US, the subprime mortgages. 2009-2010 was the European debt crisis. And then we had the social unrest, COVID in Hong Kong, the economic situation wasn't doing well, the geopolitics and everything else.
EC: So, in a sense, nothing new.
PW: But every time Hong Kong bounced back very strongly. And if you look at the housing prices, between 2008 to 2016 prices probably went up three times. To a certain extent, I think this is the resilience of Hong Kong. The people of Hong Kong know how to navigate. But also Hong Kong’s success is very closely related to China’s success. If you look at the GDPs of China and Hong Kong, it's very much correlated. And in 2011, Hong Kong became the IPO center of the world, mostly because of China allowing the state-owned enterprises to come to Hong Kong to list. China and Hong Kong are very much integrated in that sense, but there's one thing that's very important and that is Hong Kong is an international city. Hong Kong can only be of value to China if Hong Kong is in the international space, bringing all the best products, services and practices to Hong Kong. And then China can use Hong Kong as a pilot or a gateway to understand the world.
EC: Do you think that is still true? I mean, a lot of has been talked about Shanghai.
PW: That is absolutely still true because it's in the DNA as an international city. When I talk about all the crises, this is a maturing process. People get used to markets going up and down. China still has a long way to go. They are coming up fast, but they have a long way to go and their currency is not convertible. So, China and Hong Kong have different roles to play. Shanghai can say that just doing the capital market, just to service China alone is already big enough. Hong Kong is a gateway. Because this is international common law that's in Hong Kong.
EC: Do you feel that young people today can have confidence that Hong Kong is going to retain that role as a gateway?
PW: That's the job of the university to make sure they understand that aspect. You're 18 years old or 20 years old. You're seeing all these uncertain situations around the world, chaotic in certain respects. You've got to explain to them, you got to help them to understand how to see through all of this. When people understand more, then they can navigate. If they don't understand, if they see a whole a bunch of problems ahead of them, they’re lost.
Getting to America
Dr Wong (top row, second from the right) as part of the Indiana Soccer Team, 1972
EC: I understand you didn’t come from a privileged background in Hong Kong, and you got to a leading university in the United States. Could you tell us a little bit about your experience of College in the US, how it became workable and maybe fun for you?
PW: I would say my father came to Hong Kong in 1948, basically without a penny. He was well-to-do in Shanghai, lost everything, came to Hong Kong and then started to build himself again in the garment industry. When I look at the way he budgeted for the family, the first thing is where we lived. Of course, then the food. And the third thing was always about education. So, he worked very hard to make sure that my brothers and sisters got a proper education. And at that time, I went to Canada when I was form 4 in Hong Kong.
EC: Why did you choose to study abroad?
PW: Because they wanted me to have an education, and to see the world. So, I thought that Canada was very appealing. And my father said, OK, you learn English because it's going to be important. It's an international language and you see the world. I was in a boarding school and what helped me the most was playing sports. I was recruited into the school football team. And that helped me a lot in terms of being collegiate with the teammates and then being in sports and representing the school. It's a big deal in the high school, people will recogni se you, be friendly with you and so forth. And so that helped me a lot in terms of integrating into a new culture, into a new community.
EC: So those kinds of soft skills were very significant for you?
PW: Yes, that's right. I was in Canada in Montreal for one year and then I went to the States, Indiana University. Again, I was recruited as a varsity player representing the school. Again, that was a big deal because sport in the US is very important. We got to travel around the country, play against competition and that helped me a lot in terms of integrating into a community, having a lot of friends just by being part of the team. It also helped me to understand the importance of being in the team. How they can help me to integrate into the university community, let's say even little things how to get to that hall for a class. You have people helping you. That's the collegiate part, not just in terms of academics, but in terms of friendship.
From collegiate to corporate
EC: So, if you like, the bottom line in education are your grades. And if we now talk about corporate culture, bottom line is how well you can deliver certain tasks. But is there a carryover from the collegiate thing?
PW: Yes, definitely. The carryover is how you collaborate. How you can manage a team in a company. In HSBC we have so many countries around the world. In Asia, we at present have 19 countries. How do you connect the businesses in those countries? You know, let's say if the CEO of one country doesn't talk to the CEO of another country, well, how can they connect with each other? They can't. So, you're going to have to make sure that the CEOs of each country connect with each other. Let’s say there’s trade going on between China and Vietnam. How do you capitali se on that trade corridor? There will be investment from China into Vietnam. So how do you make sure that you are helping the company to fund the investment, building facilities in Vietnam?
There are three types of flow in these ‘business corridors’: the trade flow, the investment flow and the private wealth flow. They may be private world flow between, let's say, China and UK, people going, students going out to UK to study. Students would need credit cards, they would need the place to stay. Parents would be sending them money for school fees 'and so on. So, these business corridors connect the two countries. So how do you capitali se on those?
EC: You see the bank as the vehicle for supporting something which is quite broad based and quite cultural?
PW: Exactly because if you don't have that mentality, you're always by yourself and you don't think about collaboration. If you want to be a leader, you must have a very open mind. About people, about business, about change. You can’t say, “that person is smarter than me and therefore I don't want him because one day he may want to take over by my position.” That's a very wrong concept.
Banking as a human endeavour
EC: So, communication is really the essence?
PW: Communication, collaboration, to make sure people talk to each other. But also, the important thing is that you yourself need to have a view about the world. You need to think about what is good for the company, not for yourself. If something is good for the company, then it's also good for the staff because as a leader you're not just accountable to the company, you're also accountable to the staff that work for you. You have to be very clear in that aspect because if a leader is not careful, your decisions may hurt the families of your staff. If you overbuild one day, you have to restructure, you have to reduce, you have to lay off staff. You lay off staff, you hurt the families. So, the accountability of a leader is not only to yourself, it’s also to the company and also to the company staff.
Dr Wong’s first visit to CityU as CIAB Chairman
EC: So banks can be the vehicle for communication between cultures?
PW: Absolutely and let's say the bank does well, it's also good for society. Because we have, for example, Hong Kong Bank Foundation where HSBC donates to society and we look at the areas where we want to focus, for example, the elderly during the COVID crisis. During the vaccination time, people were lining up in front of hospital really cold. And so we took on a project that says we will donate to vaccination, we will work with bank volunteers to help take calls and then we will have a few vans, and also for volunteers from doctors, nurses. So, when we get calls from certain places where the elderly need vaccination, we just go there. It was a very successful initiative to the point where the government would want to come in and help. Then the other focus that we have is the youth programme. My philosophy about youth is that we need to be active participators. It's not just about donating to scholarships, it's active participation. You know, for example we host the business case competition.
EC: Oh, yes, the College of Business competes every year.
PW: Well, we want to make sure that we can give to the society that we operate in. I taught for one full year in the United States as a lecturer in computer and business studies after my graduation. It was interesting to me when I taught the students, how do you convey things to them? How to get the interest up in a class? When the students do well, you're proud of it.
Creating common values
EC: Is the younger generation working as efficiently as you would like in a corporate setting?
PW: The younger generation today has access to a lot more information than we had in my day. I think the key challenge for them is to find out what information is true, what information is not true, and also, how do they utili se that information? There should be some proper value guidance behind that.
If you want to lead, you need the followers to see your values. You can't just say, well, I'm the leader, and I've got money. That's not good enough. You need to see the values behind. If you look at Bill Gates, there’s tons of money going into charity donations for certain causes. If people have a much bigger way of looking at the world, others will follow them.
HSBC-St John volunteering opportunity
“Different people from different cultures look at problems"
EC: So we're back to communication skills.
PW: It's about communication. It's about your values, about what you do. People will see it. If you're doing everything just for yourself, people see it too.
EC: Leadership again is actually about a collectivity, and it's about bringing people together culturally and creating common values?
PW: Creating common values, you’ve got to have a vision that they would like to follow. One of the things that computer science taught me is artificial intelligence. AI is always like from one state, you get more information, you become another state. And from that state, more information becomes another state. So, the key is what is the next state? Or what are the next 2-3-4 states? You’ve got to think ahead. You’ve got to look at the environment, geopolitically around the world, the finance market, the development of different countries and you say, OK, where should we be positioning ourselves? How should we position ourselves against this new environment in 2,3,4,5 years’ time? But that would be based on the fact that you understand and you go out and talk to different people, again the network, about where do they think things are going. University is a very good place for that because when you look at the various innovations in the universities, autonomous driving, pharmaceuticals, linguistics, and so forth, you get an idea of where things are going.
EC: Many of our graduates will be ambitious to join companies like HSBC. What qualities are you looking for in potential employees?
PW: I want them to be international. Hard working is a given. I want them to have an exploring mindset. It cannot just be Hong Kong. It's well beyond Hong Kong. They've got to be trained in terms of how they look at things in a very objective and not emotional way. Once you look at things objectively, you make much better judgment.
“University is a place where you can make mistakes and you'll be OK. You can explore anything you want”
Expanding minds
EC: You use two concepts there - training on the one side and exploring mindset on the other. Do you still see a place for the exploring mindset at university?
PW: Yes, of course. Absolutely. University is a place where you can make mistakes and you'll be OK. And that's where you can explore anything you want, as long as you have that mindset. When you're out of university, into the workplace at the beginning you can still make some mistakes, but as you continue to age and get experience you shouldn't be making a lot of mistakes. Because as I said, when you make mistakes, somebody else could get hurt. So, in a university, that's where you want to explore I would say.
EC: It's the enquiry side of things which I wonder about and doubt sometimes.
PW: You've got to lead them to do that. You know, on the one hand, if I just take, let's say, banking. It's just like artificial intelligence. You can explore banking all the way into agriculture, into geopolitics, into different societies, and so you can help them to expand that thought. Banking is not just about buying or selling treasuries or going to work on the deal. It's not just that, it's a lot bigger. How do you ? You need to take their interest and help them to expand it. Because if you just say, well, go and explore something else, they will say that, well, it has nothing to do with my field.
In China, in agriculture, it's all about how do we get better yield on crops and things like that, right? Then think about it this way. Before drones, how did they put fertili sers on the field? They had to do a lot of very manual work. Now they have drones, so technology is helping agriculture. Now how do you merge different types of fields, putting them together such that it will become much bigger? A bigger field 2 + 1 + 1 equals to 4 or 5 or 10. Drones suddenly now become aerial taxis, it’s going to happen in Saudi Arabia. And many other things. Cameras looking into glaciers and things like that.
So, you're going to help them to expand their minds even within their own field, how they can use, let's say, technology to enhance banking. Look at payments in China, from very primitive technology to electronic banking to digital banking. They skipped a generation. We're still writing cheques. These are the things that you’ve got to help them to understand and say, look, how do you leapfrog? How do you go from one field to another? Your field can mean a lot of things. Take linguistics. Previously it would just be translation, a good interpreter and so forth. Today, linguistics is like helping the blind to see, or the deaf to hear, helping with technology. With older people; you can use their speech patterns to understand what they're trying to say. These are all technologies. This is not like linguistics in the old days.
“What made America strong? It’s like the United Nations. You’ve got students from all over the world”
Diversity and innovation
EC: In some ways, we're not that diverse in the College of Business because the percentages of overseas students are very small. Would you like to see greater diversity in Hong Kong education?
PW: Yes, of course, because that's where you get the different cultures. What made America strong? To a certain extent, it's like after the Second World War they got all the German scientists to go over. And then the disintegration of the Soviet Union, they've again got some of the scientists. And they create a good university environment, it’s like the United Nations; you’ve got students from all over the world. They’ve got well known universities, they've got the best and the brightest to go to their universities and when these people come together, their minds and everything is limitless. And that's where your talent pool is the world. It's not just one place. The talent pool is coming from all over the world. If you look at all the Nobel Prize winners in the United States, are they all Americans? No. They’re from all over, but they work in America.
EC: You've mentioned this diverse environment in the United States. Is that almost a prerequisite for a truly innovative society? That you've got feeds coming in from many different directions and unique conversations occurring as a result?
PW: Yes, I think that's key. Different people from different cultures, they look at problems differently. Even the problems in their home countries are very different. It requires different ways to solve them. The network effect is very important. Because when you have different people thinking about different things and you pull them together laterally, have an integration across them, there are a lot more things coming out from that. And so again, this network effect of thinking. That's where all this neural technology is coming in. How do people think? They connect the dots, and new things come up. It’s limitless. It's just that we need to get the students to think like that, to have an expanding mind. When they constantly just look at the books, you know it's just about banking.
“Hong Kong flourishes because of the fact that we have international communities”
An open-ended conversation
EC: So, in fact, we need conversation, open-ended conversation…
PW: Open-ended conversations, and let them understand what's happening in the world. Previously, if you look at China, you won't hear China having a lot of conversations with the Middle East. Now you do. Every day, Middle Eastern people are coming, like from Saudi Arabia, the oil, the investments. So new things are developing all the time and the students need to understand. If you ask them about how the pattern of investment has changed in the past 10 years, they wouldn't know. Because it's not in the books. It's what's happening in the world.
EC: So as an end note, we should cherish Hong Kong's position as a place where conversations have been very apparent in the past and it will continue to be a place where conversations between East and West can happen in the future?
PW: Yes, that’s something that we must do, we must achieve. Hong Kong is an international centre. Hong Kong flourished because of the fact that we have international communities; we have French, British Canadians, Indians, so forth. All these conversations that are taking place are enhancing Hong Kong as an international centre. You know, if the conversation just focuses on one place, where is the diversity? Conversation needs to be all over the world. The US, Europe, Middle East, South Asia, and countries that are up and coming.
EC: Well, I have to say thank you so much for a fascinating and very wide-ranging conversation.