The importance of education, China’s economic resilience and the urgent need for Hong Kong to open its borders once more were covered by Weijian Shan, executive chairman of PAG and one of Asia’s leading business figures, at the ULI Asia Pacific Summit in Hong Kong.

In conversation with Susheela Rivers, co-chair, global real estate sector and head of real estate Asia Pacific, at law firm DLA Piper, Shan talked about his thoughts on personal success, finding a way through difficult times and the prospects for China’s economy.

Shan is familiar with difficult times; as a 15-year-old in Mao Zedong’s China, he was sent to work in the Construction Army Corps in the Gobi Desert, an experience which formed the basis of Out of the Gobi, his memoir published in 2019. However, he left to study in Beijing after six years and subsequently became one of the first Chinese students in the United States after the Cultural Revolution.

After gaining an MBA and a doctorate, Shan worked at the World Bank, for J.P. Morgan in China, and for private equity firm Newbridge Capital (now TPG). In 2010, he co-founded PAG, an Asian investment manager with more than $50 billion of assets under management.

Shan criticized the government of Hong Kong for its failure to open the city and its economy. “If we are a closed economy, this economy cannot survive. We are an international financial center, we need people to move around, we need capital to move around.

“You know, 20 percent of Hong Kong’s economy depends on the financial industry, including services, real estate, but the other 80 percent, depends on tourism. Everything depends on tourism: hotels, restaurants, shops, entertainment centers, and so forth.

“So if tourism dies out, if the financial sector dries up, then Hong Kong doesn’t have much of a future. So it is urgently important for Hong Kong to open up and that’s something that the government can do.”

Shan said China’s zero COVID policy and repeated lockdowns was creating huge economic uncertainty. While the policy had been successful in protecting people and the economy in 2020 and 2021, it was now damaging the economy, with GDP growth of only 2.5 percent in the first half of 2022.

“China is still a big country when it comes to investment and there are many opportunities,” he said. “I think that China is probably a more investable market than many other places in the world. We’re looking at a world of stagflation in the next two to three years. However, if you look at China, it has a very good basis; monetary policy in the past five years has been very tight. So China’s inflation rate is less than 3% today.

“China has a lot of tools to stimulate the economy, if economic activities don’t come back to normal. And China is a big economy $18 trillion compared with the entire Asia Pacific region at $33 trillion. So China creates a lot of investment opportunities.”

However, in the immediate term, it was harder to be optimistic or to predict what will happen to the economy. “Now, we’re into the last quarter, we still don’t know what’s going to happen to the economic numbers in the second half, let alone next year. So until and unless economic activities come back to normal, which means that this mere COVID control policy will have to be relaxed, it is hard to feel very optimistic about the Chinese economy, because so much uncertainty is ahead of us.”

Rivers asked Shan to give some insights on the experiences which shaped his life, as well as thoughts on how to be successful. He focused sharply on education, not just because of its role in his success, but because it was something he could not take for granted in Mao’s China. “My generation toiled in the Gobi Desert, barely eking out a living, and there was no school to go to,” said Shan.

He said his philosophy in life was to “be prepared” and that education gave you the best preparation. “So when the opportunity arises, hopefully it does rise, then you will be able to capture it.”

Shan added that for a person to be successful, they needed to be dedicated and have grit but also to have good judgement, as hard work alone would not do it. “Now how do you have good judgement? Good judgement comes on the back of knowledge and experiences.

“So if you learn enough, if you key enough experiences, you will be able to make good judgments. And then if you work hard, then you can achieve whatever you set up your mind to do.”