Vincent Lo: This pandemic is actually a very good platform and opportunity for the whole world to be working together. We’re fighting a common enemy. … So I think there is something to learn from one another. But instead, we’re now just pointing fingers and not cooperating at all.



Paul Laudicina: I am Paul Laudicina, chairman emeritus of Kearney and founder of its Global Business Policy Council, and this is “Coronavirus: a world transformed.”

We’re recording this on Thursday, April 30. 

I suspect it feels to most of us, much as it does to me, that every day we are being bombarded with grim reminders of the toll COVID-19 is exacting on the lives of so many of us. This last week was no exception, even as we see some regions beginning to slowly resume pre-viral life. 

But there were two promising signs which emerged this week.

First, there’s new progress in developing disinfectants to protect surfaces from hosting and spreading coronavirus. For example, Halosil, a Delaware-based American company, is playing a critical role in sanitizing contaminated spaces through its fogging and mist disinfection technology. Already in use by hospitals, schools, and in public transportation systems, the technology was proven effective against SARS, bola, and the common flu. 

Additionally, researchers at the Hong Kong University of Science and Technology have formulated a new disinfectant that protects surfaces from coronavirus for 90 days. The anti-viral coating, which took 10 years to develop, is expected to hit stores in Hong Kong in May following clinical tests in the city back in February. It relies on heat-sensitive polymers that its inventors say respond to contamination from touch or droplets.

These disinfectants promise to be an important part of the arsenal of weapons aimed at checking the spread of COVID-19 and allowing a more confident resumption of pre-COVID-19 activities. 

Second, this week has given hope that a COVID-19 vaccine may be at least a few months closer than we had expected. As many as 100 potential COVID-19 candidate vaccines are now under development by biotech and research teams around the world, and at least five of these are in Phase 1 human clinical trials. A Pfizer vaccine is targeted for possible release as early as this autumn.  

In addition, Oxford’s Jenner Institute in the UK announced that scientists who were developing a vaccine against another coronavirus had successful trials, enabling them to leap ahead to the next step and schedule tests involving more than 6,000 people by the end of May, hoping to show that their vaccine is not only safe, but also that it works. 

Of course, it’s impossible to know if and when any vaccine will work or which will be the first to emerge as a success. But this news is surely promising. 

As we consider the next phase of response, we can look to China as the early epicenter of the outbreak and containment, for some guidance. China has begun the transition back to more normal lifestyle and operating conditions, and here to talk with me today about the China experience is an old friend and prominent Hong Kong-based business leader. 

Interview with guest

Paul Laudicina: Today’s guest, Vincent Lo, is founder and chairman of the Hong Kong-based premium property development and construction firm Shui On Group, and Vincent has been a pioneer in the development of Shanghai’s entertainment district and many premium districts around the world. I’m especially interested to hear his personal perspective about how the coronavirus crisis has affected life in China these past few months and what universal lessons we might be able to learn moving forward. Chairman Lo joins me today from Hong Kong.

First of all, Vincent, I hope you and your family are well. The world has surely changed since we were last together at our CEO retreat in Mallorca last summer. This has been quite a year, hasn’t it, for Hong Kong and the world? In Hong Kong, first the disruption from the demonstrations and then the disruption from coronavirus. How do things look in Hong Kong today?

Vincent Lo: I have to say, we’re slowly trying to get back to normal. I think the demonstration last year was a major blow to all of us because we’ve never expected Hong Kong people can become so violent, and there’s a lot of outside players involved. So it was a difficult period, that particular six months, and then right after, we followed with this coronavirus, and then the last two–three months we’ve been locked down. 

And business, you know, we’re, of course, trying to get it back to normal, but it’s not back in full swing because most other places are actually not functioning yet. But now, I think getting back to normal is not as simple as people think. So, some economists have been predicting that we will have a V-shaped rebound. I don’t think that’s going to be happening anytime soon.

Paul Laudicina: Yeah, we’re learning a whole new alphabet, aren’t we? V-shaped, U-shaped, L-shaped, W-shaped. With Martin Wolf, we were talking about bouncing up and down repeatedly over months, and maybe we’ll see that. 

But you certainly have a lot of experience in Hong Kong. You’ve lived and managed through other crises. I mean, you live through the SARS epidemic of 2003, which if I recall correctly, began around March of that year and had pretty much ended by June. We were presumably ill-prepared for that epidemic. And are we any better at managing through such challenges of public health? Have we learned much over time?

Vincent Lo: I think we are sort of better equipped or prepared for this particular virus. But the bad thing is, this virus is so different from the others, and it mutates. And right now, I think the scientists are still trying to figure out the characteristics of this particular virus, right? 

So people are very nervous. And then also, there’s a lot of hidden cases, asymptomatic, and how are you going to be dealing with that? So all these I think are really creating a lot of nervousness in our community. Of course, the last few days, we have zero cases. So we hope we will be getting back to normal. But unfortunately, I’ve been informed that the demonstrators are coming back now. 

Paul Laudicina: So then if you don’t have one kind of challenge, you have another, Vincent. The response to the virus across China: what can you tell us about it? What differences do you observe if any between Hong Kong and the mainland on dealing with this crisis? I mean, we have “one country two systems,” but has there been a different system approach to managing the contagion in Hong Kong from what you see on the mainland?

Vincent Lo: Actually, China has acted very swiftly after confirming that this virus will have human-to-human transmission. So they locked down Hubei province and Wuhan city on January 23rd, and very draconian policies were introduced nationwide, restricting traffic movements across China’s cities. And they have placed public health issues over economic growth, which is, I think, quite unusual. But I think that’s required. Because if you don’t stop the virus, how are you going to have economic growth? 

And so all these containment policies were top-down, the top leaders were totally involved in the whole fight. And then China also introduced a digital health code issued to each resident. They can check people’s movement and assign a green, yellow, or red code indicating the status of the individual’s health, and over 90 percent of the urban population had downloaded this app, and over 100 Chinese cities have been using it.

Hong Kong: at first, I think we were quite relaxed about the virus. But when we see the seriousness of how China is dealing with it, the mainland, I think we followed suit. And then we start to also really close down on our borders. And I think that’s why, up to today, it’s only just over 1,000 cases and only four deaths.

Paul Laudicina: Yeah, that’s, that’s quite incredible. And that’s why the world is watching and should be watching so closely for how things are going in China and Hong Kong. And Hong Kong has been following this so-called “suppression and lift” strategy in which the government aims to drive down new infections to a low level, and clearly, you’re at a low level of 1,000 incidents of infection and then loosening the reins while watching for any resurgence. And you say you’ve got zero new cases. So that’s great. So how has this been working? Do you believe that there are lessons here from the Hong Kong experience that perhaps we should be applying elsewhere?

Vincent Lo: Most definitely. Especially, I think the figures coming out of the US is quite shocking. For a country so advanced in the economy, you know, you have 31 percent and 23 percent of the confirmed infection and fatality cases around the world, which is over 10 times more than China. 

So we can see that the U.S. is unprepared. And there’s a failure to anticipate, and what I would suggest: that concerned parties can look at how China has been dealing with it. China has been very decisive with early actions. And then China has a centralized surveillance system. So this is I think very important for the management of new outbreaks.

Because the second wave, the third wave will come. Just like in Hong Kong, when we allowed a lot of the students who are studying in Europe and US coming back home, immediately the figures shot up. So I think all these controls have to be in place for quite some time.

Paul Laudicina: It’s been impressive to watch how governments in general and China in particular have put a premium on public health first and foremost, but clearly, the pandemic has affected economic growth around the world and in China. 

So, there’s a great deal of discussion about this trade-off between public health and economic growth. How is the pandemic in your view, Vincent, as someone who’s been a major actor in the economy of the region, how is the pandemic likely to affect economic growth in the coming year or more, in your view, Vincent?

Vincent Lo: Obviously, I think it’s—like I was suggesting—we are now trying to get back to normal functioning in our business. But it’s not so simple because the supply chain, it’s very much disrupted. And then because of the lockdown, the demand side is also substantially decreased.

So even if you get back to normal to, to be manufacturing, to be producing goods, but there’s no demand. So how do you deal with that? And then retail, there’s no business, like you were suggesting. So how can they maintain their business? 

All these I think we all will have to try and deal with, and I can see a lot of governments coming up with a lot of money—QE—to try and support this business. But you cannot forever be trying to support businesses that are going out of business because if there’s no business, how do you support them? 

So how do you recreate that business? How do you get people to go and spend money again? Right? Luxury goods, for example, has been down at least 25 percent in the first quarter. People wouldn’t want to be buying a nice jacket or a new watch.

Paul Laudicina: Well, what about real estate? A sector that you know, you know, quite well, I mean, obviously, the workplace behavior is changing a great deal with people working virtually. The longer we go with this being an alternative to going into a physical location, might there be less demand for real estate, especially commercial real estate, going forward? How do you see the real estate sector being affected? 

Vincent Lo: What you were suggesting for work from home, I think it’s likely going to become a trend, but it will require substantial improvement in technology to support this remote working. 
And also, are you comfortable to allow your staff to bring all the confidential information from the office back home to work? How do you control that? I think all these are issues that we will have to contend with. 

But I can see that in the future, especially in places like Hong Kong and in big cities where actually the apartment is quite small, and it’s not easy for somebody to work from home when you have kids, so noises all around—so, I can see that maybe in the future, we will have to design a sort of common work area in the clubhouses. Hopefully we can have more security there, cybersecurity or whatever. So, I think all these we will have to take into consideration.

And then of course, you know, with less travel, then the master plan for the cities will have to be changed, right? Less people going out, then public transport or even cars will be reduced. Roads might not be required as much.

Paul Laudicina: Yeah, it’s extraordinary what we’ve seen because of the lockdown in cities around the world: the incredible drops in pollution, for example, over the last few months and what we’re learning perhaps about long-term sustainability from this crisis as well. Have you seen a difference in air quality there in Hong Kong? 

Vincent Lo: Most definitely. We’re now starting to see clear blue sky again. It’s the largest-ever fall in CO2 emissions in China, and it’s cut by 25 percent in the first quarter of this year. And with the 10 weeks locked down, it’s the cleanest February–March air quality on record. 

So the difference is huge. 

Paul Laudicina: Wow. Dramatic. 

Vincent Lo: And I think China wants to continue with this. But it’s not going to be an overnight achievement, success, for sure—unless we have a lockdown like what we have now, and then we’ll have clear blue sky.

Paul Laudicina: Well, you know, among the things that we see changing is lots of discussion among companies about reordering, redirecting, their global supply chains, so as not to be so dependent on any one source of supply, whether it’s China or any other source of supply, in order to avoid interruptions of the kind that we’ve seen since the advent of Coronavirus in the future, whether they’re disruptions due to pandemic, trade barriers, terrorism, or any kind of friction in the movement of goods around the world. Do you see this changing the dynamics of sort of the locus of global economic activity?

Vincent Lo: It’s definitely happening. But fortunately, or unfortunately, the supply chain in China is very mature. It’s very efficient. And to try and find new alternative production, it’s not so simple and easy. Of course, a lot of production now is going to Vietnam, Cambodia, and all these places, but it’s a very small market, and the skill of the labor is not quite like in China. So I don’t see this changing overnight. But definitely I think there’s a trend that’s moving in that direction. And if anything, I think China is also trying to go up the sort of supply chain to do the more high-quality and the higher-level technology stuff. I think that’s only normal, and it’s good for everybody.

Paul Laudicina: Well, Vincent, you have certainly been very active, not just in business in China in Asia, but throughout the world in the West and in the US as well. Clearly, Sino–US relations have suffered over the course of the last few years. How do you see the relationship between China and the US evolving in the wake of coronavirus? Are you sanguine about a better, more stable relationship with China after a period of restoration following coronavirus?

Vincent Lo: Unfortunately, Paul, I don’t see that happening anytime soon because right now actually, there’s a lot of finger-pointing—certain leaders and politicians wanting to hold China responsible for this pandemic and then also the trade friction. All these issues, I think, that will need to be resolved. But it’s not going to be happening anytime soon because I think the two countries, especially what I’ve been reading and hearing, the sort of racism and anti-China feeling has been escalating in the US and in the West. So I think this is a very worrying sort of trend. And unfortunately, I think China’s rise is creating a bit of discomfort and nervousness in certain corners, but I think it’s going to be a fact of life. So I think I hope people will accept it and say, “Okay, let’s sit down and talk [about] how we can make this work for everybody.”

Paul Laudicina: Yeah, you would hope that the global community would understand that this is a zero-sum game that we’re in, that either we all find the way to support each other and all benefit from that kind of cooperative interaction, or we each tug on our own end of the blanket. And, frankly, no one comes out the better from that kind of struggle. And we’ve seen in past global challenges that this can go either way. What do you think it will take to move the global community in the right direction in this more cooperative engagement rather than in the kind of balkanized isolationism that we have seen of late?

Vincent Lo: Actually, this pandemic is actually a very good platform and opportunity for the whole world to be working together. We’re fighting a common enemy. But instead, we’re seeing finger-pointing and accusing one another. I think right now this pandemic, if we can work together—and just our sharing the experience that we have on how China has contained this—this would be so useful and important for the US and for those European countries. 

Why would the US, such an advanced country, would have 10 times more virus cases compared to China? So I think there is something to learn from one another. But instead, we’re now just pointing fingers and not cooperating at all.

Paul Laudicina: Is there something, Vincent, that you think the business community and business leaders on all sides of the geographic divides can do to help a more positive outcome in these kinds of questions?

Vincent Lo: Most definitely. I think the businesspeople actually are much more down to earth and pragmatic, right, especially those that have been operating inside China. And I think the business sector can play a much bigger role, but the business sector is also under extreme pressure. 

Paul Laudicina: Well, I would hope that business leaders on both sides of this divide would be able to understand, maybe more than government leaders do, what the common cause is and why this is indeed a zero-sum game and would be able to exert some influence. 

What we see that’s encouraging, of course, is that local governments, regional governments, seem to understand it better than national governments. And in the absence of a global governance structure, we have to rely as much as not upon public sentiment, to kind of force leadership to do the right thing if leadership doesn’t do it on its own. Does that sound plausible to you, Vincent?

Vincent Lo: Yes, I think you—people can—cast their vote. If they see the least certain leader is leading you down the wrong path, you have to change it. Exercise to your right. And I think that’s the western style of democracy. 

Paul Laudicina: Well, if you were to look forward a year from now, do you have any notion of where you think we might be, how we will be discussing this issue? What will have gone right, what will have gone wrong? Any sense of where you think will be? Are you net–net bullish about our ability to get through this and restore the world to some sense of equilibrium and forward movement? What’s your basic sort of sentiment on this, Vincent?

Vincent Lo: Paul, I’m fairly bearish. I think next year will be worse than this year. And I think we will have to go through a major sort of crisis, economic downturn and everything. And then hopefully, the leaders of the world can sit down and say, “Okay, let’s try and get ourselves out of this hole.”

Paul Laudicina: Well, hopefully, this is a crisis that we won’t waste. It’ll be cathartic for the global community to understand that we need to do things differently going forward. I think the insights that you’ve shared with us, Vincent, have certainly been important in understanding what we need to do, what we should be doing. So I thank you very much for joining us, and I wish you good health and good fortune. Thank you, Vincent.

Vincent Lo: Thank you, Paul. And good health and good fortune to you too.

Wrap-up (Paul Laudicina)

There’s only so much ground we can cover in one 30-minute interview, and we’re aware there are undoubtedly many more questions that you might wish we had been able to discuss during each podcast. So don’t hesitate to be in touch with me with any additional insight we might be able to provide by contacting me at [email protected] or on Twitter at @paullaudicina, and I would be happy to respond. 

We’ll be back with new episodes of Coronavirus: a world transformed soon. So stay tuned. More is coming.


About Vincent Lo

Vincent H. S. Lo is the founder and chairman of the Shui On Group, which was established in 1971. He is also the chairman of Shui On Land Limited and SOCAM Development Limited, both of which are listed on the Hong Kong Stock Exchange.

He was awarded the Grand Bauhinia Medal in 2017 and the Gold Bauhinia Star in 1998. He was appointed as a justice of the peace in 1999 by the Government of the Hong Kong Special Administrative Region. He was named businessman of the year at the Hong Kong Business Awards in 2001 and won the Director of the Year Award from The Hong Kong Institute of Directors in 2002 and Chevalier des Arts et des Lettres by the French government in 2005. In 2009, he was named the Ernst & Young China Entrepreneur of the Year as well as the China Real Estate Sector Entrepreneur of the Year. He was named an honorary citizen of Shanghai in 1999 and Foshan in 2011. In 2012, the 4th World Chinese Economic Forum honored him with the Lifetime Achievement Award for leadership in the property sector.

In addition to his business capacity, Vincent has been active in community service. He participated in the preparatory works for the establishment of the Hong Kong Special Administrative Region. He is the chairman of the Hong Kong Trade Development Council, a member of the Board of Directors of Boao Forum for Asia, president of the Council for the Promotion & Development of Yangtze, and the honorary life president of the Business and Professionals Federation of Hong Kong.