A staunch advocate of globalization and trade

The article of the day comes from the International Herald Tribune:

Friday, March 20, 2009

PARIS: Victor Fung has a simple message to the global leaders who will soon try to set a new path for the economy: “Please deliver.”

As chairman of the International Chamber of Commerce, or I.C.C., since last year, Mr. Fung, a Hong Kong businessman, is eager to restart global trade, which has been hobbled by the crisis.

He also has personal interest in the march of globalization, having transformed, with his brother, the family business Li & Fung into a power in the sourcing and export of Chinese textiles and manufactured goods.

In Paris recently to celebrate the 90th anniversary of the I.C.C., which represents businesses and helps arbitrate disputes, Mr. Fung was at pains to warn leaders — before they met in London April 2 representing the Group of 20 industrialized and emerging economies — against a drift toward protectionism.

“If we take away what we’ve nurtured all these years in the multilateral trading system, then we do so at our peril,” he said during an interview at the I.C.C. offices.

Mr. Fung has been concerned by recent messages sent by Western leaders, like President Nicolas Sarkozy of France, who has called for auto jobs to stay in France, and the notorious “Buy America” provisions introduced, and later modified, in the U.S. stimulus bill.

He says the current crop of leaders need to reflect on the past before reacting in haste. “Go back to the 1920s,” he said. “They, too, had a financial bubble that burst and the problem was after the busting of the bubble.”

Then, as protectionism spread, jobs were lost across the world, he said. Now, given the interdependence of economies globally, the ramifications could be even more acute. “Protectionism, actually serves to destroy jobs in the economy,” he said. “Things are so interconnected, you lose jobs immediately.”

Mr. Fung noted that the Chinese word for crisis was a compound of the characters “danger” and “opportunity,” and said economies and businesses should be positioning themselves for the rebound, whenever that comes.

Ever the optimist, Mr. Fung also found reasons to be positive about the outlook for the so-called Doha round of trade talks at the World Trade Organization, which have all but collapsed amid disagreements over agriculture subsidies. “I won’t write off Doha,” he said. But if it is declared dead, “think of the knock on confidence that would have. I don’t think the world could stand it.”

Mr. Fung is encouraging I.C.C. members to lobby governments to bolster export credit insurance programs to make up for the collapse in the trade financing in recent months. “There’s some talk now about countries pooling the risk,” he said, citing a pilot program to share the burden of backing trade financing among Japan, South Korea and Malaysia. He hopes that idea will spread.

Mr. Fung, 63, is married with three children. An avuncular figure who intersperses his conversation with hearty chuckles, he now ranks 12th on the Forbes magazine list of wealthiest Hong Kongers, one place behind his younger brother William, who as managing director of Li & Fung, takes a more hands-on role in the business.

Mervyn Davies, the British trade minister, knows Fung from his time in Hong Kong as chief of the bank Standard Chartered. “He is an outstanding Asian business leader and as chief of the International Chambers of Commerce can make a real difference,” he said.

Li & Fung was founded in Canton in 1906 by Fung Pak-liu, Victor’s grandfather, and Li To-ming. It was one of the first companies to export from China financed solely by Chinese capital, competing with the British-backed trading houses known as hongs.

Today, the group is a combination of listed and privately held companies. It has three core businesses — export sourcing, distribution and retailing. It has set a revenue target of $20 billion by 2010; Mr. Fung thinks that is still attainable.

As well as his work with the I.C.C. and the company, Mr. Fung has worn a number of other hats, including running an education foundation and heading the Hong Kong Airport Authority and the Greater Pearl River Delta Business Council. Crucially in Hong Kong, he is trusted by Beijing.

What, then, about entering politics, as is sometimes rumored in Hong Kong? “It’s absolutely furthest from my mind,” Fung said, a smile lighting up his face.

Published in: on March 25, 2009 at 7:31 pm  Comments (2)  
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2 CommentsLeave a comment

  1. Protectionism is an overused term. The Great Depression was about a money crisis just like it is today. The Smooth -Hawley act never got into high gear when it was passed in 1930. Roosevelt was elected in 1932 and a new trade bill was passed in 1934 with many more following with Roosevelt having the option of lowering or raising tariffs.
    Roosevelt tried many of the same things President Obama is trying with very little success. Finally, he said he was not going to let the dollar sign stand in his way and launched the Lend Lease Act which start shipping goods and food to the allies. He did this without worrying upfront about payment.

    Trade between nations has been ongoing for centuries but Free Trade is not trade as historically defined and practiced. It is about moving production from place to place for the sake of cheaper labor. This caused a radical devaluation of labor. This value is a real tangible one and acts as a money standard. Now this devaluation or deflation of workers has impacted all money products. See http://tapsearch.com/tapartnews http://tapsearch.com/flatworld http://ezinearticles.com/?expert=Ray_Tapajna – note article about Lend Lease Act being real free trade.

  2. Hi

    This is a wonderful opinion. The things mentioned are unanimous and needs to be appreciated by everyone


    Virtual Currency

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