Jardine House stands in the central business district of Hong Kong. Photo by Jerome Favre/Bloomberg

Traders, Smugglers, Billionaires: British Dynasty Eyes China Again

It rises near the edge of Hong Kong’s Victoria Harbor, not far from the iconic Star Ferry: “the house of 1,000 assholes.”

The time-worn sobriquet is said to refer to the skyscraper’s distinctive round windows—and, less charitably, to what’s inside.

This, after all, is Jardine House, headquarters of the storied British “hong” that China has eyed with suspicion since the days when the founders of the trading company were trafficking opium in the Pearl River Delta.

But today—more than 175 years after William Jardine and James Matheson helped deliver Hong Kong into the hands of British imperialists and 22 years into the territory’s handover to an ascendant China—a new era has begun for the group and its billionaire dynasty, the Keswick family, who married into the Jardine clan in the 19th century.

Jardines has been refining its strategy under its newest taipan, or big boss, Ben Keswick, who became executive chairman this year. His uncle, Henry, expanded the family’s reach across Southeast Asia, a campaign that continued last year with Astra International’s investment in Indonesian startup Go-Jek. Now, under Ben, even as trade tensions between Beijing and the West grow, the company is gaining steam faster than ever in Communist China, where Jardines’ fraught history has at times thwarted its ambitions.

Ben Keswick with his wife Martha at the Mandarin Oriental 50th Anniversary gala event in Hong Kong in 2013 (left) and Henry Keswick at an annual general meeting in 1994. Credit: South China Morning Post.

“Ben’s succession has been progressing for a number of years and I have great confidence that he will continue to drive the business to further success,” Henry Keswick said in a September statement announcing his retirement.

At 46, Ben represents the fifth generation atop Jardines, the inspiration for James Clavell’s novel “Noble House.” His ascendance coincides with another milestone for the family: On paper, the Keswicks became richer than ever this year, and have a combined net worth of at least $5 billion, according to the Bloomberg Billionaires Index.

Ben Keswick and other members of the family declined to comment for this story.

Jardines’ Jewels

Group’s underlying profit in 2018 exceeded $1.7 billion

Companies with mainland China presence

Astra

$465M

Hongkong Land

438

Dairy Farm

278

Jardine Motors

175

Jardine Pacific

164

Jardine Cycle & Carriage

102

Jardine Lloyd Thompson*

77

Mandarin Oriental

45

Companies with mainland China presence

Astra

$465M

Hongkong Land

438

Dairy Farm

278

Jardine Motors

175

Jardine Pacific

164

Jardine Cycle & Carriage

102

Jardine Lloyd Thompson*

77

Mandarin Oriental

45

Companies with mainland China presence

$465M

Astra

$278M

Dairy Farm

2,809 out of total of 9,747 retail outets are in mainland China

$175M

Jardine Motors

$164M

Jardine Pacific

Zung Fu car dealers now has 32 Mercedes-Benz outlets in mainland China

 

Units with a mainland presence include packaging company Greatview and Gammon Construction

$438M

Hongkong Land

Mainland China accounted for 26% of underlying operating profit before corporate expenses. Hong Kong accounted for 54%

$102M

Jardine Cycle &

Carriage

$77M

Jardine Lloyd

Thompson*

$45M

Mandarin

Oriental

Hotels in Beijing, Guangzhou, Sanya and Shanghai out of 32 hotels worldwide

*Jardine Lloyd Thompson’s 2017 annual report said it was expanding into mainland China without providing further details. It has since been sold.
Source: Hongkong Land annual report 2018, mandarinoriental.com, Dairy Farm annual report 2018 and jardines.com

Impressive as that sounds, the 10-digit figure in fact underscores a sober reality: The Scottish Keswick clan has long since been eclipsed by Hong Kong’s Chinese elite in terms of wealth and influence.

Li Ka-shing, for instance, found factory work when he arrived from southern China in the 1940s, as colonial powers like Jardines lorded over Hong Kong. Today, Li’s fortune is more than five times greater than the Keswicks.

Rich Rivals

Keswick family’s wealth is dwarfed by Hong Kong’s largest fortunes

$29.1B

$25B

Li Ka-shing

CK Hutchison

Holdings

Real estate

Lee Shau Kee

Henderson Land

Development

Real estate

$15.8B

$14.9B

Henry Cheng

Chow Tai Fook

Jewellery

Retail

Lui Che-Woo

Galaxy

Entertainment

Gaming

$12.2B

$12.1B

Raymond Kwok

Sun Hung Kai

Properties

Real estate

Peter Woo

Wheelock

& Co.

Real estate

$29.1B

$25B

$15.8B

Li Ka-shing

CK Hutchison

Holdings

Real estate

Lee Shau Kee

Henderson Land

Development

Real estate

Henry Cheng

Chow Tai Fook

Jewellery

Retail

$14.9B

$12.2B

$12.1B

Lui Che-Woo

Galaxy

Entertainment

Gaming

Raymond Kwok

Sun Hung Kai

Properties

Real estate

Peter Woo

Wheelock

& Co.

Real estate

$29.1B

$25B

$15.8B

$14.9B

$12.2B

$12.1B

Li Ka-shing

CK Hutchison

Holdings

Real estate

Lee Shau Kee

Henderson Land

Development

Real estate

Henry Cheng

Chow Tai Fook

Jewellery

Retail

Lui Che-Woo

Galaxy

Entertainment

Gaming

Raymond Kwok

Sun Hung Kai

Properties

Real estate

Peter Woo

Wheelock

& Co.

Real estate

Data as of May 29, 2019
Source: Bloomberg Billionaires Index

Still, change is afoot. In March, Jardine Matheson’s Mandarin Oriental unit closed its iconic Excelsior hotel, built on what is known as Plot 1—the very first parcel of land sold around the time Hong Kong became a British colony in 1843. Nearby stands the Noonday Gun, the famous three-pounder that harks back to the days when Jardines’ private militia would fire off a salute when the company’s taipan arrived. In a city where real estate now dominates just about everything, Jardines plans to replace the Excelsior with a more lucrative office tower.

The Excelsior hotel in Causeway Bay in 2017. Photo by Isaac Lawrence/AFP/Getty

At the same time, other plans are unfolding to the north, in Beijing. Jardines unveiled a five-star Mandarin Oriental blocks from Tiananmen Square—a move that once would’ve been unthinkable.

Mao’s Communist Party kicked foreign companies, including Jardine, out of China after the 1949 revolution. The 1989 Tiananmen Square massacre convulsed Hong Kong and is still memorialized every June 4. Despite its deep Hong Kong roots, Jardines’ quit the city’s stock exchange for Singapore five years later, as Britain prepared to return its colony to China. The move didn’t go unnoticed in London or Beijing.

“It wasn’t popular with the British government and it wasn’t popular with the Chinese government but it was the right thing to do for the firm,” said Charles Powell, a director of Jardine Strategic Holdings Ltd., in a November interview in New York. “Henry was capable of taking the long-term view and knew that he could rebuild relationships that would have been disturbed by that event.”

Now, like just about everyone else, Jardines wants to make a bigger mark on the mainland.

“For many years the Mandarin tried to open in Beijing and Shanghai, but they were knocking on a brick wall,” says Simon Yip, who worked as a sales manager at Excelsior and at Mandarin properties in Singapore and Indonesia (he’s now a vice-president at cross-town rival Peninsula Hotels). Today the chain has four hotels in mainland China, although the expansion hasn’t always gone smoothly. A skyscraper set to house a Mandarin Oriental in Beijing was engulfed in a huge fire in 2009 and never opened.

The group’s Hongkong Land unit, meanwhile, acquired six sites for new projects on the mainland in 2018. Other China operations range from malls to stakes in Mercedes-Benz dealerships. Jardines only recently began breaking out earnings from the mainland in its annual reports. In 2018, 15 percent of the group’s $1.7 billion in combined profit came from the mainland. Southeast Asia is the other key area of focus for the group, with its half stake in Indonesian conglomerate Astra valued at $10 billion.

Hongkong Land’s Holdings Across Asia

Offices

Retail

Residential

Hotels and serviced apartments

Beijing

CHINA

Nanjing

Shanghai

Chengdu

Wuhan

Hangzhou

Chongqing

Hong Kong

Macau

Hanoi

Manila

Bangkok

Phnom Penh

Cebu

Ho Chi Minh City

Malaysia

SINGAPORE

Jakarta

Offices

Retail

Residential

Hotels and serviced apartments

Beijing

CHINA

Nanjing

Shanghai

Chengdu

Wuhan

Hangzhou

Chongqing

Hong Kong

Macau

Hanoi

Manila

Bangkok

Cebu

Ho Chi Minh City

Phnom Penh

Malaysia

SINGAPORE

Jakarta

Offices

Retail

Residential

Hotels and serviced apartments

Beijing

Nanjing

Shanghai

Chengdu

Wuhan

Hangzhou

Chongqing

Hong Kong

Macau

Hanoi

Manila

Bangkok

Cebu

Ho Chi Minh City

Phnom Penh

Malaysia

SINGAPORE

Jakarta

Source: Honkong Land

Whether Jardines’ run on the mainland can last is uncertain, given strains in China’s economy and the trade tensions that have been roiling world markets.

On a recent evening in Shenzhen, across the border from Hong Kong, a salesman at a Jardines-backed dealership was talking up Mercedes C-class sedans. Members of southern China’s rising middle class grew up watching Hong Kong films in the 1990s and now see the cars as status symbols—a totem of Hong Kong-style success, he said.

Such optimism aside, cracks are appearing in the broader Chinese car market, which shrank for the first time in decades last year. Real estate and retail are worries, too.

Whatever its future in mainland China, Jardines remains a symbol of the colonial past although one whose historic Hong Kong holdings are being overshadowed by more recent developments like Li Ka-shing’s Cheung Kong Center and the International Finance Center, which was developed by the Kwok family and Lee Shau Kee.

Changing Skyline

Jardine House and Exchange Square in Central are dwarfed by more recent developments

1992

1 & 2 Exchange

Square

3 Exchange

Square

Jardine House

1992

1 & 2 Exchange

Square

3 Exchange

Square

Jardine House

1992

3 Exchange Square

1988

Jardine House

1973

1 & 2

Exchange Square

1988

Prince’s Building

1965

1992

3 Exchange Square

1988

Jardine House

1973

1 & 2

Exchange Square

1988

Prince’s Building

1965

1992

3 Exchange Square

1988

1 & 2 Exchange Square

1988

Jardine House

1973

Prince’s Building

1965

2017

1 & 2 Exchange

Square

3 Exchange

Square

Jardine House

2017

1 & 2 Exchange

Square

3 Exchange

Square

Jardine House

2 IFC

2003

2017

The Center

1998

3 Exchange Square

1988

1 IFC

1999

Jardine House

1973

1 & 2

Exchange Square

1988

Prince’s Building

1965

2 IFC

2003

2017

The Center

1998

3 Exchange Square

1988

Cheung Kong Center

1999

1 IFC

1999

Jardine House

1973

1 & 2

Exchange Square

1988

Prince’s Building

1965

2017

2 IFC

2003

The Center

1998

3 Exchange Square

1988

Cheung Kong Center

1999

1 IFC

1999

1 & 2 Exchange Square

1988

Jardine House

1973

Prince’s Building

1965

Photos by Roger Allen/Mirrorpix/Getty 1992 and Dukas/UIG/Getty 2017

Jardines remains one of Hong Kong’s largest office landlords, thanks primarily to Hongkong Land’s holdings in Central, the high-priced business district. Its property there was valued at $32 billion at the end of 2018. Former employees speak wistfully of the company junk boat, getaways at its bungalows on Hong Kong’s Lantau Island and in the mountains near Jakarta, and the annual charity race up the stairs to the top of Jardine House, where portraits of taipans past and landscapes of Victoria Harbour adorn the walls.

Another explanation for the building’s unflattering nickname is, some say, the corporate lawyers who are also tenants in the building.

Hongkong Land’s Central Holdings

Victoria Harbour

3 Exchange Square

Hong Kong

The Forum

2 Exchange Square

1 Exchange Square

Jardine House

Chater House

Central

Alexandra House

Gloucester

Tower

Princes Building

Edinburgh Tower

Landmark Atrium

York House

100m

500ft

3 Exchange Square

Hong Kong

The Forum

2 Exchange Square

1 Exchange Square

Jardine House

Chater House

Central

Alexandra House

Gloucester Tower

Princes Building

Landmark Atrium

Edinburgh Tower

100m

York House

500ft

Victoria Harbour

3 Exchange Square

Hong Kong

The Forum

2 Exchange Square

1 Exchange Square

Jardine House

Chater House

Central

Alexandra House

Gloucester Tower

Princes Building

Edinburgh Tower

Landmark Atrium

York House

Admiralty

100m

500ft

Sources: Hongkong Land annual report 2018, OpenStreetMap

Julia Lovell, author of “The Opium War: Drugs, Dreams and the Making of China,” said the trade tension between the Trump administration and Beijing reminds some mainland commentators of the mid-19th century conflicts so integral to the history of Jardines and colonial Hong Kong.

That came about after China seized opium from British traders in Canton, now Guangzhou, and began destroying it by the ton. Back in London, William Jardine lobbied for British action that would eventually lead to Hong Kong’s surrender. While these events are absent from Jardine Matheson’s history page on its website, they still resonate in Chinese society.

“It is never far from the front of public memory in China today,” Lovell said. Indeed, up the river from Hong Kong on the mainland, portraits of William Jardine and James Matheson stare down from walls inside the Opium War Museum in the industrial city of Dongguan. Beneath them, a label reads: “Opium Smuggler.”