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He believes Hong Kong can still act as a good middleman between China and the world, but it needs to improve its youngsters' talents and language skills urgently.

The former stock exchange director, who was among those who lobbied Beijing to develop the landmark H-shares project in 1993 to enable mainland enterprises to list in Hong Kong, says other cities are fighting for the same gateway role for China.

"First we have the H-shares, now we have the dim sum products. They are all very good but they are something with a limited lifetime," Chu says at his office overlooking the harbour in Central.

The success of H-shares has been such that these firms now make up half of the local market. The internationalisation of the yuan since 2009 has also allowed Hong Kong to introduce many dim sum - yuan-denominated - investment products. "Hong Kong can take advantage of launching these products because China is in the process of opening up," says Chu.

The ongoing process of internationalising the yuan to make it fully convertible will take time and Hong Kong "can earn from this evolving timeline for another five to 10 years".

Even so, many other markets are tripping over each other to list mainland companies. London, Sydney, Paris and Frankfurt have all now launched yuan products.

"Now everybody is doing it. Hong Kong may well have been the first to develop these products, but we are no longer the only one to serve as the yuan trading centre. We may well have been the first one to act as a gateway for international investors to come in and out of China, but other markets such as Singapore have also been positioning themselves as the gateway to China," he says.

"We may now still enjoy the first-mover advantage but that will not secure our competitiveness forever. As such, we need to think ahead about what to do next to sustain our competitive position.

"We have to look over our shoulder because, eventually, many mainland and other cities will catch up with us," he says.

Chu cites this as a key priority, along with housing and social reconciliation, in forging a new consensus after a year of political turmoil. But most important, he feels, is education.

"We have to improve our education system, starting at the elementary levels - to have the best to teach our children at a young age when they develop their character and values. We need to offer better incentives and social recognition to attract some of our best and brightest talents to go into teaching, especially at the elementary levels."

On the economy, Chu notes that Beijing has set 2020 as the date for Shanghai to become an international financial centre. Many believe this will also be the date when the yuan becomes freely convertible.

Over the past few years, China has launched several special economic zones, such as the Shanghai Free Trade Zone, Qianhai, Tianjin and others, where foreign companies can be set up in 24 hours instead of one month. Some also offer tax advantages.

Chu says even though the threat from these cities is still "more fictional than real" for now, Hong Kong must take it seriously and reinvent itself before it is too late.

Do not "allow the world to pass you by - like the Western saying of being 'asleep at the wheel'", he says.

The city must continue to move first by innovating, offering new products and new services. It must recognise that China is not standing still but is moving on to forge other relationships, carving out new economic partnerships - such as through the Silk Road Economic Belt project, aimed at boosting cooperation and joint development throughout Eurasia.

Hong Kong should be riding atop these new directions to stay relevant and profit from them, he says.

Here, he laments the linguistic skills of local young professionals. They must have the ability to communicate well in English and Putonghua, he says.

Similarly, Hongkongers must acquire the expertise to deal with other Asian countries, such as India and Thailand, where China is keen on developing ties. India is charting economic growth of over 7 per cent a year and has been expanding trade and infrastructure projects with the mainland. There are also many mainlanders buying properties in Thailand.

"Yet we have too few people who have the knowledge or the language skills to act as intermediaries between these Asian countries and the mainland. The future investment opportunities in these countries are huge, but we in Hong Kong must ensure that we are ready and able to capture them," he says.

"We have and we must continue to develop further wealth-management products to tailor to the needs of the growing middle classes from the mainland. But then we also need to think beyond merely serving the domestic mainland markets and actively explore gaps and opportunities in other regional countries."

Chu also believes Hong Kong's property prices have created social tensions that must be resolved if the city is to unite and move forward. He warns that wealth must arise from much more than property.

"The rise of property prices creates wealth but it has also led to the negative impact of high rent and land prices making it hard for people to set up their own businesses," he says.

"Many young people, even though they have worked very hard and have done everything right - from kindergarten to university, gaining professional qualifications to become lawyers and architects for example - cannot afford to buy their own home," he says.

"This has made them very frustrated and that has hurt our social harmony."

He says Hong Kong is not alone with this problem, but "being the city with the most expensive real estate in the world, we will not be forgiven if we do too little too late.

"We need to speed up changes in our planning and building regulations to allow more flexible usage of properties which can increase the supply of more affordable residential units for our younger generations," he suggests.

"There are also innovations elsewhere we should look into, such as fractional ownership of residential homes for young families willing to share certain facilities under the same roof before they can afford to buy their own, or properties being developed for young professionals which are let on, say, a 10-year lease with an option to buy at a pre-agreed price formula."

The city needs to move urgently on housing, he believes.

On Occupy, he sees both positive and negative outcomes.

"Occupy Central has a silver lining. From an international perspective, the fact that a mass student protest can end peacefully after 79 days is almost unbelievable," he says.

"On the positive side, we have seen many young students, as young as 17 years old, who were very mature and articulate in speaking up. The movement was mostly peaceful and civilised which, to the outside world, showed that our young people have reached a good standard of citizenship.

"On the negative side, however, it may have affected the level of trust between Beijing and Hong Kong," he says.

Given how split Hong Kong is regarding the future, he worries that if Beijing were to conclude that Hong Kong itself is unable to reach a "workable consensus", it may well abandon the current proposals for political reforms and introduce a different system altogether.

"This would be an unenviable scenario," he says.

He believes Hong Kong could accept the current proposals as the starting point of an evolutionary process. "There is a need for a clear roadmap on how to lead to a wider participation to nominate and select the chief executive," he says.

"Since the electoral process for 2017 is capable of being refined for 2022 and beyond, we should start developing ideas and plans to present to Beijing so that a roadmap and process can be worked out for future refinements," Chu advises.

He suggests an independent commission that could be headed by a former chief justice and supported by experts to receive, analyse and present to Beijing "suggestions on future electoral refinements representing a full and wide participation of different sectors of our community".

Despite the impasse and the problems facing Hong Kong, Chu believes the city has a lot going for it. It must not, he says, let the political climate - much like the weather outside his window - drag everything down.

Q: What is the one thing you most want to change in Hong Kong?

A: We must improve our education system, from elementary level, with the best talent teaching our children

VICTOR CHU

Victor Chu Lap-lik is a lawyer and a veteran venture capitalist. As a businessman, he is concerned about the competitiveness of Hong Kong.

But beyond the usual bugbears troubling the city, he is focused on several causes, including protecting the oceans and educating youngsters.

Born in Guangzhou, Chu moved with his family to Hong Kong when he was four. He studied in Hong Kong and then England, where he earned a law degree at University College London.

Since 1982, he has practised corporate and commercial law with a focus on China and Asian investment transactions.

In the late 1980s, he set up venture capital firm First Eastern Investment Group, which has channelled a few billion dollars into direct investments in more than 150 projects on the mainland and in other Asian countries. The projects included toll roads, water treatment, property and manufacturing, as well as the launch of Japanese budget airline Peach Aviation three years ago with ANA to serve travellers in Japan and mainland China. The group also invests in other parts of Asia, Europe, the Middle East and the United States.

Chu was a council member of Hong Kong's stock exchange in the late '80s to early '90s, during which time he worked with then chairman Charles Lee Yeh-kwong and others to create the H-shares programme that allowed mainland enterprises to list in Hong Kong. H-shares grew to become a core part of the success of the local market, representing half of the market value and more than 60 per cent of turnover.

Chu also used to serve on the advisory committee of the Securities and Futures Commission. But besides the capital market, he also cares about charity, education and the oceans. He sits on the British-based Global Ocean Commission because of his interest in international law.

"I love seafood and I love the ocean, even though I get seasick," he says.

In July, the commission issued a report identifying problems caused by irresponsible shipping habits that had led to a decline of fish stocks, an issue in which Chu was pressing hard for change.

"This is not just a rescue package for the ocean; it is a rescue package for the planet, and for humanity. There is no healthy, secure future without a healthy, productive ocean," he wrote in an article for the .

For young people, he is keen to provide them with better education and mentoring, which would mean imparting not just knowledge and language skills but also a positive attitude and critical thinking.

"Our children should not think of just money. We need to help them develop creative thinking and a positive attitude, and to prepare themselves to compete strategically," he said. "In my generation, we were lucky because the better-educated ones could easily secure a decent career to capture the opening up of China. Nowadays, the world is interconnected and competition has become much more global, such that Hong Kong youngsters need to compete not only with locals and mainlanders, but also with others around the world.

"That is why I advise my own daughter and her peers that being good these days is not good enough; you need to be better than good. Those who are hard-working and creative and take the initiative in seeking out different opportunities will succeed. The worst won't be doing enough and just hoping for opportunities to appear."

This article appeared in the South China Morning Post print edition as: City is a driving force, if we keep eyes open

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