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Amid clamor over democracy, Hong Kong's tycoons keeping quiet

Billionaire Li Ka-shing, chairman of Cheung Kong (Holdings) Ltd. and Hutchison Whampoa Ltd..
Jerome Favre | Bloomberg | Getty Images
Billionaire Li Ka-shing, chairman of Cheung Kong (Holdings) Ltd. and Hutchison Whampoa Ltd..

The two events a month ago could scarcely have been more different: As this city's wealthiest tycoons, impeccably tailored, gathered in an opulent hall in Beijing to meet with President Xi Jinping of China, thousands of scruffy university and high school students hit the streets of Hong Kong, boycotting classes to protest Chinese-imposed limits on voting rights here.

The student protest led to turbulent demonstrations and the occupation of downtown avenues, the biggest challenge to Beijing's authority in Hong Kong since the territory reverted to Chinese rule in 1997.

The tycoons, however, have barely been heard from.

As a struggle over Hong Kong's political future unfolds, the men and women who arguably wield the most influence with Beijing, and financially have the most at stake, have maintained a studied silence on the outcome. Wary of upsetting China's leaders, who could dismantle or damage their businesses, and concerned about offending the Hong Kong public, many of whom are already resentful, they have instead retreated behind the tinted windows of their limousines and the elaborate gates of their hillside estates.

Asia's wealthiest man, Li Ka-shing, a real estate and ports magnate, briefly broke the silence last week with a written statement, saying that while he understood the "passionate pursuits" of Hong Kong students, they should go home.

"I sincerely urge everyone not to let today's passion become tomorrow's regret,"he said. "I earnestly urge everyone to return home immediately to your families."

Privately, the tycoons express a broad range of views on the street protests, and somehave been more willing than others to accept the goal of broader public participation in elections, as opposed to the circumscribed version offered by China. Many do not trust Hong Kong's leader, Chief Executive Leung Chun-ying,regarding him as someone with authoritarian tendencies and a streak of economic populism who might someday raise their taxes to pay for greater social spending.

But public reticence is all that Beijing is asking of the business elite for now.

Read MoreWhy HK protests won't end soon, despite the talks

A key goal of President Xi's September meeting was to tell restive industrialists to put aside their differences with Mr. Leung's administration and support the Hong Kong government during what Beijing already foresaw as an autumn of democracy protests, four Hong Kong officials and participants in Mr. Xi's meeting said.

The request silenced them, said Regina Ip, a member of Mr. Leung's Executive Council who is also a lawmaker from the pro-Beijing New People's Party. "No public criticism has surfaced despite what they might think," she said.

As a result, the gulf between the students and the business elite has widened. While the protesters' principal goals are political, mainly open elections for the chief executive, a current of economic discontent underpins the movement. Many protesters have complained about the high cost of housing, the scarcity of high-paying jobs and the lack of social mobility.

"Housing prices are too high," said Winson Tam, a 28-year-old university graduate and self-employed financial planner who joins the protests each evening. "I live with parents, and owning my own home is a much too faraway dream."

However the protest plays out, such concerns are unlikely to go away soon. New university graduates here typically earn less than $18,000 a year in a city where a 177-square-foot studio sells for $250,000. And of greater concern to Beijing, the same pressures exist on the mainland, where housing prices are exorbitant and the annual number of college graduates has quintupled since 2000.

Economic issues also play into the government's rejection of the protesters' demand for open elections.

In an interview on Monday, Mr. Leung said that one reason fully open elections could not be allowed here was because they would result in "a numbers game" that would force the government to skew "politics and policies" toward poor people. A panel of 1,200 local leaders, many of them wealthy, currently selects Hong Kong's chief executive, who is then appointed by Beijing.

Mr. Leung's comments followed those by a Chinese academic who advises the central government on Hong Kong issues, who said in August that democracy in Hong Kong had to be limited in order to protect the interests of its capitalists. In a memorable, and at the time surprising, comment at a speech here arranged by the Chinese Foreign Ministry, he said universal suffrage would hurt the business community because "their slice of pie will be shared by others."

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Beijing's quiet alliance with the business elite has not sat well with the protesters. On Wednesday afternoon, close to 100 people protested outside the front gate of Mr. Leung's official residence, accusing him of colluding with tycoons on policies that discriminated against the poor.

But if the past is any guide, the protesters need at least some of the elite on their side if they are to make any headway.

The last big surge in pro-democracy street protests here was in 2003, when a previous administration sought to pass stringent internal security legislation.Tycoons torpedoed that legislation, despite heavy pressure from Beijing to support it, at least in part because some feared that continued protests might result in property damage to downtown buildings.

But unlike 2003, the business elite is exerting no pressure on the government this year to strike a compromise with the demonstrators, according to a person deeply involved in the Hong Kong government's decision-making.

Real estate tycoons are unconcerned because shopkeepers and other tenants are still paying their rent, while financiers have been reluctant to draw attention to the protests for fear of damaging business confidence, said the person, who insisted on anonymity because of the political sensitivity of the issue.

That has left some grumbling by the leaders of retailers and other commercial businesses.

Numerous tycoons, including Mr. Li, declined to be interviewed or did not respond to interview requests about the protests or Hong Kong politics.

Indeed, publicly aligning with one side or the other could put a crimp in a business.

Read MoreProtests cast 'long shadow' over Hong Kong's future

Two weeks ago, Derrick Pang, the deputy chairman of Chun Wo Development Holdings,canceled two company-sponsored scholarships at the University of Hong Kong. "I can't support institutions that continue to allow their students to violate the law," he explained in a telephone interview on Wednesday.

Since the cancellation of the scholarships, Mr. Pang said that he had been castigated on Internet sites and that "six or seven" media organizations had begun investigating whether Chun Wo had government contracts or any secret ties to Mr. Leung.

"No one is willing to speak out" in the business community, he complained, adding, "I'm not against democracy, I'm just against the protests."