The CUHK Business School
Master’s Degree (2011-2012) Graduation Ceremony
1 December 2012
The University Mall
Speech by Mr. William H. Strong
Managing Director and Co-CEO of Morgan Stanley — Asia Pacific
Professor Michael Hui, Professor T. J. Wong, distinguished Faculty of Business Administration, invited guests, and most importantly, graduating students… thank you for inviting me to address you today…I am honored to be standing before you.
The reason that I am here today is because of you — the graduating students. You have earned your right to be here. You have worked exceptionally hard. You have put in very long hours. Remember the tremendous efforts in the Strategic Management class under Professor Didier Guillot or Investment and Portfolio Analysis under Professor Fong Wai Ming? Or many other classes that I have not named? You have made the necessary sacrifices to earn your degree. Master’s degree recipients of 2012, I congratulate you on your accomplishment!
As you reflect on what you had to do to accomplish this goal, it is also a time to thank those around you who likewise made sacrifices to invest in your future — your parents, your grandparents, your husband, your wife, your friends and others who are with you on this journey. Today… we also honor and say thank you to them for their sacrifices and efforts.
It is likely that each of us has heard the following statement from the sixth century BC philosopher Lao Tzu… “A journey of a thousand miles must begin with a single step.”… Those around you today have helped you take that first step.
Before we talk about the next steps in your journey, let us first reflect on where we are today. Sitting here in Hong Kong, we are within six hours of almost 60% of the world’s population — within six hours flying time of approximately 4 billion people in Asia…and yet… according to World Bank data for 2011, Asia represents less than 25% of the world’s Gross Domestic Product. If we look at this same issue by examining assets under management around the world, the comparison is even more striking… At the end of 2010 according to Cerulli Associates, 26.4 trillion US dollars were invested in United States-based assets, which represent approximately 50% of the world’s total while Asia had only 7.5 trillion US dollars invested in Asian-based assets or approximately 14% of the world’s total. Therefore, Asia has 60% of the world’s population, but only 14% of assets under management… That will change markedly over the next ten years. One of the principle reasons for that change is the exceptional economic growth that is expected in Asia-ex Japan. The Asian Development Bank estimates that GDP for Asia-ex Japan will grow to 48% of the world’s GDP in 2050 while the aggregate combined GDP of the United States plus Europe plus Japan will fall to only 36%. What does all of this economic data tell you?... It tells you that you are sitting in exactly the right location at precisely the correct time… The next twenty years will bring to each of you exceptional opportunities for personal growth and success. And yet,… with those opportunities also come significant obligations. You must nurture this expected growth. You must protect it. You must work hard to insure that everyone in Asia shares in this growth and not just a privileged few…
Earlier this year in the Financial Times, Changyong Rhee, the Chief Economist for the Asian Development Bank, addressed the issue of income inequality. He pointed out that over the last 20 years, the gap between Asia’s rich and poor has widened so that the richest 1 percent of Asian households now account for 6 to 8 percent of total income. Close to 20 percent of total income went to the wealthiest 5 percent in most countries. Income inequality has widened in China, India, Indonesia, among others, and…even here in Hong Kong. Taking developing Asia as a unit, over the past 20 years, the Gini coefficient — a common measure of inequality — has increased from 39 percent to 46 percent. Had it remained stable at 39 percent, another 240 million people…240 million people…would have escaped poverty… More worrying still, is the gap in opportunity… According to Dr. Rhee, children born to poor families can be 10 times more likely to die in infancy than infants from affluent households. Children from the poorest quintile are up to 5 times less likely to attend secondary school than wealthier peers and up to 20 times less likely to attend university. Dr. Rhee said it well when he concluded his comments by saying…Widening inequality threatens the sustainability of Asian growth.
Let me share with you some additional World Bank data from 2011 that will further illustrate the issue. China, as you know, is now the world’s second largest economy in absolute size with GDP exceeding 7.3 trillion US dollars, but its per capita income totaled under 5 thousand US dollars. Likewise, India’s economy which ranks as the 10th largest in the world with a GDP approximating 1.8 trillion US dollars, has a per capita income of under 1,500 US dollars per year. This compares to Hong Kong at over 34 thousand US dollars per year and the United States at over 48,000 dollars per year.
These problems may seem insurmountable…they are not... To insure continuing success in Asia, you and your generation of leaders must address these issues. I am confident that you will.
Over the course of your careers in this 21st century, you will have many opportunities, but also, as we have just discussed, many obligations. As a reference guide for the many decisions that you will face as business leaders to grow commerce and…at the same time to improve the quality of life in each of the communities in which you will operate, let me share with you a set of principles that if followed, will serve you well:
First, always conduct yourself with honesty and integrity. Do what is right.
Second, constantly search for new, value-adding ideas — nothing is more powerful than a new, simple idea. Think about how our lives have changed because of the iPhone or in my generation — the personal computer and the internet.
Third, always put your customer, client or constituent first. If you serve them well, they will always come back.
Fourth, encourage adherence to the Rule of Law. If everyone is treated equally, businesses and communities prosper.
Fifth, encourage policymakers around Asia to permit the frictionless movement of goods, people, services and capital across borders.
And lastly, give back to the communities in which you operate-support a school, a hospital, the elderly, the disadvantaged — whatever you can do to help.
Before closing, allow me to make one prediction about your careers…Your definition of what constitutes success will change over time. When I was in my late teens and early 20s, success was getting a girl to go out with me more than once…buying my first car, having fun, and establishing my career path. 15 years later,… success was being named a Partner of my firm and growing my investment banking practice. Now, 36 years after receiving my MBA from the Kellogg School at Northwestern University in the United States, I define success not by what I can accomplish, but by what I can help others accomplish…my children, my grandchildren, my clients, my community. Their success is now my success. I expect that each of you will follow a similar path…but, if you can keep that last definition of success in mind, you will be pleased at the end of your career.
Ladies and Gentlemen of the Class of 2012, the Faculty of Business Administration of The Chinese University of Hong Kong have equipped you with many of the tools you will need to succeed in the 21st century… finance, strategic management, marketing, human resources management, managerial economics… and leadership, to name a few. To succeed... not only as businessmen and women, but also to succeed as the next generation of leaders in Asia. To succeed in making the 21st century… the Asian century.
As you embark upon the next steps in your life’s journey, let me leave you with a quote that I have carried with me throughout most of my adult life…a quote from Sir Winston Churchill… “All the great things are simple… and many can be expressed in a single word: freedom, justice, honor, duty, mercy, hope.”
Masters’ graduates of 2012, I congratulate you on your achievement today and I look forward to reading about your successes yet to come as your journey continues. Ladies and gentlemen, thank you.
- end -
1