On today's episode, our Senior Partner Colin Cohen speaks with Victor Apps, Chairman of the Business and Professionals Federation of Hong Kong and formerly a senior insurance executive and member of the Election Committee. Victor looks back on his career and also addresses two issues on which he and the Federation have been particularly vocal, the Mandatory Provident Fund and poverty in Hong Kong. Stay tuned.
Host: Colin Cohen
Director: Niall Donnelly
Producer and VO: Thomas Latter
On today's episode, our Senior Partner Colin Cohen speaks with Victor Apps, Chairman of the Business and Professionals Federation of Hong Kong and formerly a senior insurance executive and member of the Election Committee. Victor looks back on his career and also addresses two issues on which he and the Federation have been particularly vocal, the Mandatory Provident Fund and poverty in Hong Kong. Stay tuned.
Host: Colin Cohen
Director: Niall Donnelly
Producer and VO: Thomas Latter
[00:00:40] Colin Cohen: Victor, welcome to Law & More. How's life been treating you over the past few days?
[00:00:46] Victor Apps: Well, pretty good getting ready for Christmas, seeing we got these two wonderful twin granddaughters in town and we spent a lot of time with them, it's very good, it's nice to be in a COVID free place.
[00:00:55] Colin Cohen: Yeah I think it is. Okay, before I talk about your globe-trotting career in the world of business let's go back in time just a little bit. You were raised in Britain, UK. You went to school there and you actually went to in the same university Cambridge. Tell us a little about the early days and how do you end up in the same college, downing, as me.
[00:01:16] Victor Apps: I was born in Working class background I'd say. My dad was a bus conductor in London. And I was lucky when I was 11 to get a scholarship to the Latimer school in London when the old days of direct grant schools where you could go to these really good schools with the government paying. And from that, I managed to get to Cambridge and I was the first person in my entire family ever to go to university, I'm talking about dozens of cousins and aunts and uncles, I was the very first, so that was exciting, and gave me a lot of opportunities from then on.
[00:01:43] Colin Cohen: Just out of interest, what made you take maths and physics? It's an unusual combination.
[00:01:48] Victor Apps: Well strictly because that's the only thing I could do well in those days, my grades and other subjects So so but my grades in Maths was very good. So, in the English system the old A-level system you have to focus on the ones you're good at otherwise you don't get anywhere, and I had a very good Maths teacher at my high school. And so I managed to get into universities.
[00:02:06] Colin Cohen: Did you enjoy Downing?
[00:02:08] Victor Apps: Yeah it was great three years. I don't think I learnt that much but it was a big part of my education. In those days, it was very much a split in the university between those of us who came through the direct grant route and the posh boys who went to Winchester and Heron all that sort of stuff. And it was two different worlds And the world I was in was great.
[00:02:25] Colin Cohen: Because I arrived slightly after you at Downing. Downing was a law college it wasn't a very sort of science and Maths. But it was right next door to the laboratories and the buildings next door. So you had an enjoyable time there?
[00:02:37] Victor Apps: I had a good time. I wasn't a brilliant student Colin, I didn't get a very good degree but I learnt a lot, not necessarily my lectures but in other ways.
[00:02:46] Colin Cohen: Surprising development, you went off to Canada to work for Manulife. Tell us a little bit about that.
[00:02:53] Victor Apps: The previous summer I'd had a summer job in North America and they were paying so much money in those days, the difference in income levels between Britain and North America at that time was like triple almost. So it's really a financial decision, I said well I'd go over there and I can make a bit of money which I can't make in England at this time. In those days to immigrate to Canada from England was extremely easy if you're a university graduate, and so I did. And I found a job after I arrived with Manulife, and this was just my first job but it just turned out to be my only job.
[00:03:22] Colin Cohen: What did you start off with Manulife?
[00:03:23] Victor Apps: I was a computer programmer back in the days when computer program was just starting to revolutionize business. In Manulife, we had the first system 360 in Canada in the commercial sector. And so we were cutting edge in a sense what we were doing and that turned out to be a very useful background. Because as on all the back office side insurance companies the IT people took over. They took over everything cause they were the only ones who understood how everything worked.
[00:03:48] Colin Cohen: And you spent some 15 years there before you were sent off to Indonesia. What post did you hold before you went?
[00:03:56] Victor Apps: Well I was originally in data processing. And then I moved into general administration and I ran the back office, basically I administration vice president for Manulife who was running all the back offices worldwide. And then I spell, believe it or not, as the controller of Manulife. Even though I'm not an accountant I was actually the controller. And I did that for a few years and I learned an awful lot doing that.
[00:04:16] Colin Cohen: And of course, you met your wife who I know.
[00:04:18] Victor Apps: That's right, yes.
[00:04:19] Colin Cohen: Children were all born in Canada.
[00:04:21] Victor Apps: That's right I have two kids who were born in Canada.
[00:04:23] Colin Cohen: The upheaval to go to Indonesia, what caused that? How did that come about?
[00:04:27] Victor Apps: I did a study myself, we called it international expansion. We're looking at new markets for Manulife to enter into. And I'd come to three or four countries I recommended. And one of them was Indonesia, and it turned out we had an opportunity there, Indonesian conglomerate approaches. I went out to invest investigate it. Basically, I thought "wow what an amazing opportunity". And eventually, I put my hat in the ring and we moved to Indonesia with a two-year-old and a four-year-old. Best decision I ever made in my life,
[00:04:53] Colin Cohen: And what did you do? You ran the Indonesian operation.
[00:04:56] Victor Apps: We started a new operation from scratch. We set up a new company and we grew it very fast. Manulife Indonesia is now a very large company, literally from scratch
[00:05:04] Colin Cohen: you worked and your family started growing up in Indonesia. And then Hong Kong I think it was in 1988?
[00:05:11] Victor Apps: Correct! 88 I moved to Hong Kong.
I was basically given a bit of a promotion. I took over the responsibility for a group of different functions in Manulife in the regional office here. Basically the back office in the territories outside of Hong Kong. And that was my first moving back into the sort of general entrant area which is what I was in Toronto originally.
[00:05:29] Colin Cohen: And Hong Kong?
[00:05:31] Victor Apps: I became general manager of Manulife Hong Kong back that 1990, 1991. And that was exciting because we were growing the Hong Kong operation very large. They've become number one in the market, and they're also the biggest in MPF. There's another business that was very active in setting up our MPF business And so to me it was exciting.
[00:05:48] Colin Cohen: I arrived in 81, into Hong Kong You write a little bit later in 1988.
Your views of Hong Kong pre 97. Take you a long time to settle in or you're used to be working as an expat?
[00:05:59] Victor Apps: It was pretty easy I think coming here. I mean in most ways there's plenty of support systems for expats in those days I'm sure there still is. Not speaking the language has never been a big issue here and still isn't, I don't think. We were always pretty happy here. The international schools here I think are outstanding and our kids went to those and went on to university from there.
[00:06:18] Colin Cohen: I think an interesting role you had was to take Manulife into greater China. That must have been somewhat challenging I would have expected.
[00:06:26] Victor Apps: Oh yeah, of things I look back on doing, one of the most fascinating was a negotiation to enter China. I think I did like 40 trips to China before we got our license talking to various people, not a transparent place in those days. There's no route to getting a life insurance license, you have to figure out your own. Eventually, we did it and we were the second foreign life insurance company and the first with a joint venture. And that was a really exciting time, and yet I always remember our opening ceremony, because, at the opening ceremony, we had the prime minister of Canada was there Chrétien and also the prime minister of China Li Peng at the time. So our opening ceremony in Beijing which was quite unique in those days.
[00:07:02] Colin Cohen: So you continued in Manulife and in 2007 towards 2008 you decided to retire and tell us about your last job.
[00:07:14] Victor Apps: Well my last years I was the CEO for Asia for Manulife It was for quite a few years. That was an exciting time cause we were still expanding fast everywhere. Building in places like Vietnam where Manulife's now number one. China I think it was the most successful joint venture there. Singapore was a major operation as well. Japan, we've got a substantial operation. There was plenty to do
[00:07:34] Colin Cohen: And of course one of your last responsibilities with Manulife was after Manulife became one of the main five sponsors of the Olympic games. And you had the opportunity to look after everybody in Beijing for the Olympics.
[00:07:48] Victor Apps: Like you, I'm a big sports fan. Manulife never actually got that sponsorship, it came to us because John Hancock who was an American company had the sponsorship. They'd signed up for three Olympics and Beijing was the last. So I was given the rather terrifying responsibility of being responsible for all of them Manulife's role in the Olympics. I had a wonderful thing, I had a card that enticed me to go to the IOC box at every event in the Olympics. It's like paradise for sports fans You go to any event no matter how popular it was you could just walk in And it was marvellous.
And great seats as well.
[00:08:23] Colin Cohen: And I took great advantage of that because I also had the opportunity to go to the Olympics.
[00:08:27] Victor Apps: Yeah, we saw you a few times there.
[00:08:29] Colin Cohen: Quite a few times, and actually, actually, I was able to get you a ticket to go to the football with me.
I thought you could have gone, but we sat together.
[00:08:35] Victor Apps: God I even met David Beckham at a basketball game
[00:08:38] Colin Cohen: And then the hotel I stayed in Beijing. I remember being in the lift these massive people, huge. And I was saying to them you play?
Anyway, so you retired. And I think you've been even busier in retirement perhaps than you were working full time. I mean you were the past chairman of the Canadian chamber of commerce and you still remain on the governance council and how's the chamber doing and what's your involvement at the moment?
[00:09:03] Victor Apps: Pretty good, I'm still on the governance council. It's one of the largest foreign chambers in Hong Kong. It's difficult times that the relationships between Canada and China not being at the best since in recent years as you probably know but it's a huge relationship between Hong Kong Canada. Half the people you meet here have got a relative in Canada. And so there are people backwards and forwards all the time. And I took advantage of that when I worked with Manulife. We had a lot of Chinese Canadians who came here and people we sent back and all that sort of stuff.
[00:09:29] Colin Cohen: Of course, you were previously a member of the Hong Kong election committee. And tell us a little bit about your involvement on the election committee at that time.
[00:09:38] Victor Apps: A few years ago now, but yeah I was formerly the chairman of the employers Federation of Hong Kong back in my working days and the employers Federation is one of those groups that have a number of seats on the election committee. I was on it three times, the election committee. Back in the days when we were choosing people like Donald Chang and CY Leung, those sorts of people.
[00:09:56] Colin Cohen: Now, Sunday was the election. And we all went out and voted, I voted. I'm a great believer that you have an election exercise your rights It's fundamental.
And you look carefully at the candidates as you decide who's the best ones to vote for. Your views as to the outcome of the election, as a turnout rate. How do you read things?
[00:10:16] Victor Apps: Well in a sense it was quite boring, I mean the election. In the past, we had real choices and this time there weren't many choices I mean they were all pro-establishment candidates. But the thing that disappointed me is that when I looked at what the people were saying, none of them said anything. They were boring, they would talk about of real import in Hong Kong. Like inequality housing, et cetera et cetera. And what they would say is, "I'm in favour of less inequality, I'm in favour more housing". None of them would say what specific things they should do except in very, very, very, very, very minor ways. I think the main thing that I didn't like about the election was the lack of debate on the issues of Hong Kong. and I think, Hong Kong desperately needs a debate on a lot of issues and you just didn't see it. And we're just tapping the I'm a Patriot and that stuff. That's fine but what do you think we should do in Hong Kong? How should we solve the dreadful situation on housing here? How do we deal with the inequality which is so bad here? Nobody spoke to me on those issues, shall we say.
[00:11:17] Colin Cohen: Yeah, I was hiking and I was coming out the tube station and I asked them what are the policies. And I got the same rhetoric but what I think is going to be interesting I think the jury is out on all of this I'm going to look very very carefully as to how Legco performs. The 90 people, how they debate, how they question, how they deal with policies. And I think that's the important thing to look forward to. Not the past, it is the system, We may not like it, but I mean that's the way forward because Hong Kong could be quite good. if they say what they're going to do well let's see what they do.
[00:11:48] Victor Apps: And a lot of these people yet when you look at the ones elected through the election committee the 40. Nobody knows much about most of those people. So we'll have to see what they do. We've got the situation now that political parties are almost a negative. They shouldn't be, I mean the idea of having a series of different parties that have different views on issues.
[00:12:03] Colin Cohen: So let me sort of development that a bit with you. You have formed the business and professional Federation of Hong Kong, you're currently the chairman.
[00:12:11] Victor Apps: I didn't form it, It's been...
[00:12:12] Colin Cohen: Been around for a long time, okay. And tell us a little bit more, our listeners will be quite to know more about this organization.
[00:12:19] Victor Apps: The BPF originally came out way before my time. Was formed by the members of the Hong Kong advisory committee on the basic law. Before the Basic Law came out a long while ago. And when that committee was disbanded, a number of them got together And started the BPF. And some of them are quite well-known people, Vincent Lo was one of the main ones. He's still the president of the group now. Sir David Akers Jones, who passed away a couple of years ago was also very active in his earlier days. And I just came in later on, it's a think tank where we discuss strictly Hong Kong issues, we don't talk about anything else. The focus of what we talk about is healthcare, housing, inequality, poverty. We talk about MPF, the pension. All that sort of series of issues. They're the things that we focus on.
[00:13:06] Colin Cohen: One of your areas which you have written about and from your experience at Manulife is the Mandatory Provident Fund. I would have thought that this would have come up more in the election but it did not. What're your views on this scheme we have in place?
[00:13:21] Victor Apps: Well I think MPF was set up because what it replaced was nothing. before MPF virtually nobody had a pension in Hong Kong except the government employees. And a few people who were lucky enough to work for 20 or 30 years for one of the big Hongs, they had pension plans but nobody else. And PF was the first universal type plan that they had in Hong Kong that everybody contributed to, and huge supporter of it from day one I was. So was the BPF. The disappointing thing about it is that there's a lot of work that still needs to be done on it. For example, the contribution levels clearly aren't high enough. The 5 plus 5%, 10% in today's world just does not generate a pension you can't put aside 10% of your money for 40 years 35 years of work and expect to survive 30 years of retirement on it, it's not possible, the numbers don't work. Absolute minimum 15 is required but nobody talks about that. Everyone's scared of saying do it in. Our recommendation is that government just start putting some money into it. The government ran MPF on the basis of totally zero cost to them There's 5% employer 5 cent employee. They even took the cost of the MPFA and charge that off to the funds. So they based on the fact cost zero. That's not reasonable, I mean it's quite logical for the government to contribute something to the pension, and our recommendation is they should go to 5, 5, 5. Employers five, employee five, and the government five.
[00:14:48] Colin Cohen: That's a sensible proposition.
[00:14:50] Victor Apps: I think so and that the scandal of course is the offsets. They introduced these appalling offsets to the pension plan when it first came out. And it was done as a compromise to get the business lobby to support it And so I guess from that point of view, just to get it in maybe not a bad idea but at the time What the effect of the offsets is that it's decimating the pensions with the people that most need it because the people that switched jobs a lot tend to be the bottom and not the top end
[00:15:15] Colin Cohen: And just to help our listeners here. Your offsets are very very simple very straightforward. But as an employer put in 5% my employee then leaves or for reason whatsoever gets severance payment and long-term service payment And of course the contributions are set off.
And in essence, they get less.
[00:15:36] Victor Apps: Which is ridiculous, they're basically never got their 5%. And that's a scandalous situation. Now Carrie Lam said three years ago she committed to eliminating that. And it's taking ages and ages to get anything done. They're completely bogged down with this, they call it the eMPF a new computer system, which nobody believes works or everyone's very suspicious of it. And we're concerned in the BPF that they're just going nowhere, they're not looking at the changes that the offsetting thing is still three years away now.
[00:16:05] Colin Cohen: Yeah I want to talk a little bit about the other topic, inequality poverty. You've authored reports, you've written in the newspaper and all of that. And I wrote in my blog, one of my recent blogs, which you told me off actually. And I said that 23.6% of the population was living in poverty and this was reduced just to 7.9% off assistance. And you to task, you think my figures were wrong.
[00:16:32] Victor Apps: It wasn't your figures that were wrong, you were making a mistake and believe in the government for years to come and the government poverty statistics are absolute nonsense. They are not poor, they are absurd.
[00:16:46] Colin Cohen: Tell us why.
[00:16:47] Victor Apps: Well the way they do it. The basic methodology they use is just to take that anybody who has less than half of the median income is in poverty, right. Which is what they use in some of the countries right. So that means in Hong Kong the way they use it it's not median income it's the median salary which is quite different number by the way, because income is salary plus all your other incomes investment income that sort of thing, dividend income, capital gains, all those things. That's what constitutes income. But in Hong Kong, they don't recognize that. they only talk about salaries. They just use the fact if your salary is less than half the average, you're in poverty. Now, this is totally ridiculous for people who are working but it is totally ridiculous for people who are retired because what they do is they say well somebody like me and I'm not poor by any means I don't have a salary. So, therefore, the way they define it, I'm in poverty. Also, they take no assets in their calculation. So it doesn't matter how much money You're in poverty. All they look at is salary. The result is that if you study the government poverty report you'll see that it says that over half the people in poverty, on their measure, owned a property in Hong Kong without a mortgage. Now owning a property without a mortgage is probably the counter definition of poverty, it's the opposite of poverty. So what they do is when you say the number of people in poverty has gone up, all it means is the number of old people's going up. Of course, the number of old people goes up each year. Now the government by having a meaningless measure can then turn around and say to you "Oh, of course, it doesn't work very well" so it hasn't, so you have to count for that. But made no attempt to do it right. And they produce massive long detailed reports about poverty all of which are absolute rubbish.
[00:18:46] Colin Cohen: How would you deal with it. Is inequality here, there is this poverty gap. What's the solution?
[00:18:52] Victor Apps: One of the things is to get decent statistics that could figure out how many people in poverty. And it's not that difficult, you just define that just differently. You define it as some combination of income and assets. Anybody who's got assets above a certain level it's clearly not in poverty. And and and if you do it that way you get a much more sensible number.
It's a joke, it's a joke. The whole thing's a joke.
[00:19:14] Colin Cohen: Hopefully the new Legco people will look at it and the new people who've been elected and might come up with some policies that could...
[00:19:20] Victor Apps: I think the people on the poverty commission ought to do so. You've got a whole bunch of noble well known Hong Kongers on the poverty commission. They just sit there and ignore it.
[00:19:28] Colin Cohen: Let's move away from these sort of vexed and difficult political issues. And talk a little bit about some of your passions here and I know one of your big passions is collecting stamps. I have it on good authority that you've amassed a huge collection of stamps here you're rather a hoarder, you don't keep it forever and ever. Tell us a little bit about that I'm interested in that.
[00:19:48] Victor Apps: I find it a fascinating hobby, I just I've got a massive stamp collection as you say like 600 or 700 albums nowadays. It's a worldwide collection of all things. It would fill up this whole wall here, I just love doing it I find it interesting because when you look back at old stamps you learn a lot about the history of the places as well because at any given point the stamps of a place reflect what the current political system is and who's in charge.
[00:20:11] Colin Cohen: It keeps you occupied.
[00:20:12] Victor Apps: Very much so so it's been great during Covid actually.
[00:20:15] Colin Cohen: And one of your other passions, you're a massive sports enthusiast. What made you go for that wonderful team in West London Fulham cause I'm a massive Chelsea fan.
[00:20:25] Victor Apps: Well I was brought up in Fulham, and what's the station railway station, Fulham Broadway. Of course, it is. Chelsea is actually the other Fulham team. We call it.
[00:20:33] Colin Cohen: There is only one team in West London by the way.
[00:20:36] Victor Apps: And so in Fulham, everybody was either Chelsea supporter or Fulham supporter. But the house I was brought up was three streets away from the Fulham grounds. And I went to primary About 200 yards from the Fulham ground. It was actually automatic, you wouldn't dare be anything else, to be honest in school in those days. And so I became a Fulham supporter when I was like five years old And I've been supporting them for 60 something years.
[00:20:59] Colin Cohen: My team is not top of the premiere and your team is top of a championship despite a recent little dip and form but you have a habit of going up and down it's a wonderful habit.
[00:21:10] Victor Apps: It's a yoyo team we're never boring. Last four years have either gone up or gone down. And this year we might get up again So it'd be nice to settle in the premiership a little bit again but...
[00:21:18] Colin Cohen: And also you and I have a sort of record, both you and I have been to the Rugby World Cup Finals, the Cup Finals, the Cricket World Cup Finals.
[00:21:28] Victor Apps: I beat you though because I was at the World Cup Final when England won in 1966. England was at three World Cup Trials. I was at all three. I was at the rugby when they won it in Australia.
And I was at the cricket when they won it in England.
[00:21:42] Colin Cohen: I was there as well.
[00:21:44] Victor Apps: You got two out of three
[00:21:45] Colin Cohen: I got two out of three
[00:21:45] Victor Apps: But you can't go back and do 66.
[00:21:47] Colin Cohen: I can't do that.
[00:21:48] Victor Apps: I was 18 years old at the time.
[00:21:50] Colin Cohen: And of course, you're a big Formula One fan and you enjoy your sport. COVID, we're watching it on TV but you hope...
[00:21:55] Victor Apps: Not the same, we watch the Olympics on TV. I would have gone to Tokyo for sure it's the Olympics.
[00:22:00] Colin Cohen: Yeah we were all booked to go to that as well in respect to matters. In conclusion, I always ask my guests on this podcast. you've lived in Hong Kong for numerous years. Is it your home? Do you intend to stay? How do you feel about that?
[00:22:14] Victor Apps: I'm still very comfortable here. I've been here since 1988, it's home. most of my friends are here, if I go somewhere else I'd have to start from scratch in a sense. It won't be the same and as long as it stays reasonable. I have red lines on things that would worry me about Hong Kong that made me not want to be here. For example, if I can't use my Gmail account.
I can't go on the web and things like that. So they're the sorts of lines I have. But I think we have at least a reasonable degree of freedom living here. And as long as that stays I will stay
[00:22:44] Colin Cohen: I mean we've been through some turbulent times in recent years, your thoughts for the future?
[00:22:49] Victor Apps: I think Hong Kong is going to do quite well It's going to be a different Hong Kong. Obviously much more focused on China and the future of Hong Kong depends on an awful lot on what China wants to do with Hong Kong. How much they want to use it as their gateway to the world, and how much they don't. That's the most important thing, the attitude of the mainland I think.
[00:23:07] Colin Cohen: And I hope that the border will re-open. Some sort of travel is going to take...
[00:23:12] Victor Apps: Yeah all the borders open and we can get these rather extreme quarantine rules in Hong Kong could do with a bit of reduction I think.
[00:23:20] Colin Cohen: I think Everyone is on the same page with that. Victor It's been a great pleasure talking with you. Thank you so much for joining Law & More.
[00:23:30] Victor Apps: Thank you Colin Thank you very much.