Exports: Trading Up

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That's a lucky thing because in the globalized manufacturing jungle, it's not survival just of the fittest but also of the nimblest. When Fung took the firm public in the early 1970s--the first Chinese trading company to list on a stock market--he displayed his knack for timing. Unencumbered by generations of cousins and uncles, Fung was able to take advantage of the dawn of the roaring Asian tigers, moving his manufacturing operations to Taiwan and South Korea, then Thailand, Indonesia and the Philippines, networking with Asia's entrepreneurial Chinese diaspora. Today about half the firm's manufacturing is done in China. "The truth of the matter is, as things shifted, we were better at doing things because we are Chinese," says Fung. "We didn't have to go through interpreters."

The extended Fung family, which controls 42% of the company's equity, still plays an important part in the business. William's eldest brother Victor--a former Harvard Business School professor whose name is often raised as a possible future leader for Hong Kong--is chairman. At the family's weekly Sunday brunches at a mountainside luxury tower that houses three generations of Fungs, the brothers usually pair off to talk shop. But unlike many other Asian companies, which are treated as opaque clan fiefs, Li & Fung produces a straight-talking triennial three-year plan, and the brothers are regularly ranked as top managers in Asia.

Ironically, some of the brands Li & Fung is snapping up are the very ones it helped doom: American labels that were slow to export manufacturing overseas. Last year it acquired the license to sell Royal Velvet, a home-textiles brand that went bust in '03. "We wanted a company that knew how to source overseas," says Rick Platt, managing director of Official Pillowtex LLC, which bought the bankrupt firm.

William Fung has a clear idea of where all this streamlining will lead. "In 10, 20 years, consumers will buy directly from the factory over the Internet," he says. "We want to be the people operating it." The new Fung recruit, meanwhile, already shows some attributes needed in the fast-paced global industry. He has a penchant for fast cars (he zips around in one of his two black souped-up BMW M5s) and air travel (he writes a private blog about his plane trips). "It's good to be here," Terence says. A techie who once ran his own online venture, Terence may have just the right experience to help spark a new manufacturing revolution.