He was 63.
The Financial Times newspaper, for which he wrote a popular tongue-in-cheek advice column, reported Tang's death in a story today. Tang had fought a long battle with cancer and died last night at the Royal Marsden Hospital in London with his wife Lucy at his bedside, the newspaper said.
"David Tang was a remarkable man of many talents whose charm, erudition and wit were ever present," the article quoted the newspaper's editor, Lionel Barber, as saying. "He will be sorely missed."
Tang was knighted in 2008 for his charitable work in both Britain and Hong Kong, the same honour his grandfather, businessman and philanthropist Tang Shiu-kin, also received.
He is best known for starting the Shanghai Tang luxury brand, which pioneered the use of Chinese retro design symbols as fashion motifs, and later sold it to the Swiss luxury holding company Richemont.
He also caused a stir by opening the members-only China Club in 1991 on the top floors of the old Bank of China building in Hong Kong's financial district.
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