Chapter 195: The Panicked Foreign Traders
In an office in Central, Hong Kong Island, Steve sat gracefully reading an English newspaper. Nearby, a few other white men were playing poker.
"Haha, Steve, I won again!" one of the foreigners laughed in triumph.
Steve set down his newspaper and smiled. "Ted, it's only a few bucks—and in Hong Kong dollars no less. Is that really worth celebrating? How about I take you to Macau for some real fun?"
"I'm not going," Ted shook his head. "I don't gamble. A few bucks is my limit."
Another man laughed and chimed in, "Ted, the price of plastic pellets has surged recently—you must have made at least a few hundred thousand. Why are you still being so stingy?"
Ted replied, "It's about principle. I don't gamble—it's not about the money. But if you get me a blonde girl, I wouldn't mind spending a little extra," he added with a laugh.
"Hahaha!" The room erupted in laughter. Steve grinned and said, "That's easy. I know a hotel that can fulfill all your fantasies."
"You're a true brother," Ted laughed.
Suddenly, the office door burst open. A man with dark brown hair walked in, holding several newspapers in his hand. His expression was grim as he approached.
Steve noticed something was off and asked, "Fisher, what's going on?"
Fisher reached them and spoke with a tight face. "We're in serious trouble. That Changxing Industrial—they just shipped in a full load of plastic pellets directly from overseas. I estimate at least several thousand tons."
"Several thousand tons?" Steve's face changed. "Where did they import it from? Japan? I thought Japan didn't have enough plastic to spare—they import too, don't they?"
Fisher replied, "From the United States."
"The U.S.?" Steve frowned. "That's a long haul. Ocean freight costs wouldn't be cheap. Plus they'd need warehousing and logistics on the American side. Doing all that must be more expensive than buying from us, right?"
Fisher shook his head. "Under normal circumstances, yes. But what if they have their own ships? Look at this newspaper."
He tossed the paper on the table. Ted and Steve glanced at it—it was in Chinese. They usually didn't read Chinese-language papers. Though they could recognize some characters, it was too complicated for them.
Steve picked up the paper and flipped through it, murmuring, "Turns out that a few months ago, Changxing Industrial founded a shipping company. I wouldn't have known if I hadn't seen this—haven't read a Chinese paper in ages."
Fisher nodded. "Exactly. They send their own goods to the U.S., then bring back plastic pellets on the return trip. That way, they don't need us anymore."
"Hm…" Steve thought for a moment before saying, "Don't worry too much. This isn't a surprise to me."
Ted asked in confusion, "Not a surprise? What do you mean?"
Steve explained, "Changxing Industrial has been scaling up rapidly. You've all seen their newest product—the luggage cases. Honestly, anyone who's seen one wants to buy one, right?"
"Absolutely. That Eric Yang is ridiculously inventive," Ted agreed.
Steve continued, "When companies reach a certain size, it's inevitable that they'll bypass traders like us and go directly to manufacturers.
It's the natural progression for any major enterprise. If Hong Kong had its own plastics producers, they would've cut us out long ago."
"You've got a point," Ted nodded slowly.
Steve smiled again. "So we don't need to panic. Losing a major client is a blow, sure, but it's part of the game. The fact we made good money from them for a year or two was already a win.
Besides Changxing, there are still hundreds of plastic processing factories in Hong Kong. And business has only been getting better lately—especially in toys. We'll keep making money."
"Yeah, you're right." The others started to relax, and laughter returned to the room—except for Fisher, who remained grim.
Noticing this, Steve asked, "Fisher, what's wrong? You still don't believe me?"
"No, I believe everything you said," Fisher said slowly. "But that Eric Yang… it's clear he doesn't just want to buy for himself. He's invited a large number of local Chinese plastic manufacturers to visit his warehouse. I think you know what that means."
"What?" Steve, normally calm, went pale. "He wants to sell plastic pellets to other local Chinese factories?"
Fisher sighed. "What else? You think he's just showing off?"
Ted's expression turned furious. "That's not right! For decades, importing plastic pellets has been our business. It's fine if he wants to build his own factory, but why is he trying to steal our trade?"
Steve frowned deeply. "Don't panic just yet. Sure, they have their own ship, but ocean freight from the U.S. is still expensive. And U.S. suppliers aren't going to sell at a loss either—they need to make a profit too."
Fisher shook his head. "But if he dares to take this step, he must have figured out a way to control his costs."
Steve thought for a moment. "Maybe it was our price hike that gave him this opening. Perhaps… we should lower our prices, revert to the previous level."
The room fell silent.
"That would tank our profit margins," one of the men finally muttered.
"Lower profits are better than losing the entire market," Steve said sharply. He knew how greed worked and how hard it was for people to let go of high margins.
Then he added, "Fisher, you're best at gathering intel. See if you can find out how much it's costing them.
Even if we can't get the exact numbers, if he's selling to local factories, we should be able to estimate from the selling price."
"Alright," Fisher nodded. "It won't be easy to find their internal numbers, but if they're selling to other Hong Kong companies, I'll get a handle on the pricing."
Steve nodded. Then he turned to the others and said, "There's no need to panic. Our factories are in Southeast Asia, which gives us a huge advantage in shipping costs compared to the U.S.
If it comes down to a price war, they can't beat us."
"But if it really comes to that, our profits will shrink way too much," several of the foreigners complained again.
"There's no way around it," Steve said, shaking his head. "This can only end one of two ways. Either we engage in a price war for a while. We have lower costs, so we can force this Eric out of the business—but if we ever want to sell him raw materials again, it'll have to be at much lower prices.
Or… he joins us. We set prices together, and he becomes one of us."
"Let a Chinese into our circle?" Ted frowned.
Steve countered, "The Chinese are getting stronger by the day. Even the colonial government is trying to court them. What more do you expect?"
"Fine," the other foreigners reluctantly agreed.
...
About three kilometers east of the Kowloon Wharf, outside a large warehouse, a crowd of 70 to 80 people had gathered.
Yang Wendong walked out from inside and greeted them with a clasp of his hands and a smile. "Welcome, everyone."
There were simply too many people, most of whom he didn't know, so this was the best he could do in terms of greeting.
"Hello, Mr. Yang," the crowd replied politely, many of them returning the traditional hand gesture and smiling back.
"Please, come inside," Yang gestured toward the warehouse doors. "Let's take a look at the goods first, and we'll talk business afterward. Sound good?"
"Sure," replied the man at the front of the group, a gentleman with black-rimmed glasses—none other than Li Ka-shing of Cheung Kong Holdings.
Everyone followed Yang and Wei Zetao into the warehouse.
What greeted them inside were row upon row of tightly packed bags, each clearly labeled, neatly arranged with wide enough aisles between them for everyone to walk around and inspect the inventory.
Many of the guests began to notice the labels, and upon closer inspection, a low murmur of discussion spread throughout the group.
After observing for a while, Li Ka-shing walked over to Yang and asked, "Mr. Yang, how many types of plastic do you have stored here?"
Yang replied, "Thirty-seven in total. Six are for my own use. The rest are based on demand from the Hong Kong market—I prioritized the top categories, and the quantities were procured proportionally to local demand."
Li Ka-shing immediately understood Yang's intent. "So how many tons in total?"
"About 8,000 tons," Yang said with a grin.
Shipping hollow plastic luggage boxes was limited by space, but solid plastic pellets were constrained by weight. The Shun An was a ten-thousand-ton freighter—plenty capable of carrying that much.
This volume far exceeded the needs of Changxing Industrial, at least for now. That was precisely why Yang had brought in extra inventory for the rest of Hong Kong's plastic factories.
It was a good excuse to start a new line of business, and the factory under construction in Taiwan wasn't just being built to supply Changxing—it was intended to support the entire Hong Kong market.
Li Ka-shing's expression changed slightly. "Mr. Yang, are you planning to dominate Hong Kong's plastic pellet supply?"
"Haha, that's the idea," Yang replied cheerfully. "But it's also a good thing for all the local factories. My prices will definitely be cheaper than those from the foreign trading firms."
Li Ka-shing nodded but continued, "Mr. Yang, I don't know much about shipping. Isn't transporting pellets all the way from the U.S. quite expensive, even if you have your own ship?"
"It is expensive," Yang admitted. "But I have my own ways of controlling the cost—that's a trade secret."
"Understood," Li didn't press further.
As the visitors explored the warehouse, many found the types of plastic their factories regularly used.
By noon, Yang led the entire group to a large but modestly furnished office in an adjacent warehouse. Rows of simple chairs were arranged for seating.
Once everyone was seated, Yang stepped to the front and spoke clearly:
"Gentlemen, since the opening of Hong Kong's port, aside from goods we could import from the mainland, most of everything else has been controlled by British trading firms.
Plastic pellets, one of the most basic industrial materials, have been no exception. I'm sure many of you have suffered under their pricing. They raise prices as they please, and all we can do is accept it.
So, what I'm proposing is simple: we Chinese will go overseas and buy plastic pellets ourselves. We'll ship them back, and sell them to everyone here at a fair price."
"How much cheaper will your 'fair price' be compared to the current trading firms?" someone asked.
"Yeah, how much?" others chimed in. Everyone understood Yang's motives clearly—what mattered most to them was the price.
Yang gave a nod to one of his aides, who began distributing a stack of documents to the group.
"As you'll see in the sheets," Yang said, "for the next six months, our prices will be about 10% cheaper than what you're currently paying the foreign firms."
"Six months?" Li Ka-shing reviewed the types of plastics he regularly purchased. They were indeed cheaper than the standard market rate. He then asked, "And after six months?"
"After that, we'll reassess," Yang replied. "Plastic prices are affected by many variables, so I can only guarantee a fixed rate for the short term."
In truth, plastic prices fluctuated all the time. But Yang wanted to grab the market quickly, so he'd set prices for half a year upfront to attract customers.
Another man asked, "Mr. Yang, the amount you showed us in the warehouse just now isn't enough to meet all of Hong Kong's demand. When will the next shipment arrive?"
"Rest assured," Yang said. "My ships will be heading back to the U.S. very soon. The next batch should arrive before Chinese New Year."
"But even so," the man pressed, "will the quantity be enough?"
Yang laughed. "Maybe not right away. We're just getting started, after all. Meeting the entire market's demand will take some time. I hope everyone can be patient.
Next year, we'll be purchasing more ships. By then, we'll easily be able to supply all of Hong Kong."
That answer put everyone at ease. They resumed their discussions among themselves.
Yang quietly stepped away with his team, giving the group space to speak freely without the seller in the room.
...
Midday.
Back in Yang Wendong's office, Wei Zetao entered with a wide grin. "Mr. Yang, aside from the plastic we set aside for our own use, everything else has been bought up."
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