Chapter 231: In-Depth Cooperation with HSBC
After lunch, the two enjoyed another round of "deep communication."
By around 3 p.m., the two of them were lying on the bed watching TV.
Bai Yushan suddenly asked, "Brother Dong, are you planning to open a hotel?"
"How did you know?" Yang Wendong asked curiously.
This was still considered a confidential project within Changxing Real Estate. Very few people knew about it.
Bai Yushan replied, "Well, we at HSBC naturally know quite a bit about what the colonial government is up to."
"That makes sense," Yang Wendong nodded in agreement. Even if the government tried to keep things under wraps, it was unlikely they would withhold such information from a 'quasi-central bank' like HSBC. After all, HSBC practically functioned as a semi-governmental institution.
He followed up, "So how exactly did you find out?"
Bai Yushan answered, "Someone like me wouldn't have the clearance. It was Mr. Saunders who told me. I think he wanted to use me to get in touch with you. If you're involved, HSBC definitely wants a piece of the action."
"That old fox, quite perceptive." Yang Wendong chuckled.
Their relationship was no secret, and plenty of people in HSBC's upper management were already aware of it.
And with a deal valued at tens of millions of Hong Kong dollars, there was no way a bank like HSBC wouldn't be interested. After all, it was still a commercial bank at its core.
Bai Yushan continued, "Whether or not you want to work with HSBC is up to you. I'm just passing on the message."
"Haha, no worries. I've got a good grasp on things," Yang Wendong replied with a smile. "This project will go to whoever offers the best terms."
He did lean toward choosing a Chinese-owned bank, but that didn't mean he would outright reject the British ones. Getting price quotes from all sides didn't hurt—in fact, it gave him leverage over the Chinese banks.
And if the British banks offered better terms? Even better. Though unlikely, since banks like HSBC and Standard Chartered typically had higher interest rates despite their larger scale.
"Got it," Bai Yushan nodded.
Yang Wendong added, "But there's another project you can let HSBC know about."
"What project?" she asked.
"I'm planning to build a shipyard and ship repair facility in Tsuen Wan," Yang Wendong said casually.
This wasn't a major secret. Once an agreement was made with the colonial government, it would have to be made public anyway.
"Oh, I see." Bai Yushan nodded. "So you're planning to work with HSBC for your shipping company, and with a Chinese bank for your real estate company?"
"More or less," Yang Wendong replied. "It's not set in stone. If the terms offered by each bank are about the same, that's how I'll split things."
"Alright, I'll talk to Mr. Saunders about it tomorrow," Bai Yushan promised, then asked, "Why are you going through me for this, though?"
"Consider it a way to boost your performance at the bank." Yang Wendong smiled. "You may not be with HSBC long-term, but since you're there now, you might as well make the most of it. Besides, if I contribute to your performance, it'll make your job easier."
Banks in any era had performance requirements for their employees. HSBC was no exception. Even as a "quasi-central bank," its shareholders weren't going to complain about making more money, and neither would upper management—especially if it meant larger bonuses for them.
"Alright," Bai Yushan nodded.
"How about another round?" Yang Wendong teased, clearly still full of energy.
"The fourth time? Are you even physically capable?" Bai Yushan replied with a laugh.
"Hmph, I'm a Kui Niu!" Yang Wendong declared confidently as he rolled over again.
…
The next afternoon, at the Peninsula Hotel:
Yang Wendong remained at the Peninsula Hotel but switched to a different suite. The one he used yesterday was his long-term rental and personal space.
"Mr. Saunders, good to see you," Yang Wendong greeted with a polite handshake.
Saunders returned the gesture and smiled, "Mr. Yang, congratulations on becoming Hong Kong's newest Chinese real estate tycoon."
"You flatter me," Yang Wendong replied. "We property developers wouldn't have grown so fast without the support of banks like HSBC."
Earlier this month, a local tabloid had published a report listing the total property holdings of various real estate companies in Hong Kong. Naturally, Changxing Real Estate ranked near the top.
The bulk purchases in Kwun Tong at the start of the year, the acquisition of seven buildings from the Liao family on Hong Kong Island, and the ongoing development of residential communities—all of this was impossible to keep hidden from determined investigators.
Still, this ranking only reflected floor area. Kwun Tong properties were worth a fraction of what Central properties were. When compared to the prime land held by British conglomerates, Changxing's portfolio still had a long way to go.
"Haha, of course," Saunders chuckled. "Our bank also benefits from your success."
After sipping his coffee, he continued, "Mr. Yang, I've heard you're planning to bid on the land at No. 2 Queen's Road?"
"That's right," Yang Wendong replied. "With such a prime location, which real estate company wouldn't be interested—assuming they've got the capital, that is."
Despite the land parcel being designated for hotel development, many major financial groups were interested: British firms, several local Chinese companies, and even some foreign investors.
Saunders nodded. "Indeed, it's a prime location. If I were in real estate, I'd want it too. Since you're planning to acquire it, you'll probably need bank support. At HSBC, we'd be more than happy to back you."
"Thank you." Yang Wendong smiled, then asked, "But doesn't HSBC typically support British companies? Jardines and Swire are also in the running this time."
"HSBC supports everyone," Saunders said with a laugh.
"Haha, fair enough," Yang Wendong replied. He understood that no smart player put all their eggs in one basket. "If the terms are good, I'll definitely consider working with HSBC. But regarding my shipping investment in Kwai Chung—that's the one I definitely want to collaborate with HSBC on."
For real estate projects on Hong Kong Island, whether he went with HSBC or a Chinese-owned bank didn't make much difference. In fact, Chinese banks often offered slightly better conditions—assuming they were willing to lend a large enough amount.
However, Changxing Shipping's future would require significant foreign exchange and involve international business, making HSBC or Standard Chartered much more suitable partners.
Saunders nodded. "That reminds me—I have a question about your shipyard in Kwai Chung. You're planning to take on outside clients too, correct?"
"Of course," Yang Wendong replied. "With just my own handful of ships, there'd be no need to build an entire shipyard. I'll definitely open it to outside business."
Saunders asked again, "Then how do you plan to compete with established shipyards like Swire and Whampoa?"
"That's easy," Yang Wendong said. "First, those old shipyards operate with extremely high profit margins. If I want to compete, I can undercut them slightly and still make a good profit myself.
"Second…"
"And second," Yang Wendong continued, "I have immense confidence in Hong Kong's economy and the future growth of the maritime shipping industry. I believe more and more ships—both local and international—will pass through Hong Kong. Meanwhile, shipyards like Swire and Whampoa are already surrounded by fully developed land, making expansion impossible."
He didn't mention the future development of container terminals—naturally, that was a confidential part of his foresight—but everything else he said was true. The rapid growth of Hong Kong's maritime industry had only just begun.
Take the so-called "shipping tycoons" of today, for example. Their fame was still mostly limited to Hong Kong, and they hadn't yet achieved global recognition. But in the 1970s and 80s, names like Pao Yue-kong, Tung Hao-yun, and Chao Tsong-yea would become bona fide world-renowned shipping magnates.
With Hong Kong's fleet set to expand dramatically, demand for shipyard services would inevitably follow. And on top of that, Yang Wendong's own plans to grow Changxing Shipping meant he too would one day become a ship king.
"Mr. Yang truly believes in Hong Kong's future," Saunders remarked with a smile. "Actually, I do too. Under the glory of Her Majesty the Queen, I believe Hong Kong is destined to become the Pearl of the Orient in Asia."
"." Yang Wendong didn't respond to that directly. There was no point in pushing back—after all, he was still operating under the British colonial system for now.
Saunders changed the subject slightly. "Mr. Yang, I hear you're also planning to purchase new ships from Japan?"
Yang Wendong nodded. "Yes. I heard HSBC has already begun working with some of Hong Kong's shipowners. I was wondering if the bank would also be open to working with me?"
A new ten-thousand-ton vessel could cost several million US dollars, especially if it had custom specifications. All of it had to be paid in foreign currency—something local Chinese banks simply couldn't handle at this scale.
Saunders nodded. "Yes, we've already partnered with Mr. Pao Yue-kong. He's someone we see great potential in. You've heard of him, I assume?"
"I haven't met him, but of course I've heard the name," Yang Wendong replied.
Hong Kong wasn't that big, and there weren't many people who could afford large vessels. Even if Yang hadn't been a time traveler, anyone in the shipping business would know all their competitors.
"Mr. Pao operates a little differently from most shipping magnates," Saunders explained. "He leases ships to Japanese companies at relatively low rates but on long-term contracts. Internally, we view this as a lower-risk model. Most other shipowners prefer short-term leases. When business is good, they make a fortune—but when it's bad, they lose just as much. It's far riskier. Which method are you considering?"
Yang Wendong asked, "You'd prefer I adopt Mr. Pao's model?"
"Yes," Saunders replied. "We've already established partnerships using that structure, so if you follow the same model, it would simplify things significantly. Also, according to Japanese policy, you could get a partial loan from a Japanese bank. With that kind of setup, Japanese banks are much more flexible."
"That does sound like a solid approach," Yang Wendong agreed after a moment of thought. "But for the next few years, I won't be using that method—maybe later on."
In the shipping industry, even a one-year lease doesn't count as long-term. Mr. Pao typically signed five- or ten-year contracts.
If Yang didn't have knowledge of the future, he absolutely would've adopted Mr. Pao's strategy.
But with the golden window of opportunity coming in 1967—and lasting for about five years—by the time he ordered a ship and waited for it to be delivered, a long-term lease would cause him to miss the real profits.
"I understand," Saunders said simply. "In that case, we'll need to implement certain restrictions on our end."
"Restrictions?" Yang Wendong narrowed his eyes. "So it's still possible to cooperate?"
Saunders nodded. "Yes, but only under special conditions tailored for you, Mr. Yang. You would need to act as a personal guarantor. If you do, HSBC can lend you the funds to purchase new ships from Japan."
"A personal guarantee?" Yang Wendong didn't hesitate. "That's fine. I'll sign."
Legally speaking, collateral-based guarantees limit the bank's ability to pursue further claims if there's a default. They can only recover the pledged asset.
But for Yang Wendong, that wasn't very meaningful. Even if one of his ventures failed and he couldn't repay the bank, he wasn't the type to simply walk away. That would damage his reputation.
And besides, as a time traveler who knew the future, he understood that the shipping business wouldn't really face losses until after 1973. By then, he would've had over a decade to grow his other ventures. Even if shipping failed, he could easily absorb the losses.
"Good," Saunders said with a smile. "If it were anyone else, I wouldn't agree to this arrangement. But I have high hopes for Changxing Industrial. Based on your rapid growth over the past few years, I'd be happy to develop a long-term relationship with you."
"I feel the same," Yang Wendong replied. He understood perfectly well that HSBC was now looking to build long-term partnerships with promising Chinese entrepreneurs.
Historically, the bank had first supported Pao Yue-kong, then later Li Ka-shing—both of whom had gone on to tremendous success.
That reminded him of something. "Mr. Saunders, what if I wanted to acquire a British-owned company? Would HSBC be able to help?"
"A British company?" Saunders was clearly surprised. He glanced at Yang Wendong and, seeing no hint of a joke, thought for a moment before replying, "Definitely not if it's a large firm. But small ones? No problem. Medium-sized companies—if they're willing, HSBC would be happy to help.
But if you're talking about hostile takeovers, Mr. Yang, I'd advise caution. There are many ways to make money in Hong Kong. No need to stir the pot unnecessarily."
"Of course," Yang Wendong smiled. "I was just asking. And if I ever do pursue one, I'd only go the route of a friendly acquisition."
In the 1960s, attacking British interests wasn't feasible the way it would be in the late 1970s.
However, during this decade, many mid-sized British firms in Hong Kong were struggling or even looking to sell. If he could negotiate friendly takeovers—especially with HSBC's support—it would be far more secure.
"I'm glad to hear that," Saunders said with satisfaction. "Once you know how many ships you want to buy, put together a full proposal for us. My suggestion would be to start small. Internally, we need to see some results before we can expand the relationship."
"No problem," Yang Wendong replied. "I'll need to visit a few shipyards in Japan before I can finalize the details."
Each ship could cost upwards of one to two million U.S. dollars, sometimes more. With such large sums involved, it was only natural he would handle it personally.
Shipping was a capital-intensive, high-risk industry—far more so than real estate. But the returns were just as high.
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