Chapter 437: A Decisive Victory in the Financial War
"What kind of external cooperation are you offering?" Ross asked with growing interest.
If you wanted to break into the Hong Kong market—or any foreign market for that matter—the best strategy was always to partner with a local giant. Not only would that give you access to large-scale projects, but such collaborations served as demonstrations for others to follow, opening the door to wider business opportunities.
The problem was, these kinds of collaborations were hard to secure. Most major local enterprises had long-standing partnerships with local banks, tangled in deeply rooted networks of shared interests. For foreign banks to enter, it was nearly impossible.
But Yang Wendong was different. He was a rising star of the past decade, a new force in Hong Kong. While he did work with some local banks, his ties weren't yet entrenched. That made him a more accessible and flexible partner for foreign institutions like Citibank. Plus, Changxing Group's overseas sales were phenomenal—something Citibank knew all too well. To them, Yang Wendong was an ideal strategic partner.
"I can promise that three years from now, Changxing Group will borrow no less than 10 million U.S. dollars from Citibank, with proper collateral," Yang Wendong stated calmly.
He would need massive funding once the real estate crisis in Hong Kong fully erupted. It was a perfect opportunity to buy low. And that required debt. Turning that future need into a bargaining chip now was a strategic move—especially since banks saw low-risk lending as a goldmine.
"Ten million dollars?" Ross's interest clearly deepened. "Alright. So what do you need me to do?"
Yang Wendong smiled. "It's simple. You come with me to Hang Seng Bank headquarters. There will be reporters present to photograph you, me, and the chairman of Hang Seng together. That's all.
After that, don't give interviews. If pressed, just say 'no comment.' The key is to neither confirm nor deny anything."
"And how long do I have to keep up the silence?" Ross asked.
"One month," Yang Wendong replied. "If Hang Seng can't resolve its issues in that time, it's finished anyway."
A bank run, after all, was like cancer. If you didn't crush it early with overwhelming force, it metastasized uncontrollably. Most runs only gave you a week or two to fight back. Survive that window, and things usually stabilized.
"Fair enough. When do we go?" Ross asked.
"We can go right now," Yang Wendong said with a smile.
Soon after, the two of them arrived at Hang Seng Bank headquarters. As planned, He Shanheng was waiting at the front entrance, accompanied by several senior executives. A crowd of journalists had already gathered, and they eagerly began snapping photos as soon as they saw the trio.
"Who is that foreigner? Yang Wendong is escorting him personally, and He Shanheng is out here in person to greet him?"
"Yeah, he must be someone important. Look at the way He Shanheng is smiling—like he's meeting the Governor of Hong Kong himself."
"That's Ross from Citibank's Hong Kong office. I've seen him before. He rarely appears in public."
"Citibank? Why would Citibank be at Hang Seng? Are they acquiring it? Investing?"
"Whatever it is, this is huge news!"
The media was buzzing with speculation. The wave of bank runs hitting Hang Seng and Bank of East Asia had already been dominating headlines. With Hang Seng being the largest of the Chinese banks—and Yang Wendong now involved—there were already enough unknown variables in play. Now, with Ross making a rare appearance, the story just exploded.
Ross was merely playing his part, but He Shanheng treated him with the utmost respect, even giving him a personal tour of the headquarters. The two chatted and laughed about future opportunities for cooperation.
In truth, banks weren't always competitors. Often, they formed syndicates to finance massive projects together—sharing both profits and risks.
An hour later, Ross left the bank, escorted by Yang Wendong and He Shanheng, with photographers capturing every moment.
Back on the top floor, Yang Wendong made a call. After hanging up, he turned to He Shanheng and said, "Several newspapers have just confirmed they'll run a special edition this evening covering today's visit. By tomorrow, over half of Hong Kong's Chinese-language newspapers will feature this story. By noon tomorrow, most people paying attention to Hang Seng Bank will believe Citibank is preparing to invest or acquire shares."
"Incredible," He Shanheng exclaimed. "I never realized how powerful media control could be. I used to think it was just about selling ad space."
"Advertising is the least of what media can do," Yang Wendong said with a grin. "Sure, most outlets only make money that way, but in the hands of someone with capital, media becomes a weapon."
Like a firearm—it could be useless in the hands of an amateur, but devastating when wielded by a trained professional.
He Shanheng nodded. "According to this morning's numbers, fewer people showed up to withdraw money today compared to yesterday. It's not much, but it's a trend.
With today's news, and another media push, I think we'll make it."
"Your offer to raise interest by 1% probably helped too," Yang Wendong added. "But even if we get through this, Hang Seng will have taken a serious hit."
No bank walks away from a run unscathed. Even Liu Chong Hing Bank still existed, and the Liu family was still involved. But they had shrunk to the point where they were no more than a small lending house.
"That's true," Yang Wendong continued, "but Hang Seng didn't lose any branches or major assets. Its foundation is intact. If we pull through this, recovery won't be difficult.
And once we've survived a bank run, the public will trust Hang Seng even more."
Indeed, sometimes surviving a crisis was the best branding a bank could ask for.
"I certainly hope so," He Shanheng said with a bitter smile.
These days, he could barely sleep at night. If it weren't for his good health, he might have ended up like Liu Baoshan—completely broken by the pressure.
Yang Wendong added, "We can't let our guard down yet. Even though we control the media now, good news travels slowly, bad news spreads like wildfire. A single harmful rumor about Hang Seng can undo the effect of ten positive ones."
People naturally paid more attention to negative headlines. That was why, in his past life, social media was filled with rage and anxiety—TikTok endlessly fed people clips of unsettling news. That was also why it was so easy to spread rumors and so hard to correct them afterward.
"That's true," He Shanheng agreed. "Then I'll leave it to you, Mr. Yang. Once things return to normal, I promise Changxing Media will receive a generous advertising contract."
"Of course," Yang Wendong said with a smile. It was only fair.
Even though he was a shareholder, he was deploying his personal resources to help a joint venture. That kind of support naturally deserved compensation.
At HSBC headquarters in Hong Kong, Sanders frowned as he read the morning paper. "Citibank is involved now. Shen Bi, what do you make of this?"
Shen Bi, the middle-aged executive addressed, replied, "Citibank doesn't have much influence among the general population in Hong Kong, but the middle class and upper-middle class know who they are. Whether or not it's true, this news will stop many wealthy people from withdrawing their deposits.
That will significantly reduce Hang Seng's cash flow pressure. With their current liquidity, they just might survive. If the run slows down thanks to media coverage, the worst may be over—unless we escalate."
"What kind of escalation?" Sanders asked.
Shen Bi answered, "HSBC could publicly announce that we are suspending foreign exchange services to Hang Seng Bank, citing concerns over their liquidity."
"If we do that, we're personally stepping into the battlefield," Sanders frowned. "If we fail, we'll become the sworn enemy of every Chinese bank in Hong Kong. They'll all turn to Standard Chartered or even Citibank instead. Even if they can't leave us immediately, they'll start planning their exit.
And if we succeed, the backlash might force the Hong Kong government to step in and award the acquisition to Standard Chartered instead."
Some truths were understood by all, but as long as no one said them out loud, everyone could pretend not to notice. But once you acted openly, the story changed. HSBC was half a central bank in Hong Kong—if it forced Hang Seng to collapse and then swooped in to acquire it, the public backlash would be brutal. It would be an ugly look.
Shen Bi nodded. "This might be our only option now. Yang Wendong is involved personally. We have a decent idea of his financial strength. Now Citibank might enter the picture too.
If we only rely on rumors, it won't be enough. And Yang Wendong is refusing all interviews—that's his defense."
"I can't believe after all this planning, we've been outplayed by the media," Sanders said grimly. "Looks like Yang Wendong understood the power of the Chinese press from the very beginning of his business career.
From newspapers to radio, television, even the film industry—he controls a huge part of Hong Kong's information channels."
"Indeed," Shen Bi nodded. "Yang Wendong is astonishingly capable. Actually… I've been thinking—why should we be his enemy?"
"What do you mean? Are you suggesting we convince Yang Wendong to sell Hang Seng to us?" Sanders asked in surprise. "Do you think that's even possible?"
"It's unlikely, yes. But I think it's worth a try," Shen Bi replied calmly. "He's a businessman. At the end of the day, it's all about profit."
"Fine. You can approach him in HSBC's name," Sanders said after a pause. "But everything must be phrased as hypothetical. Absolutely no direct offers."
"Understood," Shen Bi replied.
At Changxing Tower, when Yang Wendong heard the name "Shen Bi," he was visibly surprised. "Shen Bi? The future boss of HSBC himself has come to see me?"
Fang Xianming nodded. "Yes, Shen Bi is currently head of HSBC's credit division. Would you like to meet with him?"
Even if he was "just" a division head, Yang Wendong was a top-tier business figure in Hong Kong. The actual head of HSBC would definitely get a meeting—but for someone like Shen Bi, it depended on Yang Wendong's mood.
"Let him in," Yang Wendong said. For a future head of HSBC, he'd give at least some respect.
It was possible that his intervention in history might prevent Shen Bi from ever becoming CEO. But someone that talented was unlikely to fade away completely. After all, in his past life, HSBC became one of the world's top ten banks in the 21st century—thanks largely to the reforms implemented during Shen Bi's tenure.
Soon, a white man stepped into the room. "Mr. Yang, it's a pleasure. I'm Shen Bi, Deputy General Manager at HSBC."
"Mr. Shen, please have a seat," Yang Wendong said, gesturing politely. "To what do I owe the visit?"
Shen Bi smiled. "I've heard that you've become a major shareholder of Hang Seng Bank. I have a proposal that could benefit all three parties—Hang Seng, HSBC, and yourself. I hope you'll consider it."
"I'm listening," Yang Wendong said calmly.
"Hang Seng Bank has grown rapidly in recent years," Shen Bi began. "But as you probably know, they've already hit their limit. Hong Kong is only so big. Expanding internationally is very difficult.
So my proposal is simple: let HSBC acquire Hang Seng. Then, together, we can use our combined resources to go global."
"I don't see how that benefits all three parties," Yang Wendong replied with a faint smile.
He could see through the game. HSBC simply wanted to eliminate a rising competitor. With Hang Seng neutralized, HSBC would have a stable rear base in Hong Kong and could focus on expanding its international operations.
Hong Kong might be small in size, but its growth over the next few decades would be unmatched globally. As the city's largest bank, HSBC stood to reap enormous profits. And it was under Shen Bi's leadership that the bank would rise to global prominence.
Shen Bi gave a faint smile. "Mr. Yang, if you're not comfortable with that idea, HSBC is willing to purchase your shares in Hang Seng Bank at a premium."
"Mr. Shen, do you think I invested in Hang Seng just to cash out with a bit of profit?" Yang Wendong replied calmly. "This matter is better discussed with Mr. He Shanheng. He is the majority shareholder and managing director. If he agrees to it, I'll naturally follow suit."
Although a conflict had arisen between him and HSBC during this episode, no one had openly turned it into a confrontation. Yang Wendong wasn't going to be the one to break the peace. He simply passed the ball back.
"Understood. I still hope you'll give it serious consideration," Shen Bi said. "Price is not an issue."
Not long after, Shen Bi left. Yang Wendong then met privately with He Shanheng and informed him of the exchange.
"As I suspected," He Shanheng sighed. "This whole bank run was orchestrated by HSBC."
"It's only natural," Yang Wendong said. "Hang Seng has done extremely well these past few years. HSBC couldn't keep up, so of course they resorted to other means."
The business world was a battlefield. If it were a different industry, there might be room for peaceful coexistence. But in the same sector, any rising competitor was seen as a threat to be eliminated. That was how the tech giants in his past life fought—ruthlessly and relentlessly—even when they weren't directly competing in the same subcategory, they still battled for user attention and time.
In the real world, business warfare wasn't always boardroom debates or data contests. Sometimes it was literally yanking cables, sabotaging factories, or corporate espionage. Other times, CEOs personally exchanged barbs at press conferences, not to showcase their own technology, but to slam their competitors.
"I really have to thank you, Mr. Yang," He Shanheng said with a smile. "If not for you, I don't think Hang Seng could've survived this."
"You're too polite. I'm a shareholder now—it was only natural to step in," Yang Wendong said. Then he paused before adding, "But this whole event should serve as a warning. Even though Hang Seng's risk management has always been exemplary, it was still nearly destroyed by external manipulation. You'll need a long-term strategy."
"What do you suggest, Mr. Yang?" He Shanheng asked. "I've thought about it, but I don't see an easy solution. We can't possibly maintain high liquidity all the time."
"Neither can I," Yang Wendong said, shaking his head. "But from what I can see, the only real way forward is to expand overseas. If your operations are large enough, and diversified geographically, even if one region suffers a bank run, others can supply liquidity."
"Overseas expansion…" He Shanheng muttered. "I've thought about it too. But I have no idea where to begin. Operating a bank overseas is extremely difficult."
"It is," Yang Wendong agreed. "And I can't help much with that. But you might consider starting in Singapore. It's predominantly Chinese, and its government allows foreign banking investments."
"Singapore? Alright, I'll study the market there," He Shanheng nodded.
Yang Wendong continued, "Mr. He, there's one more thing I should remind you about."
"What is it?" He Shanheng asked.
"This incident with Hang Seng—everyone knows there was a hidden hand behind it," Yang Wendong said. "The root cause is that Hang Seng, and Chinese banks more broadly, touched on the financial interests of political factions represented by British banks.
Right now, Hong Kong is still under colonial administration. They'll never allow core sectors like finance to fall under Chinese control. I trust you understand what I'm saying?"
"I do," He Shanheng nodded. "No major enterprise can grow big without political backing."
"That's right," Yang Wendong said. "So as far as Hong Kong is concerned, we can't shine too brightly—at least not for now."
Over the next few days, the number of people withdrawing money from Hang Seng Bank decreased significantly. The bank's liquidity began to stabilize, and the worst of the crisis passed.
In the end, both Hang Seng Bank and Yang Wendong had emerged victorious from this financial war.
Author's Note (PS):
To clarify for those curious: many believe that once a bank like Hang Seng faced a run, only HSBC could save it. But in reality, there were two viable rescue options when the crisis happened: one was HSBC, the other was Chase Manhattan from the United States.
At the time, even though American banks didn't have large operations in Hong Kong, they were widely respected among the middle and upper classes. And these people were the core depositors causing the bank run. As long as they were reassured, the bank could survive the 7 to 14-day critical window—based on historical patterns from commercial banking crises.
Once that period passed, the intensity of the withdrawals would naturally decline. The most determined depositors would already have taken their money out, and those on the fence would begin to wait and watch. If the bank was managed properly, and bold enough to make tough decisions, many people might even deposit their money back in again.
This was exactly what happened with Far East Bank (founded by Y.K. Pao, who later became chairman of ATV). After it faced a run, it was stabilized through a partial acquisition by a foreign bank. At that time, nearly all Chinese banks in Hong Kong experienced runs—Hang Seng just became the most famous case because it ended with an HSBC takeover.
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