Chapter 190: Befriending the Future Taipan of HSBC
The most important part—the investment into the Formosa Plastics Group—was already completed, so there was no longer any need for Yang Wendong to remain in Taiwan for the smaller, more specific details of the partnership.
The follow-up work would be handled by the team from Changxing Industrial, who would stay behind in Taiwan and cooperate with Wang Yongqing's people to push forward the construction of the new factory at the fastest possible speed.
This was something both sides were eager to see through to completion.
On the third day after returning to Hong Kong, when Yang Wendong visited Changxing Industrial once more, Wei Zetao brought him some news.
"Mr. Yang, both Liu Chong Hing Bank and Hang Seng Bank are feeling hesitant about granting a loan to our joint venture with Formosa Plastics," Wei Zetao said as he entered.
"Oh?" Yang Wendong frowned slightly. "Are they reluctant to lend to a company based in Taiwan?"
Before the formal joint venture agreement with Wang Yongqing had been reached, Yang Wendong had only casually mentioned the matter to Liu Baoshan from Liu Chong Hing Bank and Ho Sin Hang from Hang Seng Bank. Their replies at the time were vague but not discouraging—they had expressed a willingness to negotiate. Nothing had gone further than that, since no formal investment had yet been made into Formosa Plastics, and it would have been a waste of time and resources to engage in deep banking talks prematurely.
Given the large amount of funding involved, once formal negotiations with a bank began, the bank would need to mobilize both human and financial resources to prepare. If the joint venture were to fall through in the end, the bank's efforts would've been for nothing. Though the chance of that happening was slim, good business practice dictated that deeper discussions should follow only after the partnership was secured.
"It's not that they don't want to do the business," Wei Zetao explained. "But they might be worried about political risk, after all..."
"Mmm, I get it," Yang Wendong nodded. It was still 1960, and concerns about political instability were ever-present.
He continued, "But if they still want to get involved, are they looking to raise the interest rate? If the rates are too high, I'd rather have Formosa Plastics borrow from Japanese banks."
Taiwan was also supportive of industrial development, but just like the mainland in the 1980s, it had very strict foreign exchange controls. While Formosa Plastics' products were mainly for export and could generate foreign currency, Taiwan's bureaucratic procedures were notoriously slow. That kind of delay could severely impact Yang Wendong's supply chain plans, so he preferred to arrange the loans from Hong Kong banks first.
Of course, Japanese banks had branches in Taiwan too. They were an option, but their interest rates were notably higher than those of Hong Kong banks.
Wei Zetao replied, "Liu Chong Hing and Hang Seng said they're willing to keep the interest rate at the standard level in Hong Kong, but they hope to bring in a British bank to jointly offer the loan to Formosa Plastics."
"A British bank?" Yang Wendong paused. "I see what they're getting at. Did they say which bank they had in mind?"
Though Yang Wendong had some foresight about the future of the British Empire, at this point in time, Britain was still one of the most powerful nations in the world—second only to the U.S. and the U.S.S.R.
The Royal Navy still held considerable power, and Britain's colonies were spread across the globe, even if their actual control was waning.
More importantly, among all the Western countries, Britain had one of the better relationships with mainland China at the time.
Wei Zetao smiled and said, "They want HSBC to get involved."
"HSBC? We haven't worked much with them yet," Yang Wendong thought aloud. "But yes, in Hong Kong, it's only a matter of time before we establish ties with HSBC. I do know someone inside the bank, so this might be a good opportunity for a small initial collaboration."
Now that he had entered the real estate and shipping industries—both of which were highly reliant on banks—it made sense to build a strong relationship with HSBC. In Hong Kong, HSBC was the most powerful bank. Even if it wasn't yet officially recognized as the top financial conglomerate, Yang Wendong, with his knowledge of the future, knew it was crucial to form a good relationship with them.
As for Chinese banks, they would begin to decline after 1965. It wouldn't be until the early 1980s, when British capital started retreating from Hong Kong, that they would have a real chance to rise again.
"Alright then, I'll wait for your good news," Wei Zetao said as he excused himself and left.
Yang Wendong smiled and picked up the phone beside him.
In a presidential suite at The Peninsula Hotel:
Yang Wendong sat in front of a large floor-to-ceiling window, reading the latest newspaper while enjoying the air conditioning and occasionally glancing at the view outside.
"Ding-dong~" The doorbell rang.
He set down the newspaper and got up to answer the door. Standing outside was a young and attractive woman dressed in a bank uniform.
"Yushan, you really do look stunning in that banking outfit," Yang Wendong said with a smile.
Bai Yushan pouted and replied with mock jealousy, "Not as pretty as Mrs. Yang, I bet?"
Yang Wendong pulled her into his arms and closed the door behind them. Laughing, he said, "What's this? Jealous?"
"Mm~" Bai Yushan made a soft, affirming sound.
Yang Wendong's hands began to roam. When a girl's a little jealous, words alone won't fix it—you've got to do something.
Love isn't spoken; it's acted out.
"Wait, I'm all sweaty," Bai Yushan quickly said. "It's scorching outside, and I jogged a little to get here."
"Then how about we shower together? I'm feeling a bit hot too," Yang Wendong said with a grin.
"Mm…" Bai Yushan looked at him—clearly not sweaty, and his hands were actually cool from the air conditioning. But after a moment's hesitation, she agreed, "Okay."
[20,000 words omitted]
Over an hour later, the two lay in bed, under a thin sheet, enjoying the cool breeze of the air conditioner. Yang Wendong had entered his post-climax sage mode.
Taking advantage of the brief quiet, he shared what he needed to get done with Bai Yushan.
After listening, Bai Yushan asked, "You want HSBC to lend money to your joint venture? In Taiwan?"
"Is that not in line with HSBC's policies?" Yang Wendong asked in return.
Bai Yushan thought for a moment and said, "HSBC has started supporting manufacturing companies in Hong Kong these past couple of years, mostly to compete with Chinese banks—especially Hang Seng.
They do have overseas loan programs too, since HSBC has always operated internationally. But as for Hong Kong people opening factories overseas and getting support from HSBC? I haven't heard of that. Maybe there were some cases before, but if there were, the scale must've been small, and I didn't pay attention."
"Well, there's a first time for everything," Yang Wendong nodded. "This joint venture has very solid profit potential. I want to meet someone from the upper management at HSBC. Who do you think would be a good choice?"
Loans involving tens of thousands of U.S. dollars weren't something ordinary HSBC employees could approve. And Yang Wendong didn't have the time to negotiate the finer details himself—he needed to hash out the strategic framework with an executive first, and then let his team handle the specifics.
HSBC's British executives included quite a few influential figures, so choosing the right person to approach was crucial. Although Bai Yushan had only worked at HSBC for about six months and wasn't familiar with the higher-ups, she should still have some sense of the internal structure.
After a moment's thought, she said, "There's one British guy I know of—his name's Sanders. Right now, he's still the credit director in the loan department, but I've heard he's about to get promoted since the current manager is retiring soon.
Among all the British higher-ups at HSBC, Sanders is the most open to working with Chinese businessmen. Plus, he's been the top performer among HSBC's management these past few years."
"Sanders?" Of course Yang Wendong knew that name.
When it came to HSBC's taipans, anyone with even a modest knowledge of Hong Kong's history would think of "Egg Man" Shen Bi. However, in reality, before Shen Bi, there had been another exceptionally capable taipan—Sanders. His policies toward Chinese merchants were much like Shen Bi's. In fact, it was precisely because their philosophies aligned that Shen Bi was promoted and eventually succeeded Sanders as taipan.
If Shen Bi had been the one to mentor Li Ka-shing, then Sanders had been the one who supported the shipping tycoon Pao Yue-kong.
"You've heard of him?" Bai Yushan asked.
"Heard of him?" Yang Wendong countered, "By the way, does HSBC currently work with any shipping companies?"
"Shipping?" Bai Yushan looked slightly puzzled by the sudden change in topic, but still answered, "I don't think so. HSBC has always avoided the shipping and film industries, considering them too risky."
"Hmm, alright. Then I'll reach out to Sanders to talk about a potential partnership," Yang Wendong nodded.
In his memory, Pao Yue-kong had been the first shipowner to successfully obtain a loan from HSBC. If the bank still hadn't entered the shipping industry at this point in time, that likely meant Pao was still struggling for capital—and maybe, just maybe, Yang had a shot at stepping in.
"Should I report this to my supervisor?" Bai Yushan asked.
"No need," Yang Wendong said with a smile. "I'll go through a business intermediary. You just continue working and learning at HSBC like normal."
"You're treating me like a spy now?" Bai Yushan teased.
"A spy? That's going too far. It's not like I'm asking you to betray the company," Yang Wendong chuckled. His hands started wandering again. "But thinking about it, a female spy… now that's pretty exciting."
...
Sage time came to an end, and the second world war in the room resumed.
That evening, Yang Wendong tasked an intermediary with getting in touch with Sanders. Upon hearing that the invitation came from Hong Kong's newly famed "Post-it Note King," Sanders naturally agreed to meet.
The next day, Yang Wendong arrived at the Blue Room, a private club near HSBC headquarters, where he met Sanders, who was still the head of the bank's credit department at the time.
"Mr. Yang, hello," Sanders greeted him in fluent Cantonese. As a senior British banking executive in Hong Kong, speaking the local language was part of the job.
"Mr. Sanders, hello, please have a seat," Yang Wendong responded politely.
After some brief pleasantries, Yang got straight to the point and explained the investment he had made in Taiwan.
Once Sanders finished listening, he said, "So Mr. Yang, you're hoping HSBC can provide a loan of $500,000 to this company, Formosa Plastics?"
"That's correct," Yang nodded. "But it wouldn't be just HSBC. Liu Chong Hing Bank and Hang Seng Bank would also be involved. The exact amounts each bank would contribute still need to be negotiated.
The main question is—how much is HSBC willing to lend?"
"Are you suggesting HSBC take the lead?" Sanders asked. In joint loans, there was usually one leading bank, which would also provide the largest portion of the funds.
Yang Wendong smiled. "Absolutely. If you're willing to lead."
Since the two Chinese banks had hesitated and wanted a British bank to join in, it was only natural that the lead would go to the British side.
"From what you've described, the commercial risk appears minimal," Sanders said thoughtfully. "I'm aware that Changxing Industrial's products sell very well around the world. The only concern is the political risk of doing business in Taiwan."
Yang Wendong smiled and said, "But with HSBC backed by Britain, doesn't that provide a degree of assurance?"
"Haha, Mr. Yang makes a good point." Sanders nodded. "Very well. I'll go back and give it some serious thought. You'll have my answer soon.
That said, beyond this loan, HSBC would also be very interested in working with you in other areas—especially your businesses here in Hong Kong, whether they're factories, real estate, or other ventures you're optimistic about."
"I'd be happy to collaborate more with HSBC in the future," Yang Wendong replied smoothly, playing along. After all, there was nothing to lose.
As his business empire expanded, there would inevitably be a need to work with HSBC—not just because of their financial power, but because bringing them onboard would strategically strengthen his position.
If the loan amounts were large enough and profitable for HSBC, then they'd essentially become semi-allies.
"Excellent," Sanders said with satisfaction.
Over the years, he had been pushing for HSBC to work more closely with Chinese companies, whether they were factories or real estate developers.
He had observed that many of the Chinese banks in Hong Kong had risen by working with Chinese businesses that the British banks had looked down on. These Chinese firms were growing fast—so fast, in fact, that ignoring them would be foolish.
While it was true that Chinese banks still lagged far behind HSBC, Standard Chartered, and Mercantile Bank, their growth rate was staggering.
Ever since Sanders had started pushing for closer cooperation with Chinese enterprises, HSBC's performance had seen a significant boost. And among Hong Kong's Chinese businesses, Changxing Industrial was clearly one of the strongest—and most promising.
That afternoon, back at the bank, Sanders immediately called a meeting with his fellow British colleagues at the same executive level to discuss the matter.
"I don't agree with this," one of the British bankers said flatly. "We already have strong partnerships with Wheelock, Swire, and Jardine. The British firms are all much larger than the Chinese ones. Why should we allocate so much capital to a Chinese company?"
Sanders knew this man had always opposed working with Chinese businesses, so he countered, "Even if we don't agree, Standard Chartered and Mercantile will step in. Even overseas banks are partnering with Chinese companies.
Since when did money care whether it came from Chinese or British hands? Are you saying Chinese Hong Kong dollars aren't real dollars?"
Within HSBC, there were currently three camps on the issue of partnering with Chinese companies: the pro-cooperation camp, the anti-cooperation camp, and a group that sat on the fence.
The room fell into discussion, until the senior-most white-haired British executive sitting at the head of the table spoke up.
"Sanders, are you confident about the risks involved here?"
"From a commercial perspective, the risk is very low," Sanders replied. "As for political concerns, I don't think it's a serious issue. The Middle East is in chaos right now, and the Western powers are focused over there. They don't have the time or attention to be meddling in Asia at the moment."
"Hmm, fair point." The old man nodded. He then looked around the room and said, "Everyone, here's a figure worth considering: Hong Kong has long been known as a global hub for trade.
But starting last year, the value of industrial products manufactured locally has surpassed re-export trade. That signals a fundamental shift in how wealth is being generated in our society.
And let's not forget—these factories are almost entirely owned by Chinese entrepreneurs. Many may be small, but we absolutely cannot ignore them. So, I support this collaboration."
The room fell silent. With the highest-ranking officer having spoken, even those who might have wanted to object had no choice but to hold their tongues.
Sanders smiled and said, "Very well, Mr. Wells. I'll send someone to Taiwan for an on-site investigation. Once the information checks out, I'll proceed to negotiate the terms of the loan."
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