Chapter 365: Progress on Taiwan Investments and the Opening of the Four Seasons Hotel
"Alright," Zheng Yuhua replied, "To be honest, the pricing from Taiwan really is quite a bit lower than Japan's. As long as the quality holds up, it could be a good alternative option going forward."
Yang Wendong asked curiously, "Aren't the components used in Taiwan's shipyards mostly imported from Japan? How can their entire ship end up being cheaper? Labor costs alone can't make that big a difference, right?"
Zheng Yuhua explained, "The wage gap alone isn't enough, that's true. The main reason is that the Taiwan government is heavily subsidizing the industry. First, shipbuilding is essentially tax-free. Second, for imported components, the government also provides subsidies. That gives them a very strong cost advantage."
"The Taiwan government really seems determined to support their shipbuilding sector," Yang Wendong nodded thoughtfully.
"Absolutely," said Zheng Yuhua. "Shipbuilding drives an enormous amount of industrial development. From what I've heard, Japan now has several million people working in shipbuilding-related industries."
"Such a pity we can't build ships in Hong Kong. Otherwise, I'd definitely be thinking about setting up a shipyard myself," Yang Wendong chuckled. "But let's not worry about all that background stuff. If Taiwan's ships are good quality and reasonably priced, that's all we care about."
"Understood," Zheng Yuhua responded.
That afternoon, back at Changxing Tower, Yang Wendong summoned Wei Zetao. "What's the status of Changxing Industries' industrial investment in Taiwan?" he asked.
Wei Zetao replied, "We're still in negotiations with the Taiwan authorities. The initial plan is to build a large plastic manufacturing center with an annual output of one million suitcases, three million spinning mops, and two hundred million adhesive hooks. The planned area is 600,000 square feet—about 60,000 square meters—located in a suburban area near Taipei."
"Was the 600,000-square-foot area your suggestion, or theirs?" Yang Wendong asked.
"That was my initial minimum request. I actually wanted at least a million square feet, but suitable suburban locations near Taipei that size are hard to come by," Wei Zetao explained. "They said we either move farther out and get the larger space, or accept a smaller site."
Yang Wendong narrowed his eyes. "Is it really unavailable, or are they just unwilling to give it to us?"
"There's definitely land available," Wei Zetao admitted. "But the Taiwan government probably has other development plans or other industrial investments they're trying to accommodate. They seem reluctant to allocate such a large plot near Taipei to us."
"Makes sense," Yang Wendong smiled. "Nobody's stupid. So once we've built out this capacity, how do you plan to integrate it into our existing sales network?"
"We're looking to use the Taiwan factory to supply exports to Japan and the U.S., since Taiwan has favorable trade relations with both," said Wei Zetao. "That would allow us to scale up further. The Hong Kong factory, meanwhile, will focus on markets like Europe, Southeast Asia, South America, and the Commonwealth nations."
"Good. We'll need at least one more major production base," Yang Wendong nodded.
While he certainly wanted to create more jobs in Hong Kong, relying solely on local labor wasn't ideal either. After all, Hong Kong's working-age population was only about a million. If Changxing absorbed too much of that, it could end up being a liability—tying the entire group too closely to a single location.
Besides, with the global electronics market about to explode, and as someone with knowledge of the future, Yang Wendong knew that even capturing just a small slice of it would overwhelm Hong Kong's limited labor force.
Small-population regions always had limited potential for large-scale industrial expansion.
"There's also the question of Post-it Notes," Wei Zetao continued. "Internally, there's some disagreement about whether we should shift part of the production to Taiwan. On the cost side, Taiwan has local paper mills, which could save a bit. But Post-it Notes don't consume much paper to begin with, so transportation costs aren't a huge factor. Some people insist the product should continue to be made in Hong Kong."
"Keep it in Hong Kong," Yang Wendong decided. "The margins on Post-it Notes are high enough that we don't need to worry about minor cost differences. Plus, we've already built up skilled production lines here. No need to mess with something that works.
Let Taiwan focus on regular office paper, packaging, tissue paper, and facial tissues. Those segments will have a much larger scale than Post-it Notes if we grow them properly."
Even though Post-it Notes were sold worldwide, the nature of the product meant it could never match the scale of more common paper goods. Just capturing a portion of the Asian market for something like toilet paper would generate higher demand for raw materials and create more jobs than sticky notes ever could.
Of course, in terms of profit per unit, Post-it Notes couldn't be beaten.
"Understood. We'll keep Post-it production in Hong Kong," said Wei Zetao, grasping his boss's meaning.
Yang Wendong continued, "We'll stick with your proposed figures for Phase 1 investment in Taiwan. Later adjustments can be made depending on global demand. But make sure we ask for a larger plot of land.
Changxing Shipping might place an order for two 50,000-ton oil tankers from Taiwan. That's a pretty valuable bargaining chip. Work with Zheng Yuhua to negotiate with the Taiwan side. Squeeze as much benefit as you can out of it. These two deals—both the ship orders and the factory investment—are giving them significant advantages, so we deserve something in return."
Investment was a two-way street, but local governments treated projects differently depending on their nature. If a factory only sold goods domestically, officials might not care. But if it exported 100% of its output, then it was gold—boosting employment and bringing in foreign exchange.
Shipbuilding contracts were even more significant. They brought huge numbers of jobs. And this would be Taiwan's first 50,000-ton-class oil tanker—a landmark order. If the ship turned out well and performed reliably, other shipping companies would follow suit.
With such benefits being offered, Yang Wendong expected returns—in the form of land, primarily. He wasn't interested in anything else.
"Got it," Wei Zetao said excitedly. "If we play it right, we might even get better tax incentives."
"Mhm," Yang Wendong nodded. "Get this finalized as soon as possible. I want the Taiwan factory up and running quickly."
Another reason he was pushing forward with Taiwan investment was the coming emigration wave in Hong Kong during 1966–1967. While ordinary workers couldn't leave easily, many middle- and upper-class professionals would. That could impact his operations in Hong Kong.
So he needed a contingency plan—to move some of the planned production capacity abroad. Taiwan, with its Formosa Plastics industry, was actually a great match for producing plastic consumer goods.
Once things stabilized in Hong Kong around 1968, Yang Wendong could shift the city's industrial focus toward electronics, facilitating an upgrade from traditional industries. Low-end production could then move to Taiwan or even Singapore, which he also saw as a major part of his future strategy.
Of course, for now, this only applied to manufacturing. Design, R&D, and other high-value activities would remain in Hong Kong under Changxing Industries.
"Understood. I'll push to finalize this as soon as possible," Wei Zetao promised.
Though Changxing had already entered the electronics space, it was still focused on traditional appliances. Competing with overseas giants was difficult at this stage—his goal for now was simply to hold the line.
But in about ten years, entirely new industries would emerge: video games, personal computers, electronic watches. These would be creativity-driven sectors. That would mark not only the second spring of his career, but also a critical moment for Hong Kong's industrial transformation.
Soon, it was November 3rd.
A major milestone had arrived: after nearly two years of construction, the Four Seasons Hotel had finally completed its interior work and was opening for business that day.
At the break of dawn, Yang Wendong arrived at Queen's Road to see the completed 30-story tower. He was filled with pride.
Though he already owned multiple buildings in Central, this was the first superstructure that he had built from scratch with his own investment. Its height made it the tallest in Hong Kong at the time.
"Mr. Yang!" Architect I.M. Pei had also arrived. Smiling, he asked, "What do you think?"
"It looks magnificent from the outside," Yang Wendong praised.
"Haha, it certainly stands tall," I.M. Pei laughed. "But the interior is even more luxurious. Why don't you come in for a tour? I'll walk you through it."
"Sure." Yang Wendong nodded.
Together with a small group, they toured various sections of the building. Half an hour later, Yang Wendong said, "It's truly elegant on the inside. I'm tempted to move in myself."
"You're the owner, Mr. Yang," I.M. Pei chuckled. "You can stay here anytime you like. The interior blends international and Chinese cultural elements—we spent a long time finalizing the design. It took longer, but we believe it was worth the effort."
"No problem," Yang Wendong said. "Time well spent, as long as the result is good. For hotels, interior design is everything."
Unlike office towers, five-star hotels required careful attention to layout, employee workflow, and commercial integration. The infrastructure standards were much higher.
That's why hotels took longer to complete—even if the building was the same height as an office tower. The design complexity alone was vastly different.
"Thank you for your understanding," I.M. Pei said. "If there's a next hotel, I'll have the experience now, and we can build it even faster."
Yang Wendong thought for a moment and said, "The next one? Probably not in Hong Kong."
Now that he had entered the hotel industry, there was no way he would stop at just one. He wanted to create a full-fledged brand. But Hong Kong's market had limited capacity—even if it could support a second Four Seasons Hotel, that wouldn't be happening any time soon.
As for international expansion—that would involve greater risk. Whether to build overseas or partner with local consortia was something that required long-term planning.
"I understand," I.M. Pei replied with a smile.
Soon it was 9 a.m.—the official opening time for the Four Seasons Hotel.
As a major commercial institution, the launch was a grand affair. Nearly every media outlet in Hong Kong had been invited. There were professional lion and dragon dance teams on-site, and plenty of fanfare.
Numerous well-known figures from the Hong Kong business world had also shown up.
"Mr. Li, Mr. Ho, Mr. Cheng…" Yang Wendong personally greeted each guest.
"Congratulations, Mr. Yang," many of them said, giving him their full support with bright smiles.
Photographers were capturing every moment. These people were all headline material.
"Mr. Yang, Assistant Governor William has arrived," one of Yang Wendong's secretaries whispered in his ear.
Thank you for the support, friends. If you want to read more chapters in advance, go to my Patreon.
Read 40 Chapters In Advance: patreon.com/johanssen10