Chapter 319: A Win-Win with HSBC
On February 6, in a luxurious suite at the Peninsula Hotel, a pair of businessmen—one older, one younger, one British, one Chinese—sat on the balcony, enjoying the sea breeze.
"This view is really something," said Saunders, gazing toward Victoria Harbour. "Years ago, when I looked out from here, there was nothing on the Kowloon Peninsula except the docks and surrounding warehouses.
But now, it's full of buildings—it's already become one of the key economic centers of Hong Kong."
Yang Wendong smiled. "Hong Kong Island has limited space. Its capacity is finite. As the economy grows and people want to live more comfortably, development will naturally spill over to Kowloon.
Eventually, even the New Territories will turn into urban areas. It's the inevitable path of development, just like in early Western countries."
"Yes, it seems HSBC will need to increase its focus on Kowloon as well," Saunders nodded. "Hang Seng Bank was one step ahead of us. Even when we opened branches there, we couldn't match them."
Yang Wendong added, "Chinese banks didn't have much success on Hong Kong Island in the early days, so they had no choice but to set up shop in Kowloon. Now, as Kowloon develops, they're thriving with it."
Today, Hang Seng Bank had become a rising star in the banking industry—and even among business conglomerates—in Hong Kong.
Its rapid rise in the 1960s posed a significant threat to HSBC. Though Hang Seng's size still couldn't compare, its momentum was powerful. Its greatest strength lay in its deep roots in local communities across Kowloon.
Due to limited information access, many locals only trusted the banks that had set up branches in their area early on—just like mainlanders in the past who only trusted their local credit cooperatives.
This was likely one of the biggest reasons HSBC would later target Hang Seng for a takeover.
"Even many factories have moved to Kowloon," Saunders continued. "Especially yours, Mr. Yang. Your factories have added hundreds of millions in output there."
Yang Wendong smiled. "I started my business in Kowloon, so naturally the factories are there. But for electronics manufacturing, most of the industry is still based on Hong Kong Island. I'm planning to build a large appliance factory there soon."
Changxing Industries had been rooted in Kowloon since the beginning, so it remained there. But Rongyao Electronics would place its main production on Hong Kong Island because electronics required higher-skilled workers and weren't as sensitive to labor costs. Land prices were higher, yes—but by 1966, that wouldn't matter.
"Haha, that's good," Saunders said with a laugh. "Then let me be the first to congratulate you on your expansion into appliances. What are you making? That rice cooker I heard about? Or the kettle?"
Yang Wendong's electronics company had made some waves, but those small appliances weren't of much interest to the British.
Yang Wendong shook his head. "No, televisions. A factory with an annual output of over 500,000 units."
"Televisions?" Saunders's eyes lit up. "Mr. Yang, that's an ambitious move. A TV project of that scale would generate tremendous economic value."
Even if the wholesale price was just US$100 per unit, that was US$50 million in total output.
Yang Wendong smiled. "Any growing country wants TVs in every home. Hong Kong is Asia's leading industrial hub—it's only natural that we get involved."
In the internet era of his past life, people's entertainment thresholds were so high that TVs had lost their appeal.
But in this era, people dreamed of owning a radio or a television. Even in the 1980s in mainland China, people would spend half the value of their home on a color TV.
"Indeed," Saunders nodded. "So is this why you invited me out today—to discuss HSBC's involvement in this project?"
"That's right," Yang Wendong replied. "The factory will require a substantial amount of U.S. dollars to purchase equipment, and we also need a sizable piece of land on Hong Kong Island for the plant. HSBC's help would be greatly appreciated.
Once the plant is operational, we'll sell TVs locally and export overseas—then repay the loan in stages."
He could fund it himself, of course—but if the bank covered the costs, he'd have more capital for shipbuilding or buying real estate in 1966.
"How much funding do you need?" Saunders asked.
Yang Wendong said, "It depends on the location and size. Just the equipment will cost US$300–400,000.
And the production line can't go into a high-rise. We'll need at least 300,000 square feet of ground-floor space. Industrial land in North Point is going for about HK$1,000 per square foot, so just the land might cost HK$10 million."
The RCA deal wasn't finalized yet, but they had already estimated the price. It included not only the equipment but also many patents, which would allow his TVs to be sold freely around the world. With enough investment, they could even be improved further.
"That's a massive space. Finding that much land on the Island won't be easy," Saunders said, surprised.
Yang Wendong chuckled. "True, but we could reclaim land or level a hill."
In Hong Kong, it was common practice. Tian Jiabing's chemical plant had reclaimed 300,000 square feet of land in 1958. The upcoming Kwai Chung container port would do the same. Property developers had long used reclamation for land development.
"That won't be cheap," Saunders commented.
"But the returns will be even higher," Yang Wendong replied. "Once the TV factory starts running, it could easily export tens of millions—or even over a hundred million—worth per year. And that's just the beginning.
Besides, owning such a large plot of land would itself be a fortune—potentially worth billions in the future."
In many cases, you couldn't get government approval to reclaim land unless there was a legitimate business reason. Even British conglomerates couldn't bypass this. Real estate was the colonial government's lifeline, tightly regulated by the administration.
Saunders thought it over and said, "I'll need a complete project plan—your production forecasts, distribution plans, etc. Not your trade secrets, but enough to prove the project is viable."
"No problem. I'll have someone deliver it to your office soon," Yang Wendong nodded.
Commercial loans were never easy. Unlike real estate loans—where banks could just look at property value—industrial projects required extensive due diligence.
"Good," Saunders said. "Once we've reviewed the documents, we'll discuss the loan amount and interest rate."
Real estate and shipping already had market benchmarks, so Saunders could make quick decisions. But a new factory needing millions of dollars in capital? That required caution.
"Understood," Yang Wendong said. "The second matter I wanted to discuss today is the wireless television license in Hong Kong."
Saunders smiled. "You're planning to bid for it?"
The government kept such matters confidential from the public—but not from HSBC, Hong Kong's de facto central bank.
"That's right," Yang Wendong confirmed. "My media company needs a TV station. And since I'll be manufacturing TVs myself, I can reduce the retail price in Hong Kong."
"Haha, I've always admired how you vertically integrate across the value chain," Saunders laughed. "A TV factory plus a TV station—that's a perfect combination.
But it's just a television license. It's not that expensive. Surely you don't need to discuss such a small loan with me?"
He wasn't wrong. HSBC wouldn't refuse even a small deposit or loan request—but it wouldn't require a senior executive like him to get involved.
"No, I'm not here to discuss financing," Yang Wendong said. "I'd like HSBC to invest—to be my partner in the bidding."
"Ah, I see." Saunders, being sharp, immediately understood.
This wasn't about needing capital—it was about leveraging HSBC's influence to increase the chances of winning the bid.
Yang Wendong smiled. "Right now, Hong Kong has only Rediffusion TV, with just 10,000 subscribers. But with a free-to-air station and affordable TVs, we could easily reach 100,000 households.
And with Hong Kong's economy and population still growing, I'm convinced we'll reach a point—just like in the UK—where every home has at least one television, maybe even several."
"I agree. Hong Kong's growth has been impressive," Saunders nodded. "From an economic standpoint, this project seems solid. How much equity would you offer HSBC?"
That question told Yang Wendong he was nearly there.
"How about 20%?" he offered.
"You're not just bringing in HSBC, are you?" Saunders asked knowingly.
"No," Yang Wendong admitted. "I'll need other investors too. But I'm not sure who I can bring in yet.
I'm willing to give up 30–40% of the equity, and HSBC would get nearly half of that."
Saunders smiled. "Alright. I'll agree for now. I'll bring it up at our next board meeting. I don't foresee any issues."
"Great. Let's make this TV station a success," Yang Wendong said with a smile. "It'll deliver stable, high returns to all investors."
At HSBC, the chief manager had enormous decision-making power. Once he approved a deal, the board simply rubber-stamped it.
In Yang Wendong's past life, it was Michael Sandberg who sold Hutchison Whampoa's shares to Li Ka-shing for a low price. Even when Jardine and Swire protested, it didn't matter—the decision was already made.
"I also hope for a win-win," Saunders replied.
Even the major players—Jardine, Swire—were well aware that Yang Wendong, the rising star of Chinese capital, was unstoppable.
For now, Changxing Group's core sectors—industry, real estate, shipping—didn't conflict much with the old powers. The real estate market was big enough for everyone, so there was no friction—yet.
But in the future, clashes between conglomerates would be inevitable.
HSBC, however, was different. As a bank, it was restricted by the colonial government from entering other industries. That meant it had no natural conflicts of interest with rising Chinese capital. In fact, it stood to benefit from collaborating.
"I look forward to it," Yang Wendong said with a smile. "Also, next week is the Wellington Street land auction. We'll need to work together on that one too."
His cooperation with HSBC was mutually beneficial. When it came to overseas projects or anything involving foreign currency, HSBC was the only bank he could turn to.
Besides, it was Saunders who had tipped him off about the Wellington plot. It was only right to return the favor.
"No problem," Saunders nodded.
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