Chapter 97: How Is This Possible!
The living room was in silence, but the air was filled with the smoke of business competition.
Xu Shixun stared at the contract on the table, his brows furrowed tightly. The document prominently featured the words “CK Hutchison Holdings.”
A shipping company that had reportedly been established just one month ago was attempting to takeover the equity of their painstakingly operated Hong Kong Shipping Corporation.
Xu Shixun pondered for a long time, racking his brain through the directory of the Hong Kong shipping industry, but he couldn’t figure out who Li Ka-shing was.
“Sign it quickly.” Hugh Barton on the opposite sofa gently set down his teacup, his tone carrying a touch of unhurried authority.
As the Taipan of Jardine Matheson, he was accustomed to controlling the situation.
In the original historical trajectory, Li Ka-shing would not truly enter the vision of English capital until the late 1970s.
In 1977, he shocked the business community by defeating Jardine’s subsidiary Hongkong Land with Cheung Kong in the bidding for the properties above Central and Admiralty stations on the Hong Kong MTR.
This victory not only made him famous but also caught the attention of high-level officials at HSBC, especially the then chairman Shen Bi. Shen Bi keenly saw Li Ka-shing’s potential, viewing him as a local entrepreneur worth supporting, which opened the prelude to his deep ties with English capital.
But at this moment in 1961, history seemed to have been rewritten ahead of time.
Li Ka-shing was far from rising; he was merely an obscure small character in the Hong Kong plastics industry.
He was accumulating capital through Cheung Kong Plastics Factory, trying to find an opportunity to enter the real estate industry.
However, this did not mean he had no connections with English capital.
After all, in the process of expanding the plastics factory’s scale, he had to rely on loans from British-funded banks, such as HSBC and Standard Chartered.
These loans, though not large in amount, were the starting point of his connection with English capital.
When Li Ka-shing received the olive branch extended by Hugh Barton, he felt as if destiny had favored him, that there really was such a thing as pie falling from the sky.
A shipping business backed by Jardine Matheson and Swire was far more promising than real estate, and with English capital behind him, why worry about not being able to do real estate business?
It was precisely because he was not yet influential at this time that he became the ideal pawn for Hugh Barton and Swire Group’s Taipan John Swire.
They needed a sufficiently shrewd Chinese spokesperson to cover up the real existence of Jardine Matheson and Swire in the Hong Kong business community.
It was impossible to deceive Lin Ran; they couldn’t just eliminate the Xu Family.
But by proving we are just taking a share, we will still let Chinese people stand both in front and behind the scenes, satisfying Lin Ran’s vanity; they felt this wouldn’t be difficult.
And Li Ka-shing, this young, flexible, and ambitious Chinese person, perfectly fit their needs. Thus, he was selected to become the public spokesperson for “CK Hutchison Holdings.”
Even to fully respect the other party, CK Hutchison Holdings was still composed of Cheung Kong’s “Cheung,” and Jardine Matheson’s “Hutchison.”
What Hugh Barton did not expect was that their carefully selected white gloves belonged to a notoriously infamous existence in the spacetime from which Lin Ran came.
In the room, a rotary dial telephone with a gilded frame suddenly rang, breaking the brief silence. “Ding ding… ding ding… ding ding…” The crisp bell echoed in the quiet space.
“Sorry, I’ll take a call.” Xu Shixun stood up and looked apologetically at Hugh Barton.
“Please do.” Hugh Barton waved his hand and casually sipped his teacup.
Although the Hong Kong Telephone Company was established in 1925, with 36 years of history by now, in 1961 Hong Kong, owning a private telephone was still limited to a small wealthy class. The telephone was not only a communication tool but also a symbol of status.
At that time, there were no modern harassing calls in Hong Kong; every ring could bring important information.
“Shixun, has your father returned?” Dong Haoyun’s urgent voice came from the other end of the phone.
Dong Haoyun, the founder of Oriental Overseas Container Line, had anxiety in his tone clearly transmitted through the wire.
“No.” Xu Shixun replied briefly, his gaze unconsciously glancing at Hugh Barton.
Dong Haoyun spoke faster: “Except for a shipowner named Pao Yue-kong, the other minor shareholders privately transferred all their Hong Kong Shipping shares to a company called ‘CK Hutchison Holdings’ three days ago. I just heard the news that this ‘CK Hutchison Holdings’ was established only a month ago, and there are suspicions of Jardine Matheson’s shadow behind it.”
Xu Shixun smiled bitterly, lowering his head to look at Hugh Barton on the sofa, who was elegantly raising his cup in a toast.
He said helplessly: “It’s not suspected, it is. Jardine Matheson’s Taipan is here with me right now, forcing me to hand over the Hong Kong Shipping shares. They launched a general offensive while my father is away. Mr. Dong, don’t worry. My father messaged me yesterday that he would go to Winfield Manor in London today to meet Sir Lin. Whatever the matter, we’ll discuss it after he returns in two days.”
There was a moment of silence on the other end of the phone, then Dong Haoyun sighed, clearly at a loss with the current situation.
Xu Shixun hung up the phone and turned to face Hugh Barton. As the second generation of the family, he had only one thought: delay.
After all, as long as no decision was made, there would be no mistake.
Hugh Barton set down his teacup, lightly clapped his hands, his tone carrying a hint of sarcasm:
“Mr. Xu, if you don’t sell this time, when Old Mr. Xu returns in two days, the price won’t be the same. Also, a reminder: starting tomorrow, from HSBC to Standard Chartered, loan withdrawals against the Xu Group will be fully initiated.
By the way, the land under your name, we have prepared it as a meeting gift for ‘CK Hutchison Holdings.'”
He paused, his tone heavy: “Also, Sir Lin has indeed made remarkable achievements in mathematics and the field of aerospace, and his engineering accomplishments are impressive. The design of the conical guide post positioning device— to this day, our Jardine Matheson engineers haven’t found a better proposal.
But this doesn’t mean he is omnipotent.
In the field of finance, he is clearly powerless.
Moreover, due to his position at NASA, he cannot come to Hong Kong personally, and he is beyond reach of the Xu Family’s current situation.”
Unlike the Xu Family living in the Mid-Levels Villa, Pao Yue-kong at this time was still a small character in the shipping industry. Though he had begun to show promise, he couldn’t afford a luxury mansion in the Mid-Levels and could only live in the upscale residential area of Repulse Bay.
His Global Shipping Company was limited in scale, owning a few second-hand cargo ships, growing arduously through a “lease-to-buy” strategy.
In the living room, Hang Seng Bank founder Ho Sin-hang was earnestly persuading:
“Mr. Pao, except for the Xu and Dong families, the shares of the other shipowners have all been sold to us. Why put yourself in a desperate situation? We are willing to acquire your shares at a 20% premium; it’s good for you, good for me, good for everyone—why not?”
Ho Sin-hang was 61 years old this year, nearly 20 years older than Pao Yue-kong. He had close ties with HSBC Bank and was Jardine Matheson’s local partner for its 1961 listing; at this moment, he was sent by Jardine Matheson to lobby Pao Yue-kong.
Pao Yue-kong stared fixedly at Ho Sin-hang and asked in a heavy voice: “Uncle Ho, if I don’t compromise, will Hang Seng Bank also withdraw the loan from Global Shipping?”
Ho Sin-hang sighed: “In Hong Kong, you can’t twist the arm past the thigh.”
Pao Yue-kong’s tone was firm: “Uncle Ho, do you know what Hong Kong Shipping means to Chinese people?”
Ho Sin-hang was slightly stunned, then smiled bitterly: “How could I not know, having turned Hang Seng Merchant Bank into Hang Seng Bank? It means Chinese people might dominate global shipping standards for the first time. It means the transformation of global ports, ships, and containers will follow the path explored by Hong Kong Shipping. I’ve also seen your internal report.”
Pao Yue-kong’s heart sank, and he pressed: “If so, why are you still helping English people snatch the achievement from us Chinese people’s hands?”
Ho Sin-hang shook his head, his tone heavy: “Do you think your report was obtained from those minor shareholders who sold out Hong Kong Shipping?
Wrong, it came from the Hong Kong Marine Department. The Marine Department’s report is even more detailed than the one you wrote yourselves. Did you really think you could hide it from everyone? Without the Marine Department’s cooperation, what could Hong Kong Shipping do in Chinese hands? Still that saying, you can’t twist the arm past the thigh.
Sir Lin is very capable, but not omnipotent. In Hong Kong, English people still call the shots.”
He paused for a moment, then continued:
“Besides, who says selling the company means you’re no longer Chinese? Hong Kong Shipping is sold not to Jardine Matheson, but to ‘CK Hutchison Holdings,’ and the boss is still Chinese.
This is still an opportunity for Chinese people to push shipping standards globally.”
The room fell into dead silence, with only the sea breeze outside the window blowing against the glass, making a low “whoosh whoosh” sound.
Pao Yue-kong took a deep breath, his gaze sharp: “No, I won’t sell. Even if the bank withdraws the loan and forces my Global Shipping to start over from a single broken small ship, I won’t sell to ‘CK Hutchison Holdings.’
You’re right, ‘CK Hutchison Holdings’ is also a Chinese company. But I want to be an upright Chinese person, not a Chinese person who acts as a dog for White People!”
Ho Sin-hang’s face darkened, clearly stung by these words.
This was also scolding him.
He snorted coldly: “You… take care of yourself.” With that, he stormed out.
The next day, in an office building on Des Voeux Road Central in Central, the atmosphere in Global Shipping Company’s office was tense.
The secretary rushed into Pao Yue-kong’s room, her voice trembling:
“Mr. Pao, HSBC’s manager is in the reception room. They demand we immediately repay the $500,000 short-term loan. We only have $300,000 on the books; we can’t pay it back no matter what! Mr. Pao, what should we do now?”
Pao Yue-kong’s Global Shipping survived on “lease-to-buy”: buying second-hand ships, renting them to clients, using rent to repay loans, then buying new ships.
In 1961, his fleet was not large, perhaps only a handful of second-hand cargo ships, with annual income under $2 million and only a pitiful $300,000 in cash on the books.
Shipping is a cash flow-intensive industry; any slight disturbance could cause collapse.
Yesterday, Pao Yue-kong had anticipated this scene. He contacted a short-term loan overnight, thinking he could handle HSBC’s pressure. He walked into the meeting room and said gravely: “We’ll repay!”
Before the words finished, Hang Seng Bank’s manager walked in guided by the front desk: “Mr. Pao, don’t forget we also have a $200,000 loan; please settle it together.”
The HSBC representative followed up: “Given your broken cash chain, the risk clauses in the long-term loan contract may be triggered early, requiring full repayment. Please prepare accordingly.”
Pao Yue-kong’s heart jolted. A shipping company’s survival depends on liquidity and debt repayment ability. HSBC’s $500,000 plus Hang Seng’s $200,000, a total of $700,000 in loan withdrawals, far exceeded his $300,000 cash on hand.
If the long-term loans were also recalled early, his ships would be repossessed by the bank, and the company would completely collapse.
Although cargo ships would appreciate in the future due to the global shipping boom, that was years away; right now, he had no power to counterattack.
“Sorry, I’ll make a call.” Pao Yue-kong left the meeting room, picked up the rotary dial telephone, dialed around, but no one was willing to lend a hand.
The joint pressure from HSBC and Jardine Matheson had pushed him into a desperate situation.
He slumped back in his chair, the words of Ho Sin-hang echoing in his mind: “In Hong Kong, English people still call the shots.”
At that moment, he deeply felt the helplessness and humiliation of a colonial businessman.
Just as despair set in, the phone rang again. A stranger’s voice came: “Mr. Pao, this is Edward Yang, business manager at First National City Bank of New York. I think you need a little small help, don’t you?”
Pao Yue-kong was stunned, then reacted: “Are you sent by Sir Lin?”
Edward nodded in confirmation: “Correct. First National City Bank of New York— that is, the future Citibank— can help you package and restructure your debts, fully repaying the loans to HSBC and Hang Seng.”
First National City Bank of New York in 1961 had not yet been renamed “Citibank” (not until 1976), and its Hong Kong office mainly served America businesses and international giants.
Pao Yue-kong knew this capital-rich bank but had never imagined connecting with it.
“Good, good, good, let’s go in and talk in detail!” Pao Yue-kong’s spirits lifted. As long as it resolved the immediate crisis, any conditions were worth discussing.
At the same time, Citibank’s intervention also brought a turning point for Dong Haoyun and the Xu Family. The next day, Xu Aizhou returned from London and met with Dong Haoyun and Pao Yue-kong in Central, then returned home.
In the Xu Family’s living room, Xu Shixun excitedly said to his father: “Dad, Rockefeller and Morgan are so bold! You didn’t see the HSBC representative’s expression at the time— his face turned green; it was absolutely spectacular!”
Xu Aizhou waved his hand, correcting: “No, it wasn’t Rockefeller and Morgan. It was Lloyd’s of London and Barclays Bank joining forces to guarantee for us. That day in London, after I reported our crisis to Sir Lin, he immediately contacted Lloyd’s chairman M.E. Miskin and Barclays chairman Sir Anthony William Tuke through the University of London president.”
These two were the companies Lin Ran could think of most quickly that had direct competitive relations with HSBC, and they also had sufficient influence in England.
For them, entering the Hong Kong market through shipping standards and local Hong Kong shipowners was something they eagerly sought.
After reading Xu Aizhou’s report, Miskin and Anthony understood HSBC’s scheme.
This cake you want to eat, I want to eat too.
So under Lin Ran’s guarantee that they would participate in the subsequent standard promotion company, they appeared so promptly.
He paused, then continued: “These two are potential partners for future shipping standards, but our struggle with Jardine Matheson, Swire, and HSBC must continue. They couldn’t appear openly, so Sir Lin urgently contacted America, with First National City Bank of New York providing financial support. In reality, the underwater pushers are Lloyd’s and Barclays.”
Xu Shixun’s eyes widened: “I see!”
Xu Aizhou nodded: “Lloyd’s is not a traditional insurance company but an insurance market specializing in shipping insurance and trade guarantees, a direct competitor to HSBC. Barclays is England’s largest commercial bank, focused on Atlantic and America trade but also eyeing the Asia market.”
He picked up the Hong Kong Shipping report on the table and said gravely: “Miskin and Anthony read our report and understood that HSBC wants to monopolize the shipping standards cake. Under Sir Lin’s guarantee, they will obtain shares in the subsequent standard promotion company.”
The joint offensive of Jardine Matheson, Swire, and HSBC had almost pushed the Xu Group, Dong family, and Pao Yue-kong into a desperate situation.
However, Lin Ran pulled in support from Lloyd’s of London, Barclays Bank, and Citibank through his capital networks in London and New York, resolving the crisis.
The Chinese shipowners of Hong Kong Shipping were able to breathe, but the struggle with British capital was far from over.
“Old Mr. Xu, impressive moves. Sir Lin indeed has unusual relations with Rockefeller and Morgan.
With Rockefeller and Morgan, we can’t defeat you in the financial market.
But this matter is win-win if we cooperate, lose-lose if we divide.
We have already acquired over 30% of Hong Kong Shipping’s shares; we have a solid foundation for cooperation.”
Unlike the English used in talking with Xu Shixun, when Hugh Barton visited the Xu Family again the next day, not only was his tone much more polite, but he spoke entirely in Chinese.
At the scene, besides Hugh Barton, Dong Haoyun, Li Ka-shing, and Pao Yue-kong were all present.
Xu Aizhou waved his hand: “It was you who wanted to seize first; we only defended without attacking throughout.
How can there be talk of lose-lose; can the Xu Family shake Jardine Matheson or Swire?
But you are right on one point: indeed win-win, so we found Rockefeller and Morgan to join.”
Li Ka-shing chimed in timely: “Old Mr. Xu, Rockefeller and Morgan have super strength, but don’t forget this is Hong Kong.
If not cooperating with Jardine Matheson and Swire”
Before he finished, Xu Aizhou interrupted: “What is your identity? Is there a place for you to speak?”
He gave the other no chance to respond: “Mr. Barton, control the dog you brought.”
It must be said that Li is indeed top talent; even extremely angry inside, he remained composed on the surface.
His face didn’t even redden.
Xu Aizhou continued: “I know what you’re thinking; what we want is about the same.
The value of Hong Kong shipping is too great, so great that everyone wants a hand in it.
What you value is not only the standard promotion itself but also which ports to transform first, which later.
Whether to transform London Port first or Liverpool Port first.
If London Port first, you acquire London Port in advance, then sit and wait for it to appreciate.
Standardized construction is a cake, early acquisition is a cake, standard formulation is another cake.
And Hong Kong Shipping has globally unique modern port construction experience.
But have you thought that it is just an empty shell?
Because modern port construction still relies on people to complete.
And these people are all experienced workers, engineers, and crew members transferred from various companies.
But in fact, they do not belong to Hong Kong Shipping.
Also, a reminder: Sir Lin’s patent authorization is in my hands; it is given to me, not to Hong Kong Shipping.
So Hong Kong Shipping is a complete empty shell.
This empty shell is left for you to play with.” Xu Aizhou tossed a stack of photocopied documents of Lin Ran’s patent authorizations onto the coffee table with a laugh.
Hugh Barton’s face changed drastically: “You? How is this possible!”
Day ten thousand the next day, I discovered that shipping standardization is truly a huge cake. When I first outlined it, I underestimated this cake; Crow is too prescient!
