Chapter 312: A New Shift in Real Estate Strategy
"Container terminal?" Yang Wendong frowned. "Mr. Bao, that's going to face tremendous resistance. And honestly, there's very little direct profit in it for us.
The ports are a core interest of the colonial government—and also of British capital. We're unlikely to have any say in the matter."
During the colonial era, the Hong Kong government publicly claimed to uphold "fair" competition between Chinese and British capital. But that was mostly lip service.
In practice, most core and passive-income industries—like ports, electricity, aviation, telecom, and finance—were tightly controlled by British firms.
Although Chinese companies were allowed into some limited monopolies, such as China Motor Bus and a few financial companies, those were sectors the British initially overlooked or found unappealing. By the time they realized their potential, Chinese firms had already gained a foothold. And even then, since the businesses were still relatively small, the government turned a blind eye to maintain the illusion of fairness.
But if a Chinese company grew too big in any of those sectors and threatened British dominance, they would be suppressed. That had already happened in the banking sector.
As for the ports, they were especially critical. Hong Kong had built its prosperity on port-based trade. Even with its growing industrial strength, it still relied on the ports to move goods. It was an effortless way for British firms to skim profits off the backs of hardworking Chinese businesses—and even Yang Wendong wasn't immune to that.
It wasn't until the 1980s, when mainland China began backing Hong Kong's Chinese capital, that a serious challenge to British control over ports became possible.
Bao Yugang chuckled. "I know. I'm not looking to profit from the ports. I just believe that if Hong Kong modernizes its port infrastructure and switches to containerization, it would be a huge boost to trade—and a great help to the shipping industry."
Yang Wendong nodded. "That makes sense. But how do you plan to push for it?"
Bao Yugang replied, "I'm thinking of coordinating with several of Hong Kong's shipping companies to jointly submit a proposal to the government. With enough of us together, the authorities will have to take it seriously."
Yang Wendong shook his head. "Mr. Bao, the government isn't ignorant. Containerization has already begun in Europe and the U.S., and the results are impressive. You think the government hasn't noticed?"
Bao Yugang responded, "Are you saying that the stakeholders behind Whampoa, Jardine, and Swire would oppose it?"
Yang Wendong said, "It's hard to say. But the interests involved are massive. And it's not just about capital—the government also has to consider the tens of thousands of port workers. If they suddenly face unemployment, what do you think will happen?"
Bao Yugang said, "But container ports will take years to build. The workers won't be laid off all at once."
Yang Wendong laughed. "That's true in theory. But the moment construction begins, workers may start protesting. Thousands of idle, angry young men? The government won't want to stir that pot."
Bao Yugang nodded slowly. "I've thought about that too. Still, containerization is the inevitable future."
Yang Wendong sighed. "Agreed. But transitioning Hong Kong's ports into container terminals in a stable way is a complex issue. Even in London, they haven't managed to do it yet.
There's a saying—'a million boatmen can stall an empire'. It's not an exaggeration. Even ancient dynasties were held back by vested interests like these.
Don't forget—Governor Black is stepping down in a year. If you were in his shoes, would you initiate a massive, disruptive reform in your final year, upsetting multiple British conglomerates and tens of thousands of dockworkers? Just to benefit Hong Kong ten years down the line?"
Bao Yugang paused, then admitted, "Mr. Yang, you make a good point. I'll have to reconsider."
Yang Wendong continued, "Actually, waiting one more year might be better. A new governor will likely have a ten-year term—and want to leave a legacy.
And the more container ports there are worldwide, the more Hong Kong will be forced to follow. Officials always prefer quiet, inevitable reform—so they can avoid blame if things go wrong."
Bao Yugang looked impressed. "Mr. Yang, it's a pity you're not in government."
"Haha, just a casual thought. Don't take it seriously." Yang Wendong laughed.
He had read enough history to understand these power structures.
As for container terminals, he had already started planning. The first step was land acquisition around the future site. Right now, areas like Kwai Chung were still underdeveloped, and land prices were cheap. Buying up old buildings or purchasing industrial-zoned land under the guise of setting up warehouses was still affordable.
Once the container port project was officially approved—even if he couldn't get a piece of the terminal itself—the surrounding land would skyrocket in value, and he could still benefit long-term from the economic activity.
Bao Yugang nodded. "Alright then, we'll wait a year. That's not a long time. When the time comes, let's push this together."
"We'll see." Yang Wendong smiled. "For now, let's just attend the graduation ceremony."
Given the current situation, the later the container terminal came, the more advantageous it would be for Yang Wendong. He wasn't in a hurry.
"Alright." Bao Yugang could tell Yang Wendong had other plans and didn't press the matter further.
—
That afternoon, after returning to Changxing Tower, Yang Wendong called in Zheng Zhijie, who oversaw real estate operations.
"How's land acquisition going for the new Carrefour store sites?"
Zheng Zhijie replied, "Mr. Yang, in the past three months, we've acquired three more plots on Hong Kong Island and seven in Kowloon—ten in total. Construction has already started on all of them.
The Kowloon properties are progressing faster. We should be able to open them between March and April. The ones on the Island will take a bit longer."
"Why's that?" Yang Wendong asked.
"I discussed it with Mr. Liu," Zheng Zhijie said. "Hong Kong Island is more affluent and densely populated, so we're building small malls centered around Carrefour stores.
Kowloon, on the other hand, is less developed. There, we're just building standalone supermarkets."
"Alright, sounds good." Yang Wendong nodded. "Focus on getting the Kowloon locations completed quickly."
"Understood," Zheng Zhijie said. "Also, ParknShop's expansion has slowed down. Mr. Liu investigated—they've run into logistical issues. Their scale got too big too fast, and now they're facing problems with supply chains, warehouse management, and pricing."
Yang Wendong laughed. "Looks like they've learned the hard way—running a supermarket isn't as easy as it looks."
Even decades from now, with mature logistics and powerful digital tools, many people would still lose money running supermarkets.
And in this era—without computers or real-time communication—everything had to be done manually. Even Walmart and Carrefour had to learn step by step.
"Exactly. So in the short term, Carrefour doesn't face much of a threat," Zheng Zhijie said with a smile.
"Still, we can't underestimate them," Yang Wendong added. "Let's just follow our own plan. If Hongkong Land wants to expand ParknShop quickly, let them. The biggest cost in retail is rent. If Jardine is serious about this, they'll eventually fix their internal problems."
That's why Yang Wendong was quietly waiting for the coming real estate crash. When it hit, Hongkong Land would suffer heavy losses, and its support for ParknShop would likely waver.
More importantly, that would be his chance to scale up massively—in both real estate and retail.
"Got it," Zheng Zhijie said with a smile.
Yang Wendong then asked, "Is Changxing Real Estate still acquiring properties?"
"Yes," Zheng Zhijie replied. "But per your last instructions, we've scaled back. Right now, aside from supporting Carrefour, we're only buying street-level commercial spaces and high-quality office buildings on Hong Kong Island."
Yang Wendong thought for a moment. "Okay. From now on, aside from what's needed for Carrefour or our other companies, pause all acquisitions. You can continue current negotiations, but that's it.
I want you to gather capital and focus on investing in the Kwai Chung area. Not in new buildings—but in land near the coast or old buildings—industrial or commercial, doesn't matter. Just acquire whatever you can."
The real estate crisis would officially hit in 1966, but by 1965, signs of stagnation and gradual decline had already begun, triggered by a run on Hang Seng Bank. From that point on, the property market in Hong Kong fell into a slow downturn.
That meant the current real estate boom had only about two years left. Yang Wendong knew he had to start pulling back from the aggressive, unchecked investments of the past few years.
By next year, he would begin liquidating non-premium properties to free up capital—and then patiently wait for the crisis to break.
"Investment in Kwai Chung?" Zheng Zhijie asked in surprise. "Mr. Yang, are you planning to build a large-scale industrial park over there like we did in Kwun Tong?"
Yang Wendong shook his head. "No, but I'm optimistic about the area's future development."
Once the Kwai Chung container terminal was announced, large amounts of capital would pour in. Even before the port actually opened, just a government announcement would send land prices soaring.
And the economic impact of a container port was far beyond anything a 10,000-person industrial park could achieve.
Because of how capital interests were structured, Yang Wendong might not be able to directly share in the terminal's profits. But if he controlled large amounts of land just behind the port, that was nearly the same thing.
Zheng Zhijie nodded. "Alright. Land over there is still really cheap anyway."
"Mm," Yang Wendong nodded in agreement.
Peripheral lands were dirt-cheap at the moment, barely attracting any attention. That meant even if a real estate crash did hit, how much lower could prices really fall? Most plots were already at rock bottom.
Zheng Zhijie added, "Mr. Yang, the government just announced a new land auction for a prime site on Queen's Road Central. The total area is 25,800 square feet, and they've set the plot ratio at 12.
Officially, the auction is meant to raise funds for water purchases. It's scheduled for next month, on the eighth day of the Lunar New Year—Lantern Festival."
"That's fast. They're moving quickly," Yang Wendong nodded. "A 12 plot ratio means you can build an office tower with 300,000 square feet of floor area. Not bad."
Three hundred thousand square feet—that's about 30,000 square meters. In the future, this might not seem like much for an office building, even in a mid-tier mainland city. But in this era's Hong Kong, that was substantial.
Buildings at the time rarely exceeded 20 stories. With an average of about 1,000 square meters per floor, that was pretty typical for low- to mid-rise towers. Only the tallest buildings had larger floors—due to safety and structural constraints.
Zheng Zhijie nodded. "Exactly. The government clearly wants a good price for this plot. Every major developer has already registered, including big British firms like Jardine and Wheelock."
"As expected. These British firms might not be skilled at developing properties, but they love crowding into Central," Yang Wendong said indifferently. "What about Chinese developers? Any participation?"
"There are thirteen Chinese real estate firms registered," Zheng Zhijie said. "But the auction includes more than just this land, so it's unclear which firms are targeting this specific plot.
Though I heard Hang Seng Bank is eyeing this one—they want to build a new headquarters."
"Looks like Hang Seng is doing well," Yang Wendong said with a chuckle. "Didn't they just build a new HQ two years ago? And now they're already moving?"
"Hang Seng's business has been booming this past year," Zheng Zhijie explained. "They've long partnered with Chinese factories in Hong Kong. In fact, in the early days, many struggling factories survived thanks to Ho Sin Hang personally backing them despite the risk.
Now that industry's exploding, Hang Seng is basically printing money. And because industrial loans aren't collateralized, their interest rates are sky-high—often 10% or more."
"Banks that aligned with industrial growth made a fortune," Yang Wendong nodded.
In 1960s Hong Kong, the real estate sector was large, but not necessarily more profitable than industry—especially with the rise of Changxing Industries, which had created a whole network of high-quality suppliers and subcontractors.
HSBC, Hang Seng, and even Liu Chong Hing Bank had grown rapidly by backing local industry. Meanwhile, banks like Standard Chartered, Bank of East Asia, and Bank of Canton missed the boat entirely.
Of course, industrial development wasn't the only factor influencing a bank's success—but early bets on industry usually reflected a broader strategic vision.
These combined factors helped elevate Hang Seng to the point where it even threatened HSBC and Standard Chartered's dominance—ultimately laying the groundwork for the bank run crisis two years later.
Zheng Zhijie took out a folder. "Mr. Yang, here are the full details for the new land parcel. There's also information on the surrounding commercial developments."
"Good." Yang Wendong reviewed the documents carefully. "Let's register for the auction. This site's location is just as good as the Four Seasons Hotel plot."
These days, he had little interest in ordinary land. By 1966–67, there would be plenty of available sites.
But prime plots in Central were a different story. Even in 1967, there would be few sellers—and supply was always limited. Most of these properties had long been controlled by old-money British firms, making it nearly impossible for new Chinese developers to break in.
In the original timeline, even by the 1980s—when Chinese capital finally overshadowed British capital—Central real estate remained hard to obtain. As late as the 21st century, nearly half of the district was still in British hands.
"What do we plan to build there?" Zheng Zhijie asked. "Hold it long-term? Sell part? Or go half-and-half?"
Yang Wendong shot back, "Did the government impose any restrictions?"
"No. But the application requires a development plan. There's no real enforcement, though. The government won't investigate—unless economic conditions change drastically. In the short term, whatever we declare, we'll be expected to follow through."
"Then declare we'll build an office tower and hold the property long-term," Yang Wendong said.
In Central, Yang Wendong wouldn't sell—especially not just because of the 1966 price drop. That would be foolish. He might never get another chance to own a full office building in that location again.
Zheng Zhijie added, "Understood. One more thing—Changxing Real Estate has always partnered with Hang Seng and Bank of East Asia for financing. But Hang Seng is now competing for the same plot. That puts us in direct conflict. Should we work only with Bank of East Asia this time?"
"This deal will need at least HK$20 million," Yang Wendong said after a moment of thought. "Reach out to HSBC. They helped me a lot with the ship loans. Time to return the favor. If the terms are good, we can give them the whole loan—or part of it."
As a time traveler, Yang Wendong knew that buying a fleet of supertankers was virtually risk-free. But from HSBC's perspective, even if Saunders believed in the shipping market, providing unsecured loans was still a major risk.
High interest rates helped, but still—they'd taken a chance on him. It was only right to reciprocate by involving them in other lending opportunities. It would strengthen the relationship.
"Understood," Zheng Zhijie said. "I'll prepare the documentation."
"Mm." Yang Wendong nodded. "Also, Old Zheng—starting this year, Changxing Real Estate needs to begin pulling back. Aside from a few exceptional investments, we're scaling down our acquisitions.
From 1958 to now, Hong Kong property prices have tripled. I think the current bubble is getting out of hand."
Zheng Zhijie paused and asked, "What about residential properties?"
Yang Wendong replied, "We'll continue building residential this year—but keep it high-end. We'll reevaluate next year."
The advantage of residential was quick capital return, which helped reduce risk. But knowing a property crash was coming, pushing mid- or low-end housing would feel like taking advantage of ordinary people.
That's why Changxing had always targeted the high-end segment. Those buyers were financially resilient, and the homes weren't typically their entire life savings.
"Got it," Zheng Zhijie said.
He understood: Changxing Real Estate was now entering a strategic contraction phase.
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