Chapter 350: Overseas Investment in the Retail Industry
Wei Zetao asked, "Yang Sheng, are you thinking of investing in commercial properties here in Taiwan?"
"Maybe a little investment," Yang Wendong said after a moment of thought. "You know that Changxing Real Estate is currently pursuing a contraction strategy in the Hong Kong market. But we still have plenty of free capital on hand. Putting some of it into Taiwan isn't a bad option."
There were less than two years left until the real estate crisis. Under Yang Wendong's direction, Changxing Real Estate had already begun pulling back, focusing its investments on securing proprietary properties for Carrefour, and scaling back everywhere else.
This kind of retreat couldn't be hidden from Hong Kong's real estate firms or the media. Word had already spread in the market, and many were still convinced that property prices would continue to rise. Some even mocked Changxing Real Estate for being too conservative.
But Yang Wendong didn't care. Let the outsiders speculate all they liked—come next year, Changxing Real Estate would begin offloading massive amounts of property. In fact, it would rely on those same property-optimists to pick up the pieces at the top of the market.
This approach would free up large amounts of capital. After all, Carrefour's store construction could be funded through loans. There was no need to use their own money, and these projects didn't require much capital to begin with.
Wei Zetao commented, "But Taiwan's commercial real estate isn't very developed. There aren't many notable real estate firms here, and the ones that do exist are probably all tied closely to the government. Buying into them wouldn't be easy."
"I'm not planning to invest in local real estate companies," Yang Wendong replied. "I'm thinking of investing in supermarkets or cinemas. But since the law doesn't allow direct investment, we'll have to form joint ventures with Taiwanese partners."
Wei Zetao thought for a moment. "Perhaps we can work with Wang Yongqing. He's a Taiwanese native. We could sign a future buy-back agreement to protect our stake."
"I'll think about it," Yang Wendong said with a nod. "This is something I'd need to discuss directly with Wang Yongqing."
Later, at the hotel, after finishing all check-in procedures, Yang Wendong welcomed a guest.
"Mr. Wang, it's good to see you," Yang Wendong said politely as he shook hands with a middle-aged man.
That man was none other than Wang Yongqing, the founder of Formosa Plastics Group. Yang Wendong had great admiration for him. In the future, he would become known as the "Plastic King of Asia."
Anyone who could grow a business into a global giant was undoubtedly a leader among leaders.
Wang Yongqing laughed. "Yang Sheng, long time no see. Your business is growing fast. Even here in Taiwan, I often see you mentioned in the news."
Yang Wendong asked, "They talk about me in the news here?"
Wang Yongqing smiled. "Yes. Taiwanese Chinese, like those in Hong Kong, admire strength. Now that politics have stabilized, everyone's focused on economic development. A self-made Chinese businessman like yourself is naturally admired.
Especially since you started from nothing and built an empire in just a few years—you've become a role model among Chinese communities."
"Haha, I didn't expect to be rated so highly here," Yang Wendong laughed.
Given the scale of the Changxing Group, it was only natural that overseas media would start paying attention. Among Chinese entrepreneurs, he already ranked near the top. In fact, if you only considered first-generation entrepreneurs, he was likely number one. Most other prominent Chinese business families had succeeded through multiple generations of effort.
"You should consider increasing your investment in Taiwan," Wang Yongqing said. "The government would welcome it."
Yang Wendong raised an eyebrow. "What, are you here on behalf of the government to convince me?"
Wang Yongqing chuckled. "Half and half. They did approach me about it."
"That makes sense." Yang Wendong nodded. "But let's talk about what we came here for first."
"Right," Wang Yongqing said. "I wanted to discuss Formosa Plastics. In recent years, Taiwan and Southeast Asia have seen rapid economic growth, and demand for plastic has soared. So we're planning a major investment—to build a large plastic production base and double our capacity to 1.2 million tons of plastic and nylon."
"You're hoping I'll invest according to my shares?" Yang Wendong asked. "No problem. I'll contribute proportionally."
For companies like Formosa Plastics and Walmart—future global giants—Yang Wendong had no hesitation. It wasn't just about financial returns; partnerships with such companies would benefit his entire industrial ecosystem.
The larger Formosa grew, the cheaper Yang Wendong could source raw materials. At this point, plastic had become Changxing Group's most consumed material. It wasn't just Changxing Industrial—even Glory Electronics' future home appliance line would heavily depend on plastics.
"That's great," Wang Yongqing said. "But the funding needed for this expansion is significant. I've estimated it will cost about $6 million. For Formosa, that's a heavy financial burden.
Also, since many of the machines need to be imported using foreign exchange, Taiwan's government might not approve such a large outflow. So I'm hoping to borrow U.S. dollars from a Hong Kong bank."
"Would Taiwan's government really be that short-sighted?" Yang Wendong asked. "Once your production expands, your exports will earn back the foreign exchange."
"You're right," Wang Yongqing admitted. "But the core issue is confidence. I have faith in the plan. You do too. But the government doesn't. They're worried—what if we scale up and then can't sell?"
"Fair enough. They're looking from a different perspective and probably aren't as professional," Yang Wendong nodded.
In fact, if someone other than Wang Yongqing had come to him with this plan, he would've been extremely cautious. The future of plastics was bright—but how do you know that this company will dominate? Even Yang Wendong, as a time traveler, couldn't guarantee success in a non-creative industry.
$6 million wasn't a small amount. Even for Changxing Group, losing that much would hurt.
Wang Yongqing continued, "That's why I think borrowing from a foreign bank is the easiest route. I originally considered Japanese banks, but many of them are tied to large conglomerates. They wanted equity and decision-making power, so I declined."
"I'll arrange for HSBC to send someone," Yang Wendong said. "You try to persuade them using your own performance metrics. If they still won't cover the full amount, I'll guarantee the rest—but my guarantee won't be free."
"Understood," Wang Yongqing laughed. "I've already prepared all the necessary documents."
"Alright." Yang Wendong added, "If it turns out there's still not enough funding, I can invest more directly. But think carefully before asking—I won't push you to accept."
Getting in early on high-potential ventures was ideal. But there had to be limits. For example, if outsiders acquired too much of Walmart, Sam Walton might've simply rebranded and started over.
There needed to be balance—especially in the early stages. A modest initial investment was best. Once the company grew or went public, then was the time to increase holdings. Greed too early could ruin everything.
Now, Yang Wendong was offering this opportunity to Wang Yongqing, which could be seen as a sign of respect. If Wang agreed, it would naturally be ideal, but even if he didn't, it didn't matter much. The most important thing was that both sides could continue cooperating long-term.
"Mm, Mr. Yang, for now, I'm not accepting any outside investment," Wang Yongqing said after a moment of thought. "Actually, I was only considering it because I wanted to rapidly expand the market. But it's not that urgent."
Yang Wendong smiled and said, "I understand. For our own industries, we also prefer holding more equity, so I'm merely making a suggestion. You're free to decide."
Chinese-funded enterprises often had a habit of maintaining majority control. They would rather keep operations small and manageable than sacrifice ownership. Even in the internet era of the previous life, where large-scale financing was a must, dual-class share structures were still used to maintain control by founders.
Yang Wendong applied the same logic to his own ventures.
"Very well," Wang Yongqing continued. "The second matter is one you already know. The Taiwan government entrusted me to speak with you, hoping that you might consider investing in Taiwan—especially in labor-intensive industries that can create large-scale employment opportunities."
"That's quite the coincidence. I was just discussing this very issue with Old Wei," Yang Wendong said with a smile. "So, what kind of incentives can Taiwan offer?"
Negotiating with the Hong Kong government for investment was often meaningless. The British Hong Kong authorities prided themselves on "free market principles." Their attitude was essentially "come if you want, don't if you don't." Unless unemployment numbers grew so large they threatened social stability, only then would they consider offering any incentives.
Other more typical governments, however, were usually willing to offer perks for foreign investments. In the 1980s Mainland China, for example, factories that could earn foreign currency and create thousands of jobs were often given extensive benefits.
Wang Yongqing replied, "The specifics would have to be negotiated by your people, but generally speaking, it could include free land for appropriate projects, and tax incentives for 3 to 5 years."
"Mm, I'll discuss it internally," Yang Wendong nodded. Then he asked, "What if I want to invest in the service industry in Taiwan?"
"The service industry? You mean Carrefour?" Wang Yongqing asked, familiar with some of Yang Wendong's major holdings.
Yang Wendong nodded. "Yes. Carrefour is also looking to expand overseas. Taiwan could be the first foreign market."
"Direct investment definitely won't work. The law doesn't allow it," Wang Yongqing replied. "But a partnership with local capital could be viable—something like the common franchise model, where your stake doesn't exceed 33%. The government hasn't completely closed the door. In fact, they're hoping local service industries can learn from overseas experience."
"I understand," Yang Wendong said thoughtfully. "Then how about we work together on this, Mr. Wang?"
"Me?" Wang Yongqing looked puzzled. "But I've never been involved in the retail industry."
"That doesn't matter," Yang Wendong explained. "What I need are political resources and local connections, which you have. As for operations, I can send my own people or recruit locally in Taiwan."
Wang Yongqing was already Taiwan's largest plastic supplier and had considerable influence. In the next five to ten years, his industrial empire would grow even faster, elevating his standing even more. This aligned perfectly with Yang Wendong's strategy of finding local business conglomerates to partner with overseas.
Wang Yongqing had yet to develop a "conglomerate mindset" due to his relatively short time as an entrepreneur, but he met the criteria.
"That could work," Wang Yongqing nodded. "So how would our partnership work exactly?"
Yang Wendong thought for a moment. "I'll send someone to discuss the details with you, and also with the Taiwan government. But there's one condition—if the government later allows wholly foreign-owned ventures, I want to be able to buy back the equity."
Real estate in Hong Kong was about to hit turbulence, so it made sense to redirect some capital toward another region with a large ethnic Chinese population—Taiwan. Though Taiwan's economy wasn't as strong as Hong Kong's, it had a much larger population and, all things considered, was potentially an equally sizable market.
If Taiwan could become a base for Carrefour's retail operations, it would be a huge advantage for future expansion. In the short term, it could also optimize the supply chain, reduce costs, and help Carrefour in Hong Kong compete with rivals like Jardine Matheson and other challengers.
Real estate was another angle. Prime areas like downtown Taipei or vast suburban lands were still accessible. But by the late '60s and early '70s, when Taiwan entered a real estate frenzy, getting in would be much harder.
"Alright," Wang Yongqing said casually. He wasn't overly concerned.
He understood that this retail partnership was one of mutual benefit. Yang Wendong needed his local resources, while he stood to gain some profit and further cement the relationship between them.
What mattered more to him was planning his new industrial base.
"Good. I'll take care of it on my end," Yang Wendong nodded.
Taiwan's market wasn't enormous, and both men understood that neither of them would rely heavily on it.
In the days that followed, Yang Wendong took a short vacation in Taipei with Su Yiyi and their eldest son, then returned to Hong Kong.
Monday, June 10
At Changxing Tower, Yang Wendong met with a long-unseen subordinate, Lin Youtian.
"Mr. Yang, hello," Lin Youtian greeted him politely with a smile.
"Sit, Ah Lin," Yang Wendong smiled back.
Lin Youtian wasn't very old—just in his early thirties. Though still older than Yang Wendong, he was younger than most of the management team.
"Thank you, Mr. Yang," Lin Youtian said as he sat. An assistant served him tea.
Yang Wendong said, "Ah Lin, you've worked hard these past few years in the U.S. Many of the group's industry channels and research centers over there were built by you."
For their industrial products, they used 3M's distribution network in the U.S., but it still required on-the-ground maintenance. Electronics and small consumer goods that didn't go through big distributors relied on Lin Youtian's efforts to establish various channels, laying the groundwork for future large-scale entry of their products into the American market.
Lin Youtian smiled modestly. "Mr. Yang, you're too kind. I was just doing my job."
"Mm," Yang Wendong nodded. "I called you back to Hong Kong this time because there's something important I need you to handle."
"What is it? Please give the order," Lin Youtian asked.
Yang Wendong said, "I want you to go to Europe and help me acquire stakes in a few European companies. These are all retail groups that I've been researching for years and believe have strong potential."
He handed over a sheet of paper.
Lin Youtian took it and read the list: IKEA (Sweden), Carrefour (France), TESCO (UK), Auchan (France), and ALDI (Germany), among others. Eleven names in total.
After reading, Lin Youtian asked, "I haven't heard of these companies before. Are you looking to buy them outright or just invest?"
"Just invest," Yang Wendong replied. "But if we can build a strategic partnership like we did with Walmart, that would be ideal. If not, simple investment is fine."
"Got it," Lin Youtian responded. "I'll leave for Europe immediately to research these companies."
"Good," Yang Wendong nodded. "You don't need to acquire stakes in all of them. Just see what's possible. If there's progress, contact me anytime."
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