Chapter 213: Business Is Business—Everything Is About Interest
Yang Wendong wasn't surprised at all by the request. He calmly said, "Mr. Liu, I understand your position. But over the past few years, the loans I've taken from your bank amount to nearly HK$20 million. That's a massive sum—I simply can't repay it all at once."
Indeed, during multiple rounds of industrial expansion and real estate investments, Liu Chong Hing Bank had always been one of the few willing to offer high credit limits.
Although the interest rates were higher than those from other banks, for Yang Wendong—who used financial leverage to generate profit—the size of the loan was far more important than the interest rate.
That was why Yang had authorized his managers to prioritize cooperation with Liu Chong Hing whenever possible. And with proper collateral, the bank had always been quick to disburse funds.
Just at the start of this year, Changxing Real Estate borrowed over HK$7 million from Liu Chong Hing for purchasing land and property in Kwun Tong. Combined with other loans, the total was close to HK$20 million.
Liu Liewen said, "Mr. Yang, I may not have access to your internal data, but after all these years of working together, I have a rough idea. Your factory's products sell globally, and your profit margins are far higher than the average Hong Kong manufacturer. I know you have the capability—so I was hoping you'd consider helping us, for the sake of our long-standing relationship."
"If I could help, I definitely would," Yang Wendong replied. "But as you know, I've just committed to the Ten-Thousand-Person Industrial Park in Kwun Tong. Just the land purchase and site preparation required me to borrow HK$20 million from HSBC.
In terms of real estate, the market downturn hasn't only affected your properties—mine have taken a hit too. And you know how much I've invested in the property market this past year—and that doesn't even include the assets financed through other banks.
As for shipping, I bought eight vessels, and according to my internal roadmap, I'll need to purchase more. All of this requires huge amounts of capital."
The first two statements were absolutely true. On paper, Changxing Group was under considerable financial pressure.
If it weren't for the immense profitability of Changxing Industrial, even someone with future knowledge like Yang Wendong wouldn't have dared to be this aggressive.
Having a bright future was one thing—being unable to manage risk could sink you long before you reached it.
As for the cost of the cargo ships, neither he nor Tung Chao-yung (Tung the Ship King) had ever publicly disclosed the price of the used vessels from the U.S. Outsiders only knew average costs, which meant they probably believed seven ships had cost nearly HK$10 million.
"Even you can't help?" Liu Liewen asked, looking uncertain. He didn't know the exact state of Changxing Group's finances—he was just here to try his luck.
After all, no one was obligated to help. As much as they liked to say they were long-time partners, the truth was that it had always been just business.
Yang had received funding; the bank had earned interest. Mutual benefit—nothing more.
Yang Wendong paused for a moment and said, "Mr. Liu, a bank run like the one Liu Chong Hing is facing has never happened in Hong Kong before.
But overseas, it has. You should know—during situations like these, no one dares to inject capital. The risk is just too high."
Liu nodded. "I know. That's why I'm not asking you to invest your own money. I just hope we can end our cooperation early and you repay the loans."
"Mr. Liu," Yang shook his head. "The reason your bank is facing a run is that it can't retrieve the funds it loaned out. And I'm in the same boat. The money you lent me has already been invested into projects. I can't liquidate those quickly."
Liu didn't push. He knew it was unreasonable. Their agreements were legally binding—Yang was under no obligation to repay early, as long as he made his scheduled payments.
Yang added, "Actually, you could sell my loans to another bank. I'd be fine with that. It doesn't matter to me who I repay."
Liu Liewen forced a smile. "My father has already approached several banks. Either they're unwilling to help, or they're offering such low prices that we'd be taking a huge loss."
"Under normal circumstances," Yang said after sipping some tea, "you'd probably get a decent price—not a profit, but not a loss either.
But because you're desperate for cash, buyers are offering bottom dollar. That's expected."
In business, it was already considered merciful if others simply stood by without kicking you while you were down.
From what Yang knew, Liu Baoshan had made quite a few enemies over the years.
In Hong Kong, banks had a tacit agreement on interest rates. Big banks offered slightly lower rates, while smaller ones offered slightly higher rates. That way, everyone had their niche and could make money.
But Liu Chong Hing wasn't exactly a small bank. Yet it offered interest rates even higher than the smallest institutions. Naturally, this offended competitors.
Worse still, Baoshan had a habit of throwing shade during interviews—mocking risk-averse banks and conservative operations. Over time, his connections dried up.
Even friends had tried to warn him to pull back on risk, to stop pumping so much depositor money into real estate. His response? Sarcasm and mockery.
He had no one to blame but himself.
"Yes," Liu admitted. "Now that we're in this mess, who would help us?"
Yang smiled faintly. "Mr. Liu, if this happened to Hang Seng, do you think Liu Chong Hing Bank would help?"
"No," Liu replied after a moment of thought.
"Exactly," Yang said. "In business, everyone acts out of self-interest. If you want others to help, you need to offer them a real incentive.
Any bank willing to lend to you now would only do so for massive profit.
Otherwise, no one will touch this—and honestly, they'd still be taking a risk. They haven't thoroughly vetted your loan portfolios. You're asking them to act on blind faith, and your timeline is tight. If I were them, I'd be cautious too."
Given how poorly Liu Chong Hing had managed risk in the past, no one could say how many bad loans were hidden in their books.
No rational bank would buy those loans without serious due diligence. Otherwise, they might be walking into a financial trap.
"You're absolutely right," Liu said. He'd always known about his father's aggressive style. He himself had tried to implement some risk controls—but outsiders didn't know that.
And right now, it didn't matter. The damage was done.
Liu Liewen asked sincerely, "Mr. Yang Wendong, you have sharp insight. Then tell me, what do you think we should do about the current crisis at Liu Chong Hing Bank?"
Yang Wendong replied calmly, "Selling off loan assets at reasonable prices is impossible right now. The only solution is to liquidate assets that are widely accepted by the market.
These kinds of assets are easier to sell quickly and meet your bank's urgent need for cash. Their prices are also relatively stable. Even if you take a small loss, it won't be as devastating as selling off bad loan portfolios."
Liu Liewen immediately understood and asked, "You're referring to our family's real estate properties?"
Yang Wendong nodded. "Correct. Or, if you have shares in high-quality listed companies, those would work too. Both are assets that can be converted to cash within a short timeframe."
Historically, banks have always had a love affair with real estate. Its volatility is limited, and as long as there's no major political or economic crisis, prices will generally rise over the long term.
Stocks are a bit more volatile, but shares in solid companies are still valuable and accepted.
Liu Liewen sighed. "We've thought of that too. My father has already started trying to sell off some of our properties. But the prices we're being offered are far below expectations."
Yang Wendong nodded. "That's to be expected. The Hong Kong real estate market is currently in a downturn. And when you're forced to sell, buyers will obviously try to lowball you.
Still, it's better than trying to offload loan portfolios. And from what I understand, your family is only selling off non-core properties. These aren't bad assets, but in this market, you won't get top dollar."
"That's true," Liu Liewen admitted. "Still better than selling our banking operations. Seems like my father wasn't wrong to bet on real estate—it may still be useful in a time like this."
"That's exactly why I heavily invest in property," Yang Wendong said with a slight smile.
If Changxing Group were in crisis today, trying to sell off factories would yield miserable prices. Even their most valuable patents would be severely undervalued.
But real estate has an almost "gold-like" quality. It maintains market pricing. Slash the price enough, and buyers will line up.
Even shipping, which was more profitable in this era, didn't offer that kind of asset security.
"Mr. Yang Wendong, are you also interested in purchasing our family's properties?" Liu Liewen asked after a brief pause.
He wasn't naive. Yang Wendong hadn't treated him like a leper like the others had. Instead, he sat down and seriously discussed solutions. That clearly meant he had an angle.
But that was understandable. Business was business. If the roles were reversed and Changxing Group were collapsing, any bank would also try to squeeze every cent out of them—maybe even kick them when they were down.
There were no true friends in business. Only mutual benefit.
Yang Wendong nodded. "Yes. I don't have enough liquidity to rescue you, but if I can buy some of your properties, I can use those as collateral to get more financing from other banks.
As for pricing—I won't press too hard. Just slightly below market value. This isn't me kicking you while you're down. As a banker, you understand that emergency loans always come with some extra cost."
That was the truth. Short-term emergency acquisitions always came at a discount. It was standard market practice.
Of course, no one knew that Yang Wendong had already prearranged funding from HSBC and Standard Chartered—but only on the condition that he had collateral.
And why wasn't he trying to cut prices more aggressively?
First, if he acted like everyone else, the Liu family might not prioritize him as a buyer. Even if he scored a 20–30% discount today, it would be nothing compared to the long-term value of these premium assets.
Second, he was thinking of his future reputation. By doing a fair transaction at a time of crisis—offering lifelines in a way that still made good business sense—he'd be remembered as someone who didn't exploit others' misfortune. That reputation could become a powerful asset.
"Alright," Liu Liewen said. "I'll have our team send over the full list of properties this afternoon. If any catch your eye, we can discuss pricing directly."
At this point, the Liu family was like a fish lying on a chopping block, waiting to be sliced. If someone was willing to offer fair market-minus pricing instead of going for a total slaughter, that was already a blessing.
"Great, I'll be waiting," Yang Wendong said. He already knew a fair number of Liu family assets, but he still needed exact data before making decisions.
That afternoon, Yang Wendong hosted Liu Liewen for lunch. Then the latter left to continue knocking on doors, trying to convince other clients and banks to help. It was a near-impossible task—but he had no other options.
At 2 p.m., a package of property documents arrived at Yang Wendong's office. He immediately called in Zheng Zhijie to review them together.
Zheng said, "Mr. Yang Wendong, most of these properties match the ones I already investigated earlier.
The most valuable is that Central plot the Liu family bought last year. They paid HK$5 million at the time, and that was only possible because of Liu's strong government ties. The land was earmarked for a new bank headquarters, and the government sold it to them for economic reasons."
Yang Wendong had already spotted the standout entry. He smiled. "A 25-story building. They've already finished nine floors. It was supposed to be completed by year's end and become their new HQ next year. Now, that's just a dream."
The building where they had witnessed the run on Liu Chong Hing last week—that was the current HQ. This planned high-rise was meant to replace it. The site was the former location of China Products Company in Central.
After acquiring the land, Liu Baoshan had planned to build a 25-story skyscraper.
In this era, 25 floors was considered very tall.
Zheng added, "Mr. Yang Wendong, the location of this building is excellent. Based on the plans, the total floor area will be 360,000 square feet. Plus, there's a large shopping mall at the base. It would be perfect as the future headquarters of Changxing Group."
"Agreed," Yang Wendong nodded.
As the business continued to expand, and his reputation grew in Hong Kong, it made sense for Changxing to have a flagship building in Central. It wasn't just functional—it was a status symbol.
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