Chapter 121: The Banking Game
"Ms. Yip, pleasure to meet you." The three exchanged polite handshakes.
Although this was their first face-to-face meeting, Yang Wendong and Wei Zetao had already become familiar with the contact person's name through previous phone conversations. The woman before them, Yip Zhirong, had been a client manager at Hang Seng Bank for over 20 years, specializing in high-value corporate accounts.
Clearly, despite there being no formal partnership yet, Hang Seng Bank was taking Changxing Industrial seriously. That likely had a lot to do with the transaction records provided by Liao Chong Hing Bank and the market potential of Changxing's products.
Yip Zhirong smiled and gestured. "This way, please."
"Thank you."
The three of them entered the headquarters of Hang Seng Bank—a twelve-story building. Though in later times even a small county-level city in mainland China wouldn't consider a building of this height a "skyscraper," in this era, it certainly qualified.
Back in the 1960s, even newly built towers in Central typically had only 20 or 30 floors. Buildings over 40 stories didn't begin appearing until the 1970s, and it wasn't until the 1980s that they became the norm for new construction.
This was because building height was closely related to land price. The higher the price of land, the taller developers would build. If land was cheap, it was often more cost-effective to buy multiple lots and build several mid-rise buildings than to construct a single high-rise.
Even when Yang Wendong started investing in real estate later, he planned to follow this same logic.
As they walked, Yip Zhirong casually explained Hang Seng's development over the years, emphasizing their financial strength and especially their soon-to-begin 22-story headquarters project in Central.
Before long, they arrived at a private office. Outside the window was a panoramic view of Victoria Harbour. Across the water, the docks of Wharf in Kowloon were bustling with ships queued for loading and unloading.
An assistant brought them tea and quietly left, giving the three space to chat.
"Mr. Ho from your bank is truly impressive," Yang Wendong said with a polite smile, playing the game of business flattery. "To build Hang Seng Bank up into the third-largest financial institution in Hong Kong, just behind HSBC and Standard Chartered—that's no small feat."
And it wasn't entirely empty praise. Hang Seng's explosive growth in the coming years would eventually lead HSBC to acquire them—not because of a financial crisis, but because the British banking giant saw them as a growing threat.
If Hong Kong hadn't been a British colony, where British capital enjoyed preferential treatment, then given a level playing field, it would have been hard to say which bank might rise to the top twenty years down the line.
But history had no "what ifs." Chinese capital at the time was mostly forced into sectors the British banks didn't care about—like manufacturing and heavy industry. If they ever intruded on British turf, they'd likely be targeted, as happened with companies like Hang Seng and Dairy Farm.
It wasn't until the late 1970s that things began to shift.
Yip Zhirong smiled. "You flatter us. Hang Seng was founded to serve Hong Kong's Chinese population. Back then, British banks wouldn't even work with Chinese clients."
"And they're not that much better now," Yang Wendong said with a faint smile.
By the late 1950s, British banks had improved slightly—partly because Chinese capital had grown too big to ignore. Even the colonial government had begun courting Chinese tycoons, as the crumbling British Empire no longer had the strength to manage all its colonies.
Still, most of the big British banks only worked with Chinese tycoons. Regular citizens? They couldn't even open an account.
Yip Zhirong nodded. "That's true. But as Hong Kong's economy keeps growing and the Chinese community continues to dominate the population, this market will only expand further. The arrogance of British banks will only hurt them more in the long run.
Especially now, with elite entrepreneurs like Mr. Yang appearing more and more—that presents a real opportunity for us local Chinese banks."
"You're too kind," Yang Wendong said with a modest smile. "But if more Chinese tycoons rise up, I suspect British banks will just fight harder for those clients. Maybe the top executives at HSBC don't care, but the Chinese staff working under them certainly will."
Even HSBC had many Chinese employees—some even in middle and senior management roles. HSBC's core operations were based in Hong Kong. Even if their early clients were all British firms, those firms also employed countless Chinese workers.
The drive and competitiveness embedded in Chinese culture, or more broadly East Asian Confucian culture, had become legendary. In earlier decades it was the Japanese, then Taiwan, Hong Kong, and South Korea, and finally mainland China after economic reforms. One wave after another had transformed East Asia into the new center of the global economy.
It was a phenomenon the Western-led world had never seen anywhere else. Sure, geopolitics played a role, but the inner drive to grow stronger was the real engine.
"So in the end, it still comes down to service," Yip Zhirong agreed. "As the largest Chinese bank in Hong Kong, our main clientele is naturally Chinese—especially those in real estate and manufacturing.
Mr. Yang, as one of the rising stars in Hong Kong's industrial sector, we very much hope to build a long-term, mutually beneficial relationship with your company."
"I'd like that too," Yang Wendong replied. "So, may I ask—can Hang Seng meet our current loan request?"
A faint smile appeared on Yip Zhirong's lips. "Mr. Yang, we are indeed very interested in working with your company. However, your request for a HKD 4 million loan without significant collateral is unprecedented for us.
That said, our internal team is very optimistic about you, so we've come up with an alternative proposal. Would you be willing to hear it?"
"Please go ahead." Yang Wendong didn't mind being turned down. In the world of business, this was entirely normal. If you got offended every time a deal didn't go through, you weren't cut out for the game.
Business was, after all, about negotiation and compromise. Even dominant players like Coca-Cola couldn't just walk into negotiations with major distributors or bottling partners like Swire Group and expect everything to go their way.
Yip Zhirong continued, "We understand your future plans. The urgency in your loan request stems from the need to rapidly scale production.
But to be frank, your current expansion speed is a bit… too fast. You've already outpaced even last year's growth rate of Cheung Kong Holdings."
"If your side can slow things down and divide the expansion into three or four phases, then as long as the early-stage production increase proceeds smoothly, Hang Seng Bank will certainly provide full support for the subsequent funding," said Yip Zhirong.
Yang Wendong's expression didn't change. He asked back, "So what you mean is, if we slow down our expansion, the bank's risk will be lower?"
He wasn't upset. It was common practice for banks to suggest ways for clients to reduce risk—that was part of their job.
But only he knew how big the market for Post-it notes would become in the future. Even if others could make some educated guesses, they wouldn't dare to go all in.
Yip Zhirong maintained her professional smile and replied, "Yes, it would lower our risk, but it also reduces the risk for Changxing Industrial. That benefits both parties."
Yang Wendong smiled lightly. "That sounds reasonable. But if that's the approach, I could go to any bank. Why would I choose Hang Seng?"
Yip Zhirong nodded. "That's fair. With lower risk, of course, many banks would be willing to cooperate with someone like Mr. Yang. However, you also know the reputation Hang Seng has in Hong Kong. Our support services are excellent, and in terms of interest rates, we're prepared to make some concessions."
"What matters most to me is that the funds are disbursed on time," Yang Wendong said after a brief pause.
Yip Zhirong hesitated briefly, then said, "How about this—we compromise. Our bank can first lend you HKD 2 million. Once that's used effectively, and we can see how your company is performing, we'll disburse the remaining funds."
Yang Wendong immediately shook his head. "That won't work. What if you don't release the second batch? I'll have already sunk huge costs into infrastructure but won't have the money to buy equipment or raw materials. Who am I supposed to turn to then?"
He could probably make it work if he had to, but what he needed now was funding security. Even if it was a loan, the more cash in hand, the better.
"Mr. Yang, why the rush to complete all the infrastructure at once?" Yip Zhirong asked, trying to reason with him. "Wouldn't it be better to split it in half?"
"If Hang Seng can't agree, perhaps it's time we considered other banks," Yang Wendong said with a faint smile. "Time is just as valuable to me. Doing half now and the rest later might sound easy, but in practice, that would delay things by at least six months."
Seeing that she couldn't persuade him, Yip Zhirong turned to look at Wei Zetao. After a moment's thought, she said, "Gentlemen, for such a large loan without sufficient collateral, even if we were to approve it, getting final sign-off from the board would take time. That's true for all banks.
Even at HSBC or Standard Chartered, while their CEOs may have more decision-making power due to different internal systems, any unsecured loan like this will face intense scrutiny.
And let's be frank—both of you are Chinese. British banks might accept your deposits, but loans? That's a whole different story."
"Hmm." Yang Wendong nodded, offering no objection.
She was right. Every bank, even Liao Chong Hing, had basic risk controls. The executives weren't stupid. Unless there was bribery or some other illegal manipulation, nobody was handing out large unsecured loans casually—and Yang had no interest in crossing any legal lines.
He also recalled from history that the businessman Bao Yugang had once applied for a loan from HSBC. Despite having collateral, he was rejected until he got a Japanese company to guarantee the deal.
Obviously, 3M wasn't going to provide that kind of guarantee for him. If they were, they would've already directly funded his operations.
At that moment, Wei Zetao suddenly interjected, "Miss Yip, what if the amount isn't HKD 4 million—what if it's HKD 2 million, or even just 1 million?"
"Then it would be much easier," Yip Zhirong admitted. "HKD 1 million would be a relatively simple process. But based on your application, that won't be enough. And it's not like we're saying we won't release a second installment. Why not go for the full amount?"
"The total amount is large, yes," Wei Zetao replied with a smile. "But if you think the risk is too high, why not share it among a few banks?"
At that, Yip Zhirong's expression shifted. She clearly didn't like that suggestion. "Mr. Wei, our bank alone is capable of handling it!"
"But you're worried about the risk being too high," Wei said, still smiling. "So how about this—Hang Seng covers half of it. That way, even if the worst-case scenario happens, your losses would be cut in half."
"But…" Yip Zhirong wanted to say more, but there was no good argument against it. High-risk, high-value loans were bound to take time to approve.
Wei Zetao continued, "Our future investment plans will require a large amount of funding in a short period of time. If you give it to us in two installments, the risk is actually higher for us.
Wouldn't it be better if we all lowered our risks and closed the deal quickly? Besides, this is just the first step. If our business grows, larger deals down the line won't be a problem, right?"
"That's actually not a bad approach," Yang Wendong nodded in agreement.
Even if splitting the loan across multiple banks didn't change how risky he appeared on paper, it would reduce the financial exposure of each bank—making it easier for him to secure the funds quickly.
And that was what he needed most right now.
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