Chapter 211: The Beginning of the Run on Liu Chong Hing Bank
Yang Wendong's wife had just given birth to a baby boy, and the news quickly spread among a small circle of elite Hong Kong society.
The very next day, several groups came to visit. Zhao Liming, Lin Haoyu, and their families were the first to arrive, followed by several senior business executives under Yang. Later came some close business partners.
Yang warmly welcomed the guests. After they left, he devoted himself to caring for the baby—and quickly discovered one very era-specific issue: diapers didn't exist yet. It was all cloth nappies.
Several days later, at Hong Kong's famous private hospital, the Hong Kong Sanatorium & Hospital:
Yang was sitting with his baby in his left arm and a bottle in his right hand, gently feeding him.
"Drink up," he said softly with a smile.
He had been staying at the hospital with Su Yiyi and the baby over the past few days. As for company matters, he wasn't too worried. He had capable managers in place, and with the direction already set, the operations were running like clockwork.
After a while, the baby fell asleep while drinking, and a nanny came to take him.
Currently, in the hospital suite, besides Yang and Auntie Guo, there were three full-time nannies attending to the mother and child.
Su Yiyi was slowly recovering, though still a bit pale. Yang came over and asked, "How are you feeling?"
"Much better," Su Yiyi replied with a smile. "Our baby is so cute."
"Of course. With our genes, how could he not be?" Yang chuckled.
He glanced over at the baby, peacefully sleeping. The round curve of his cheek reminded him of Crayon Shin-chan.
A week later, Su Yiyi and the baby returned home. Their residence had been thoroughly prepared for their arrival.
Yang now spent more than half his time at home, watching his child grow day by day—a joy greater than earning ten million dollars.
Time flew by, and it was soon June.
Yang returned to the top floor of Ganghua Tower, where the Changxing Real Estate office was located.
"Jili Building is nearly done, right?" Yang asked Zheng Zhijie. "I passed by earlier and saw the main structure's already up."
"Yes," Zheng replied. "The main structure is complete, and the interior work is almost finished. We've been doing construction and fit-out simultaneously. Office furniture is already being moved in, but the air still smells strong—we'll need about a month of ventilation."
"Alright. It's summer now, so the smell should dissipate quickly," Yang nodded. "What about Ganghua Tower? We're short on space, right?"
Ganghua Tower now housed four major departments: the newspaper, the radio station, real estate, and shipping.
In the early days, each unit was small and there was still plenty of room. But after a year of explosive growth, staffing had increased sharply, and the entire Changxing Group headquarters was also based there—it was getting crowded.
Zheng nodded. "Yes, everyone's just waiting on Jili Building."
"Alright. How are things with the projects in Causeway Bay and North Point?" Yang asked.
"We're ready to start selling the presale units," Zheng replied, but hesitated slightly. "It's just... real estate prices have dipped in recent months. I was thinking—should we wait?"
"No need to wait," Yang said without hesitation. "As long as we're not losing money, it's fine. We need to keep the capital flowing."
Although 1958 to 1964 was broadly a bull market, that didn't mean prices climbed steadily every month. In reality, prices rose in waves.
1961 was one such case. Everything was fine early in the year, but by April, price growth had stalled. In May, prices actually dipped—not just a little, but enough to spark fear in the market.
But this was normal. Between 1958 and 1960, many plots had doubled in price. Such rapid increases couldn't continue indefinitely.
After a pause and some panic, the market would self-adjust. Buyers and investors would regroup, and then prices would rise again.
Zheng added, "Also, earlier this year, the 'Fortune Mansion' project in Tai Kok Tsui collapsed because its backer failed elsewhere. Construction halted due to lack of funds, and the owners had to chip in extra money to complete the building themselves. Two banks took heavy losses. The government is now planning to pass new laws to restrict presales, though the exact rules aren't clear yet."
"That's a good thing," Yang said calmly. "Sure, it'll limit our ability to use leverage, but it also means the market will be more stable. In the long run, it benefits us."
Hong Kong was the birthplace of the presale model, yet it had remarkably few "unfinished building" disasters even up to the new millennium.
One reason was that property prices rose so fast that even troubled projects often got completed just to capture profits.
The other reason was that the British colonial government responded quickly to early failures, putting in legal protections to prevent financial risks and social unrest.
A certain mainland apprentice of Hong Kong's system failed to learn that lesson—leading to one infamous surname racking up billions in debt.
Zheng smiled. "Got it. I'll go ahead with presales now, while we can still recoup cash before the new rules kick in."
"Good." Yang asked, "What about land prices in Kwun Tong? Are they dropping too?"
"No, it's a different story there," Zheng replied. "Probably because of the Ten-Thousand-Person Industrial Park.
Even though the economic impact hasn't fully materialized, developers are already speculating on the potential.
Prices near the factory are still rising, and some people are already making money building facilities for factory workers."
Yang nodded. "Alright. Don't worry about short-term fluctuations in the market. Same approach as before.
In fact, since land is a bit cheaper now, take advantage—keep buying more."
"No problem," Zheng said, then added, "One more thing, Mr. Yang. Even though Jili Building is almost finished, at the current pace of our expansion, we'll probably outgrow it in a year or two.
I've already secured another plot nearby. I'd like to propose constructing another office tower."
"Alright," Yang Wendong agreed easily. "Even if we don't use the new building ourselves, we can always rent it out."
The real hurdle would be 1966, but even then, land in Central couldn't simply be bought in bulk. Anyone who wanted to acquire property or land in the area had to play the long game, operating over many years and waiting patiently for opportunities.
Of course, one could also take a shortcut by acquiring companies that owned Central properties. But the majority of those companies were either major British conglomerates or newly risen Chinese tycoons. Waiting for the right moment to strike would take time.
"Got it. I'll bring you the plans once the architects finish them," Zheng Zhijie said with a smile.
Yang nodded, then added, "Old Zheng, I've got another task for you. I want you to investigate all the assets under Liu Baoshan's name.
His property company isn't publicly listed and is funded directly through his own bank. Apart from the well-known office buildings in Central, I want to know what else he's got."
According to historical records, the run on Liu Chong Hing Bank began in mid-June. But with Yang's interference, he wasn't sure whether that timeline would shift. It might get delayed—but more than likely, it would still happen.
That's because the way Liu Baoshan ran his business was essentially a ticking time bomb. If there was even the slightest problem in the property market, the whole thing would collapse. And now, the property market was indeed starting to wobble.
For ordinary developers, a market hiccup might just mean slimmer profits. But for a company running at high leverage like Liu's, it could be fatal. They had never stopped borrowing.
"Understood," Zheng replied. He didn't know why Yang wanted the intel, but that wasn't his concern—his job was to get it done.
June 12.
Zheng returned with a thick folder. "Mr. Yang, this is what I've found over the past week. These are Liu Baoshan's main assets."
"Let me see," Yang said, putting aside his other work and opening the folder. After flipping through it, he said with some admiration, "That's a lot of properties. Must be five or six million square feet in total?"
"Just about," Zheng nodded. "And this is only what I could dig up from semi-public sources.
Liu once boasted that his assets exceeded HK$100 million. That's probably an exaggeration, but he likely has at least several tens of millions.
What we don't know is how much debt he owes to his own bank. That's a closely guarded secret. Supposedly, even inside Liu Chong Hing Bank, only a handful of people know."
"Sounds about right," Yang nodded again. "Liu Chong Hing probably has deposits of HK$200–300 million. Among Chinese banks, it ranks just below Hang Seng and Bank of East Asia."
"Yes," Zheng agreed. "And Liu Baoshan is quite brilliant in his own way. While other banks were courting the wealthy or high-level professionals, he focused on gathering capital from the working class.
In just a decade, he turned Liu Chong Hing into one of the top Chinese banks in Hong Kong."
Yang acknowledged, "No doubt—he outmaneuvered other banks with that strategy. But he got greedy.
If he'd stuck to traditional banking, everything would've been fine. But instead, he funneled huge sums into property development. That's like walking a tightrope on the edge of a cliff. One misstep, and it's all over."
Even Yang, with knowledge of future market trends, wouldn't dare use bank funds to speculate in real estate. Markets go up and down—even if you're sure of long-term growth, a short-term downturn can ruin you.
Ordinary developers could survive losses. But for banks, a liquidity crisis could mean collapse. It was their structural vulnerability.
Zheng asked cautiously, "Mr. Yang, are you suggesting that the current rumors about Liu Chong Hing could lead to real trouble?"
"Very likely," Yang said with a calm smile. "Even if it doesn't happen this time, the way Liu operates simply isn't sustainable."
In April and May, Hong Kong's property market had clearly slowed. After two years of rapid growth, buyers were hesitating, waiting to see what would happen next. Some developments were failing to sell.
When you're highly leveraged, one slow-selling project can break your cash flow—and drag down the rest of your business in a domino effect.
Several of Liu Baoshan's ongoing developments were facing exactly that. Rumors were already swirling.
"If his property ventures fall apart, it'll affect the bank too," Zheng said with a frown.
"Exactly. That's why I told you months ago to pull our deposits out of Liu Chong Hing," Yang said.
Changxing Group still had multiple loans from Liu Chong Hing—but all its deposits had been withdrawn earlier in the year.
Back then, Liu Liewen had even approached Yang, asking if Changxing would keep some of its funds with the bank. Yang had politely declined.
Zheng now understood his boss's intentions more clearly. "So what should we do?"
"Nothing," Yang said, shaking his head. "Just wait."
He didn't need to interfere in something that history would take care of on its own. Besides, Liu Chong Hing had helped him in the past, and he still considered Liu Liewen a semi-friend.
If there were a way to rescue the bank without losing money, Yang would do it.
Unfortunately, the hole was just too deep. When a bank gets hit with a run, even HK$30–40 million in emergency cash wouldn't be enough. Only the government or a bank with high credibility—like HSBC or Standard Chartered—could help.
"Understood," Zheng said with a nod.
June 15.
Rumors about Liu Chong Hing Bank were spreading like wildfire—getting more extreme by the day.
The Liu family issued multiple public statements denying everything, but it was no use. More and more people began lining up to withdraw their savings.
June 17.
Several newspapers published exposés on Liu Baoshan's real estate losses.
By that afternoon, huge crowds had gathered outside Liu Chong Hing Bank branches, forming long queues that stretched into the street.
The first bank run in Hong Kong's history had officially begun.
(End of Chapter)
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