A century-old wealthy family that rose from Shanghai

In mid-November, the Battle of Shanghai ended, which also meant the fall of Shanghai.

At the end of the month, Ye Ximing and Zhang Shounian from Ping An Bank came to Hong Kong to give a work report to Chen Guangliang.

Although Chen Guangliang had been receiving work reports from the Shanghai Municipal Government via telephone and telegram and had also issued instructions, it was clearly necessary for these senior officials to come to Hong Kong regularly to report on their work.

In the Ping An Bank Building office on Des Voeux Road, the two reported to Chen Guangliang.

"Since October, the concession area has been basically overcrowded. There are no more advertisements for property rentals, and the rents are extremely expensive. For example, the Shangri-La Hotel is almost always fully booked."

"After the Battle of Shanghai, a large number of factories began to relocate to the foreign concessions, and the prices of imported goods changed daily."

"Xinfeng Textile is also extremely busy. Currently, cotton is cheap, but cotton yarn and cotton fabric are expensive."

"Conservatively estimated, Xinfeng Textile's profit this year will be around 550 million (including 250 million from cotton yarn speculation), and next year's profit will be even more outstanding."

With one piece of 'good news' after another arriving, it's inevitable that Ping An Bank will make a fortune.

Chen Guangliang's expectation was that around 1940, the total assets of Ping An Bank and Xinfeng Textile would reach 3000 million yuan. Of course, this 3000 million yuan refers to the current value of the legal tender. (Currently, 1 legal tender is equal to 29 US cents, or 12 pence.)

The price needs to increase by about two times, which is more than 900 million US dollars, to justify Chen Guangliang's strategy.

Chen Guangliang said, "Although I am in Hong Kong, I know the future trend of the concessions. The number of factories will definitely increase exponentially next year, after all, the rate of return is high; not to mention real estate, it is a sure-fire good investment. Cotton is cheap, so it is not surprising that textile prices will double, machinery and equipment will double, and the same goes for supplies."

Ye Ximing said admiringly, "Your strategic thinking is superb; investing in Xinfeng Textile was an extremely wise decision."

At this moment, Zhang Shounian said, "Boss, there's one more thing everyone wants to ask you—should Ping An Bank's profits be transferred to Hong Kong?"

Chen Guangliang nodded and said, “This is a matter of being prepared for potential dangers even in times of peace, and it is very important. Given that Ping An Bank’s investment and development are very good, after you return to Shanghai this time, you should preside over Ping An Bank’s purchase of a large number of foreign-funded enterprise stocks from the Shanghai Stock Exchange, including Wheelock and Company, Wing On Textile Mill, International Trust Company (real estate), and British Hua Investment. We can use part of Ping An Bank’s profits next year to invest in advance to prevent devaluation, tentatively set at 300 million yuan.”

The foreign companies listed on the Hong Kong Stock Exchange issued shares in seven different currencies. Among these, the largest number of shares were issued in silver taels, totaling 58 types with a total value of over 106 million taels; followed by shares issued in legal tender, totaling 25 types with a total value of around 100 million yuan; then 16 shares issued in British pounds, totaling over 6.8 million pounds; and two shares issued in Hong Kong dollars, namely HSBC and Heung Shang Restaurant, totaling 29 million Hong Kong dollars.
Investing in these stocks is the best strategy to hedge against currency devaluation.

Moreover, Chen Guangliang knew that this wave of foreign stocks would peak in April or May of 1940, with some appreciating dozens of times, or at least several times.

Besides the fact that the fiat currency will depreciate significantly during this period, there are two other major reasons:
First, during the period when Shanghai was isolated, speculative activities became increasingly rampant.
Secondly, with the start of World War II in 1939, hundreds of millions of US dollars of overseas wealth flowed into Shanghai, and the foreign concessions became a safe haven.

Meanwhile, Jewish and Western businessmen took advantage of that peak to cash out large amounts of stock, embezzling hundreds of millions of Chinese wealth.

Since that's the case, Chen Guangliang thought—since it's going to benefit someone else anyway, might as well let him have it.

Ye Ximing said, "Isn't there some risk in investing in stocks at this time?"

Chen Guangliang laughed and said, "Go ahead and do it. I always buy at the bottom and I've never failed."

"Ok"

Then Chen Guangliang said, "At the beginning of next year (1938), Ping An Bank will exchange another 200 million yuan of legal tender for US dollars (about 60 yuan) and prepare to deposit it in Chase Bank in the United States."

"Okay, we'll get ready when we get back."

This year (1937), Xinfeng Textile has already distributed 300 million in dividends, and will distribute another 100 million at the end of the year, which is equivalent to Ping An Bank receiving 200 million in dividends.

In fact, Ping An Bank owns many 'profitable' assets, including real estate and textile equipment in Shanghai, as well as properties in Chongqing and investments in Hong Kong, all of which have appreciated significantly.

This wave of investment will not only bring in $900 million, but Ping An Bank itself will also see its assets soar to $900 million, not even counting the dividends that Xinfeng Textile gave to Chen Guangliang personally.

Moreover, Chen Guangliang has no intention of repaying the remaining loan of 450 million from Xinfeng Bank. The reason is too simple: the currency is going to depreciate, and Chen Guangliang can easily repay the debt in five years.

In essence, Ping An Bank and Chen Guangliang personally used depositors' funds to invest in various 'appreciating' assets; however, the depositors' funds were depreciating rapidly.

At the same time, Ping An Bank was to transform its 'own assets' into real estate in Hong Kong, as well as gold and US dollars, and deposit them in New York and London (with the majority in New York) before 1941.

On this day, Chan Kwong-leung arrived at the Gloucester Hotel in Central, which was the predecessor of the later Mandarin Oriental Hotel.

Today, this place has become a gathering place for powerful and wealthy people from Shanghai who come to Hong Kong for refuge. Chen Guangliang's arrival has even attracted the attention of some people.

Then, Chen Guangliang saw Du Yuesheng wearing a long gown and went to greet him.

"Mr. Du, it's been a long time. I never expected we'd meet in Hong Kong!"

Du Yuesheng immediately smiled and said, "I am seeking refuge in Hong Kong, but I heard that you have a very successful business here and are practically a local tycoon. So, after settling down a bit, I came to meet you."

Chen Guangliang quickly replied, "I should be the one visiting you; you are my elder!"

Du Weifan and Yan Renyun had not yet arrived in Hong Kong at this time.

Du Yuesheng immediately said, "Wei Fan and Ren Yun are already on their way. I told them to come and visit you as soon as they arrive in Shanghai."

You're too kind.

In fact, Yan Renmei had been in contact with Yan Renyun and urged her sister to come to Hong Kong as soon as possible. However, since Yan Renyun was married, the arrangements made by the Du family were the main considerations.

The two then sat down, surrounded by two bodyguards. Du Yuesheng always had two bodyguards with him, clearly skilled as well.

After sitting down, Chen Guangliang joked, "I heard that Shanghai is in complete chaos without Mr. Du, and the French Concession even smells terrible."

Du Yuesheng replied, "You read this in the newspaper, didn't you? But you're right, at least the Japanese don't dare to seek revenge against my family now."

The French Concession smelled terrible, that's true, and the reason is:

After Du Yuesheng left Shanghai, some petty thugs were no longer restrained, and robberies, thefts, and murders occurred frequently. Small gangs and factions constantly fought each other, disturbing the peace of the people of Shanghai. Even the disputes of a small gang made the residents of the French Concession want to flee Shanghai.

There were no septic tanks in the Shanghai concessions, so the residents' excrement had to be carried away by septic tank workers. Although this job was dirty, it was considered a good profession by the lower classes.

The night soil collectors could have two sources of income: one from the residents' cleaning fees, and the other from selling the night soil as fertilizer. As a result, many people at the bottom of society envied this profession and competed to become night soil collectors, which led to the formation of a gang. The most powerful person became the "Night Soil Brain," or the leader of the Night Soil Gang.

The gang leader, of course, had to both profit from it and maintain order. The "Dung Brain" in the French Concession was named Fan Kaitai. After his death, his wife Shi Jinxiu took over the Dung Gang and became the first female gangster in Shanghai. She was also highly regarded by Du Yuesheng, so her position was very stable.

But when Du left Shanghai, Jin Xiu suddenly passed away, and the position of leader of the dung gang passed to her son, Xiao Fan. However, Xiao Fan was a spoiled brat who had previously relied on Du Yuesheng for support, and no one dared to take his job. After Du left Shanghai, Xiao Fan couldn't manage things, and all the dung collectors rose up in rebellion. The dung gang quickly split into several small groups, fighting for the leadership position by force, and Xiao Fan was sidelined. The dung collectors fought each other for several days, and the residents of the concession complained bitterly. Without the dung collectors carrying dung, every household reeked of stench, and the French Consul General was furious.

Fortunately, Du Yuesheng issued orders in Hong Kong in time, and the dung gang returned to peace.

After chatting with Du Yuesheng for a while, he said, "Although you, Guangliang, are not in Shanghai this time, Ping An Bank purchased 200 million yuan of national salvation bonds and established an organization to help refugees. The people of Shanghai also know that although you are trapped in Hong Kong, you are also saving the country and the people. Your contribution is great."

Chen Guangliang said, "What credit is there to speak of? This is what a responsible company should do, and it's not worth praising."

Du Yuesheng was quite eloquent; Chen Guangliang had clearly fled beforehand, yet he was portrayed as 'trapped in Hong Kong'.

In fact, the citizens of Shanghai and the South China Sea government believed that Chen Guangliang happened to be in Hong Kong and was unable to return to Shanghai to preside over public welfare activities due to the war, but the support they gave him was still enormous.

No corporate group has ever purchased 200 million in national salvation bonds at once, as that is simply too large a sum.

To be honest, when Chen Guangliang made this decision, he knew it was basically a waste of money—he wouldn't be able to raise the money to repay the principal until 1941, but by then the legal tender had depreciated considerably.

But Chen Guangliang also considered that since it was depositors' money anyway, it didn't matter.

Chen Guangliang and Du Yuesheng's first meeting in Hong Kong did not involve any in-depth discussions, but they did exchange views on the current situation.

Du Yuesheng knew that Chen Guangliang was always very farsighted, so he asked, "Guangliang, do you think we will win this war?"

In fact, Du Yuesheng and others were very pessimistic; they just didn't want to be traitors.

Chen Guangliang said confidently, "We will definitely win. Japan's strategy is to destroy China, but its own resources are very scarce. So as long as we fight one battle after another, even if we lose more than we win, as long as we wear Japan down little by little and use space to buy time, Japan will eventually be unable to withstand the attrition. Moreover, if we lose on the main battlefield, we can fight guerrilla warfare. As long as we Chinese people do not surrender, this nation has hope."

In fact, it wasn't that the Japanese wanted to fight the Pacific War in the previous life; rather, it was China that dragged Japan into a situation where it had no choice but to fight the Pacific War, thus expanding its demand for essential resources like oil and rubber. If the Chinese government had already suffered a complete defeat in 1941, Japan would never have started the Pacific War first.

Upon hearing this, Du Yuesheng immediately said, "You always see things clearly and understand them perfectly!"

Although they may have lived decades longer than this young man, they will never have the same confidence as Chen Guangliang when discussing such matters.

"No, I simply believe that as the Chinese people's minds rise, this nation will not be defeated!"

"makes sense"

Although there were traitors, the determination to resist the Japanese invasion remained the mainstream.

The following day, Chen Guangliang listened to a work report from Li Hongsheng, the head of Ping An Bank, in his office at Ping An Bank Building.

“Since November, a significant amount of capital from the mainland has flowed into Hong Kong via Wuhan, Guangzhou, and Shanghai, resulting in a tenfold increase in Ping An Bank’s foreign exchange business. At the same time, Ping An Bank (Hong Kong)’s deposits have grown rapidly, reaching HK$12 million. Ping An Bank is ushering in a great opportunity for development.”

In recent years, Ping An Bank has been expanding its network nationwide and has established a 'remittance system'. Simply put, if you are in Wuhan and want to transfer funds, but the safety of the transfer cannot be guaranteed, then you can naturally choose the bank's remittance system, which is safe and secure.

As the number of wealthy mainlanders coming to Hong Kong increases, Ping An Bank's deposits naturally increase significantly as well.

Chen Guangliang said with satisfaction, "We have indeed seen great development. However, with the increase in deposits, what do you think we should do with our funds?"

Li Hongsheng immediately said, "First, this year we have invested over HK$200 million in building factories and residences; second, there are quite a few Shanghai entrepreneurs who are now building factories in Hong Kong, and we are prepared to provide them with some assistance."

Previously, Ping An Bank (Hong Kong) took advantage of the sluggish Hong Kong property market to purchase 50 square feet of industrial land (costing approximately HK$15 million) and 150 square feet of residential land, costing nearly HK$80.

These land parcels require huge construction costs, so Ping An Bank (Hong Kong) uses depositors' savings for investment.

Chen Guangliang said, "There is no problem in supporting Shanghai entrepreneurs to set up factories in Hong Kong, but the loan term should be controlled within three years and should not be too long."

"Okay, I see."

Ping An Bank has reaped considerable investment rewards in Hong Kong, owning a ten-story office building on Des Voeux Road, hundreds of thousands of square feet of industrial plants (some one-story, some two-story, but mainly one-story), and hundreds of thousands of square feet of rental housing (three- to five-story tenement buildings and villas), generating nearly one million Hong Kong dollars in rent annually.

"Mr. Chen, the people from Shanghai Tianchu Factory have arrived!"

Chen Guangliang stood up and said, "Please invite them in." He then said to Li Hongsheng, "It's perfect timing. Shanghai Tianchu Factory is interested in setting up a factory in Hong Kong. I'd like to invite them to inspect our factory and meet us."

"Ok"

Given Chen Guangliang's status in Shanghai's business community, factories from Shanghai would naturally seek cooperation with him when they came to invest in Hong Kong.

A short while later, Yu Bokang, the factory director of Tianchu Factory, and Dai Yi, the wife of Wu Yunchu, the founder of Tianchu Factory, walked in.

"Mr. Chen"

"Director Yu, Madam Wu, please have a seat."

Then, everyone sat down.

Dai Yi spoke first: "My husband heard that Mr. Chen had already set up factories in Hong Kong and Sichuan before the War of Resistance against Japan, producing sugar, alcohol, and textiles. He greatly admires him. He said that since he came to Shanghai to build a factory, he must come and visit you."

Chen Guangliang said with a smile, "Mr. Wu and I are old acquaintances. I heard that he intends to build factories in Hong Kong and Chongqing, so I am willing to give him some advice. By the way, your decision to build a factory in Hong Kong this time is very smart. There is a monosodium glutamate factory in Guangdong Province in Hong Kong, and its quality is completely incomparable to Tianchu. Moreover, Hong Kong is geographically more convenient for export. If your products are exported, they will definitely sell well overseas and supply the mainland."

Yu Bokang quickly replied, "It's wonderful to have Mr. Chen's affirmation. I heard that Ping An Bank has invested in several factories in Hong Kong and intends to lease them out?"

Upon hearing this, Chen Guangliang had someone bring out the factory information for Ping An Bank, saying, "This contains information on more than a dozen factories. Some are basically completed, while others are still under construction, but they will be finished soon. Although it's easy for Tianchu Factory to purchase land and build a new factory, it will still take at least a year. And nowadays, time is often the most important factor. We can lease the land to you, or you can choose to lease it while purchasing land and building your own factory. A year or so of construction time is more than enough for your products to recoup your investment."

Dai Yi nodded quickly and said, "Yes, that's what my husband said too. With Mr. Chen's help, the best course of action is to get to production as soon as possible."

Much of the equipment at Tianchu Factory was dismantled from Shanghai, so the biggest challenge right now is building the factory and starting production as soon as possible. To achieve this goal, Wu Yun-chu even sent his wife along, all in an effort to get production going as quickly as possible.

Subsequently, Chen Guangliang arranged for someone to take them to the site for inspection.

In the future, more Shanghai entrepreneurs will come to Hong Kong to build factories, and Ping An Bank can provide not only factory buildings but also loans.

At the same time, Chen Guangliang also cultivated relationships with a group of entrepreneurs in Shanghai, and they soon elected him as their leader.

Chen Guangliang even considered a problem: his early investment in factories in Hong Kong and Chongqing was already public knowledge in the business world. This meant that if he sold all his properties in Shanghai after 1945, he would become a trendsetter, and more Shanghai entrepreneurs would follow in his footsteps. (End of Chapter)