A century-old wealthy family that rose from Shanghai

Soon after, Tao Yun, the head of Midea Electric Appliances, visited Fairchild Semiconductor in the United States.

He visited as a 'customer with needs' because Hong Kong's radio industry has seen a surge in exports in recent years, with the United States being the main market. Therefore, Tao Yun's visit prompted Noyce to personally receive him.

After some investigation, Tao Yun inquired about the price of transistors, but frowned upon hearing Noyce's quote.

"At this price, it doesn't have much of an advantage compared to Japanese transistors."

Noyce said awkwardly, "Although the price is slightly higher, the United States invented the transistor, and the product quality and performance are superior."

If transistors could penetrate the Hong Kong market, that would be a good thing, given the rapid growth in Hong Kong's radio exports.

Tao Yun naturally didn't believe Noyce's nonsense. He smiled and said, "Mr. Noyce, I know about Fairchild's situation. Fairchild is facing the serious problem of rising production costs and narrow sales channels. Although the transistor was invented in the United States, the Japanese have taken 70% of the profits."

Upon hearing this, Neus was speechless; this Hong Konger actually knew the market so well.

He could only say, "Since Hong Kong can import transistors from Japan, why did Mr. Tao choose to investigate the transistor industry in the United States? Could it be that Japan is already dissatisfied with Hong Kong's radio production, and you are worried that you won't be able to get supplies from Japan?"

Have a vision!
Tao Yun was not surprised. He said, "That's right, there are such concerns. That's why I represented Hong Kong's electronics industry and visited the UK and the US to make preparations."

Noyce laughed and said, "It seems that you are having a harder time, after all, Hong Kong is just a concentration of primary industries and is subject to many restrictions."

Tao Yun did not refute, but said, "Therefore, the reason we came to Fairchild this time is to offer Fairchild a solution, which is to open a transistor factory in Hong Kong. Our hourly wage in Hong Kong is about 20 cents, less than one-tenth of the hourly wage of American workers. And the efficiency of our Hong Kong workers is at least twice that of the Americans. If Fairchild can open a transistor factory in Hong Kong, it can not only solve your problem of high production costs, but also solve our problem of importing transistors. Moreover, some of the products can be shipped back to the United States, and some can be sold in Asia, which is very convenient."

Noyce was shocked and couldn't help but say, "Is that really the case in Hong Kong? The workers are twice as efficient as those in the United States? And the hourly wage is only 20 cents?"

“Absolutely true”

Suddenly, Noyce seemed to have a flash of inspiration, and the solution to the company's predicament was immediately found.

He then became polite to Tao Yun and took her to inspect Fairy Child's production workshop.

The two parties even cooperated directly, with Midea finding a factory site in Hong Kong for Fairchild, and Fairchild then preparing to set up a production line. Once Fairchild's factory in Hong Kong was in operation, Midea could obtain cheap goods from that factory.

Win-win!

Fairchild's actual investment is not large. It only needs to send a few American managers and recruit a few thousand workers in Hong Kong to carry out three-shift production, which can produce hundreds of millions of transistors per year.

Given Cheung Kong Industrial Group's position in Hong Kong, Fairchild also invited Midea Electric Appliances to serve as a 'factory opening consultant,' paying a consultant fee to expedite the establishment of a factory in Hong Kong.

Of course, Hong Kong, which sells itself on cheap and abundant labor, would not take on complex front-end processes. The main production process is that Fairchild manufactures wafers in the United States, then ships them to Hong Kong for packaging and testing. Finally, some chips are shipped back to the United States, while the rest are sold directly in Asia.

at the same time.

Akio Morita of Sony visited Japan's Ministry of Industry and Trade again to lobby Japan to restrict transistor exports to Hong Kong.

"Minister, the growth rate of radio exports from Hong Kong is far too fast, which is having a significant impact on our Japanese radio industry. I suggest that we impose export restrictions on transistors to Hong Kong as soon as possible to protect our domestic radio industry."

The Japanese government goes to great lengths to support its domestic industries, even resorting to deception and trickery to obtain patents from its American masters.

However, during this period, the US government did intend to support Japan in order to contain the Soviet Union and China in the Far East, so it would not impose sanctions in this regard.

After a moment's thought, the Japanese Minister of Economy, Trade and Industry said, "As far as I know, Sony has a factory in Hong Kong!"

Akio Morita immediately said, “We opened a factory in Hong Kong mainly to avoid the Commonwealth’s restrictions on Japanese electronics products, but we already have a factory in Ireland, so the Hong Kong factory has become obsolete and we are preparing to withdraw immediately. However, Hong Kong’s radio industry has a huge impact on the Great Japanese Empire. They import cheap transistors from Japan, assemble them under their own brands, and export them to the United States and the United Kingdom. Moreover, they have many advantages, such as a developed plastics industry that can produce radio casings; using leather to make radio covers is also a clear advantage of Hong Kong. If Hong Kong is not restricted, our Japanese radio industry will suffer a huge impact.”

Ultimately, apart from the transistors in radios being imported, Hong Kong manufactures all other components itself; the overall cost is even lower than that of Japan, making it very competitive.

In 1960, Hong Kong's radio exports had already exceeded one million units, and this year the growth trend is even more obvious.

"Okay, our industry department will discuss it later!" "Please."

Akio Morita took this issue very seriously because Sony had achieved global commercial success in 1957 with the development of its first all-transistor pocket radio, which was extremely small in size. This changed the situation from "one radio per family" to "one radio per person" in personal consumer electronics.

However, in 1957, Midea Electric Appliances produced transistor radios, which also began to lead the development of Hong Kong's radio industry.

Some people in society often say things like, "How can banks not have money? All the money in society is gathered in banks."

Bank employees often retort with something like, "That money isn't ours!"

How would Liao Baoshan answer?
He obviously wouldn't say, "The depositors' money is mine," but his actual behavior suggests otherwise.

Do not assume that Liao Baoshan intended to seize the money for himself; he merely misappropriated it. He maintained his integrity and ensured that depositors could freely withdraw funds; he never defaulted on any withdrawals.

Commercial banks all need to divert deposits to make money from money—lend to others, and then recover the principal and interest.

Liao Baoshan's embezzlement was a direct investment—he embezzled funds for his own use. While other banks made indirect investments, he made direct investments—loaning money to himself and speculating on real estate.

Liao Baoshan's rise to wealth was inseparable from speculation; in the years following the war, he speculated in real estate and gold, thus becoming extremely rich. The term "speculation" often carries a negative connotation in mainland China, but in Hong Kong it is a neutral term, neither praising nor criticizing; anything that is not prohibited by law can be done without restraint.

Bankers are known for their prudence and conservatism.

Liao Baoshan, already a banker, had tasted the sweetness of speculation, and his initial intention to work in banking remained unchanged. People always judge heroes by success or failure; if they fail, they say he was too adventurous; if they succeed, they praise his pioneering spirit.

In June, rumors suddenly spread among the public that Liao Baoshan had sold drugs and would be deported. Some newspapers also published these rumors.

Wednesday, September 6th.

Early in the morning, a group of "nervous" depositors rushed to Liao Chuangxing Bank, hastily withdrawing money and emptying their accounts.

Liao Baoshan was stunned upon hearing this, as if she had been ripped apart and bled.

Such an extravagant proposal will ruin the plan to build a 24-story building.

Liao Baoshan sent representatives to various branches to explain that the bank was well-managed and had abundant funds, in order to reassure depositors.

Since he had ample funds, he decided to withdraw them—another group of depositors rushed to Liao Chuangxing in a hurry and panic to withdraw their money.

The loss of HK$300 million in depositors' funds on the first day is not a large amount.

This was a huge blow to Liao Baoshan; he didn't sleep all night, his tears falling onto his pillow.

That night, rumors spread like wildfire throughout Hong Kong and Kowloon, claiming that Liao Baoshan had embezzled depositors' funds to speculate on land and property, making a fortune; that Liao Baoshan had already emptied depositors' accounts and had no money to pay them back, and that he had simply accepted his bad luck; and that Liao Baoshan, knowing a run on deposits was imminent, had already absconded overseas with all the funds.

Therefore, the real squeeze occurred on the second day.

Before the Liu Chuang Hing branches in Central, Des Voeux Road West, Wan Chai, Hennessy Road, Kowloon, Nathan Road, Mong Kok, Prince Edward Road, and Sham Shui Po even opened, they were already bustling with people, and long queues of people waiting to withdraw money stretched across the streets.

The bank staff were terrified by the scene and proceeded with deposit and withdrawal services as usual—but there was no one depositing money anymore.

Liao Chuangxing's armored truck shuttled between branches, and the cashiers sped up their counting, but they couldn't keep up with the endless stream of people rushing to withdraw their money.

Ordinary people were filled with panic and anxiety, fearing they wouldn't be able to withdraw their money, and that years of hard-earned savings would vanish in an instant. Some wept and stamped their feet, cursing Liao Baoshan for cheating them, while others slept on the streets, waiting to withdraw their money the next morning.

According to statistics on the accounts cancelled by various branches, there was a run on depositors within 3 days, with as many as 2 depositors withdrawing their funds and a total loss of HK$3000 million in deposits.

Of the HK$3000 million, part was Liao Chuangxing's working capital, and part was a small loan from fellow Chaoshan natives—a drop in the ocean. The majority was borrowed by Liao Baoshan using his property as collateral at a reduced cost. Liao Baoshan faced only two paths: declare bankruptcy and accept liquidation, or cut his losses to salvage the business and try to make a comeback someday.

Liao Baoshan sought help from other banks, but they either declined for various reasons or delayed by saying that the matter would be referred to the board of directors for consideration.

"You just stood by and watched me die!" Liao Baoshan roared angrily and desperately, then buried her face in her hands and wept. The business world is like a battlefield; it's either you die or I live.

Those in the same industry may be friends, but they are more likely to be enemies.

Chen Guangliang once famously said, "We will not fund competitors who harm our interests."

Before and after Chen Guangliang, Ping An Bank was not the only banker holding this view.

When Liao Chuangxing suffered the consequences, other banks watched from the sidelines, some even gloating, saying that Liao had brought it upon himself.

They are indeed somewhat ruthless, but this is not without reason.

The Hong Kong government does not have a comprehensive banking law, nor does it set official interest rates. However, the Hong Kong Association of Banks has set interbank interest rates, requiring all member banks to comply to avoid vicious competition.

Liao Chuangxing simply copied the practices of traditional banks into the banking industry, disregarding the regulations of the trade association, and established "high-interest small deposits".

Banks, led by HSBC, Standard Chartered, and Ping An, were very dissatisfied with Liao Chuangxing, but were helpless to do anything about it.

Now that Liao Chuangxing is facing a bank run, it's inevitable that other banks will stand idly by.

Three days after the bank run, the police commissioner issued a statement addressing rumors that Liao Baoshan had absconded:
"A rumor has been circulating that a well-known banker is under police investigation and has been notified to leave the country. This rumor has been verified to be completely unfounded."

This statement has played a role in mitigating congestion.

Liao Baoshan's continued presence in Hong Kong proves that he is still capable of handling the situation.

However, many small depositors are still not at ease and will not give up until they have withdrawn their deposits into their pockets.

HSBC and Standard Chartered are standing members of the Hong Kong Association of Banks and are also large commercial banks with the rights and obligations of quasi-central banks. The two banks issued a joint statement supporting Liu Chong Hing Bank, claiming that it could provide overdrafts of 3000 million to cope with a bank run.

As the rush to withdraw funds gradually subsided, Liao Chuangxing, who was on the verge of collapse, was spared from being forced to resign.

Liao Baoshan, who was on the verge of tears but had no tears left, should have broken into a smile and regained his former glory—no, he was more like a frightened bird, living in constant fear.

The incident stemmed from HSBC's well-intentioned assistance. HSBC and Liu Chong Hing drafted a joint English statement: "HSBC and Standard Chartered have made certain arrangements to bring the Liu Chong Hing Bank incident completely under control."

The statement was published in a Chinese-language newspaper, and thanks to some clever translation, the Chinese translation read: "The business of Liu Chong Hing Bank is completely under the control of HSBC and Standard Chartered."

The translation is completely unrelated to the original.

When Liao Baoshan saw the newspaper, she was struck dumb and suffered a mental breakdown—HSBC and Standard Chartered were too despicable and shameless, going back on their word and using "unconditional support" as bait to lure her into a trap so they could swallow up the bank and property she had worked so hard to build.

Liao Baoshan was in a daze and couldn't sleep. She even called her lawyer in the middle of the night to get to the bottom of things.

The lawyer explained that it was simply a translation error and could not be trusted, but Liao Baoshan still harbored doubts, fearing that the foreigners might be trying to scam her.

Ping An Bank.

Liao Baoshan dragged her tired body to Chen Guangliang's office.

“Sir Chan, HSBC and Standard Chartered are interested in acquiring Liu Chong Hing. They want to auction off my properties, which is tantamount to cutting off my flesh and forcing me to sell my children... You are a leader of our Chinese business community, please help me out. I often hear people say that you put forward the concept of 'Hong Kong people' and are a highly respected business tycoon in Hong Kong!”

Upon meeting, Liao Baoshan immediately played the "Chinese capital" emotional card.

Chen Guangliang said directly, "Mr. Liao, how do you plan for me to help?"

“There is a way, which is for you and me to sign a sales contract to sell all my properties to you. In this way, HSBC and Standard Chartered will not auction off my properties.” Liao Baoshan continued to explain: “Mr. Chen, don’t worry, this contract is only for HSBC and Standard Chartered to see. Once the storm has passed, you can terminate the contract.”

Chen Guangliang thought to himself that a contract must be genuine and legally binding. Moreover, Liao Baoshan owns a large number of properties, and the transaction amount involved is a huge sum, at least hundreds of millions of Hong Kong dollars.

Although hundreds of millions of Hong Kong dollars are easily within Chen Guangliang's means.

But don't forget, what if Liao Baoshan changes her mind and sells her properties to him for hundreds of millions? In that case, wouldn't Chen Guangliang suffer a significant loss because he overpaid for the properties?

Chen Guangliang, a seasoned businessman, naturally disagreed.

However, in the spirit of being fellow Chinese, he said, "Mr. Liao, this method is very disadvantageous to me, so please forgive me for agreeing."

Liao Baoshan was anxious. Before he came, his friends all said that the only person in Hong Kong who could save him was Chen Guangliang, a leader of Chinese-owned businesses; otherwise, he would be devoured.

“Sir Chan, you must help me. There is no one else in Hong Kong who can help me except you.”

The tone was humble, yet it elevated Chen Guangliang to the 'moral high ground'.

Chen Guangliang sighed and said, "Mr. Liao, think about it. Chen Detai managed to weather the storm when the real estate market was down a few years ago. Although his strength was greatly diminished afterward, he still survived. Now that the real estate market is so good, your situation isn't too bad. In any case, your property will be worth more than HK$100 million after the auction. HSBC and Standard Chartered can't take it from you."

Upon hearing this, Liao Baoshan, still preoccupied, said, "Not necessarily. If someone tries to undercut me during the property auction, I'll be in big trouble!"

This "eating cakes" tactic has become a method used by Hong Kong property developers in recent years, leaving even the Hong Kong government somewhat helpless.

Therefore, Liao Baoshan's concerns are not without reason!

Chen Guangliang said:
"We at Cheung Kong Holdings can help with this. As you know, Mr. Liao, we at Cheung Kong Holdings have never participated in any 'profiteering' schemes. On the other hand, I will have someone contact them. If HSBC and Standard Chartered really do auction off your land, we won't 'profiteer' them."

"Finally, I would like to offer Mr. Liao a piece of advice: given the current real estate market, the Liao family business will undoubtedly remain among the top property companies in Hong Kong. Why be so anxious? Your health is paramount! If you ruin your health, will your children be able to protect the family business? As long as you're healthy, you can always rebuild!"

He could tell that Liao Baoshan was in a daze and looked haggard, and that she probably didn't have long to live.

Although Chen Guangliang harbored some intention to weaken Liao Baoshan, he possessed a strong Confucian sense of decency when it came to matters of life.

Liao Baoshan was taken aback upon hearing this and said, "Thank you for your guidance, Mr. Chen."

Later, he regained some confidence and left.

He felt that today was a fruitful day:

First, with Cheung Kong Holdings participating in the auction, coupled with its industry influence, the price of the cakes shouldn't be too high.

Secondly, he felt that Sir Chan's words made some sense. After all, the Liao family was a large property company in Hong Kong, and there was hope for a comeback.

A few days later, Liao Baoshan had no choice but to auction off her properties to raise the money from HSBC and Standard Chartered.

Chen Guangliang kept his promise and arranged for Lu Xiaoqing, the head of Cheung Kong Property Holdings, to 'supervise' the auction.

Of course, there is a bottom line, which is to keep the value within 7% to 8% of the assets.

Hong Kong's real estate market remains booming, and the fact that Liao's properties have lost 20-30% serves as a lesson for Liao Baoshan.

Henry Fok was also present that day, and he was probably entrusted by Liao Baoshan not to participate in eating the pancakes.

Therefore, Liao Baoshan's loss from this auction was only around 20 million, which is not serious.

However, to her surprise, although the price obtained from the auction was not low, Liao Baoshan was still resentful and extremely sad and disappointed to see the property she once owned fall into the hands of others.

A few days later, his high blood pressure flared up, and he died of a cerebral hemorrhage a few days after being admitted to the hospital.

This news became the talk of the town. (End of Chapter)