A century-old wealthy family that rose from Shanghai

In October 1964, the air in Hong Kong after a typhoon passed was salty and humid.

In the conference room on the top floor of HSBC headquarters, the crystal chandelier was dimmed to its lowest setting, and twelve wall lamps cast dappled shadows on the dark wood paneling, much like the somber thoughts of the British bankers at that moment. The gilded grandfather clock at the end of the long table ticked, each chime like a blow to taut nerves.

Standard Chartered Bank taipan McCarry stubbed out his cigar in a sterling silver ashtray, his amber eyes fixed on the map of Hong Kong banks in the center of the long table.

Ping An Bank's red logo has spread like wildfire across the dense network of branches in Central. In ten years, it has expanded from the initial five branches to twenty-eight. Even HSBC's most proud Queen's Road Central branch now has a daily call volume that is comparable to that of its neighbor, Ping An Bank.

He tapped his knuckles on the table, his leather shoes making a soft creaking sound on the carpet.

“Last month’s savings rate report,” McGarry pushed over a gold-embossed document, the edges of which were creased with obvious wrinkles, “Many Chinese-owned banks offer new customers a three-month fixed deposit rate of 5% or even higher, while we, in accordance with the Bankers Association’s agreement, can only offer 3.8%. These Chinese have no idea what financial order is.”

HSBC taipan Sanders tapped his fingertips lightly on the table, the rhythm creating an eerie resonance with the antique clock on the wall. The coffee in front of him had long since gone cold, and a lipstick mark remained on the rim of the porcelain cup—a rare moment of unease in his thirty-year banking career.

A top-secret report was locked in a drawer under the table: Many of Ping An Bank's corporate loans in recent years had flowed into promising industries and companies related to the Chen family. The non-performing loan rate for these loans was only 0.3%, far lower than HSBC's 1.1%. His fingertips traced the cool handle of the glass, and as his gaze swept over the words "Ping An Bank" on the document, his brow furrowed almost imperceptibly.

“Back in 1961, during the run on Liu Chong Hing Bank,” the CFO of Standard Chartered Bank suddenly spoke, his voice like it had been sanded, “we spent HK$2000 to have three dockworkers fabricate rumors in a tea restaurant that ‘Liu Baoshan was arrested for selling flour’ and ‘Liu Baoshan has fled abroad.’” He twirled the Freemason ring on his ring finger, the metal gleaming on the documents. “Even now in Causeway Bay, there are still plenty of taxi drivers waiting to earn some extra money.”

As Sandas looked up, the glow of the wall lamp fell precisely on his relaxed eyelids, casting a shadow. "I need a list," his voice was as steady as the frozen Victoria Harbour, "all the small and medium-sized Chinese-owned factories that have done business with Ping An Bank, especially those textile factories that have mortgaged their factory buildings to Ping An." The pen twirled half a circle between his fingers before landing steadily on the notebook.

McCarry suddenly laughed, pulling a stack of photos from his briefcase and pushing them onto the table. The top photo showed Ping An Bank General Manager Ye Ximing exchanging wine glasses with Hang Seng Bank Chairman He Shanheng at a charity gala, the neon billboard of Cheung Kong Holdings standing out starkly in the background. "These photos were taken last week," he said.

“My people found out that Ping An Bank gave Global Shipping a lot of loans, and even the collateral valuation was done by a company under the Chen family.”

“This is not in compliance with regulations.” HSBC’s legal director immediately stated, his pen scratching across the notebook with a harsh sound, the ink spreading into small blobs on the paper.

“Compliance?” McGarry scoffed, rising to walk to the floor-to-ceiling window. “When a run happens, nobody cares about compliance; they’ll only remember which bank you can withdraw money from.” His knuckles tapped on the cold glass, reflecting the sinister smile on his lips.

A senior executive leaned forward, a gold watch chain peeking out from his cuff flashing: "If we can cause a run on Ping An Bank, that would be a real victory."

Sanders shook his head and said, "Ping An Bank is backed by companies like Cheung Kong Holdings, Cheung Kong Industrial, Universal Group, and Times Pictures, forming a conglomerate. A run on Ping An Bank would be no less significant than a run on a British-owned bank." He downed his cold coffee in one gulp, the bitterness spreading from his tongue to his throat. His gaze swept over the suddenly tense expressions of the crowd, and he added, "The combined strength of the Chen Group far surpasses that of HSBC, and Chen Guangliang is considered a leader among the Hong Kong Chinese community."

Everyone felt a chill; this assessment was indeed high. McGarry smiled and said, "Not necessarily. If other Chinese-owned banks experience a run, Ping An Bank might not be immune. I've heard that Ping An Bank, relying on the Chen family's power, has consistently maintained a loan-to-deposit ratio of 60%. Even if a run doesn't severely damage Ping An Bank, its reputation will certainly be affected." He took out his pocket watch and glanced at the time; the patterns on the metal case shimmered under the light.

Sanders finally picked up his coffee cup, the cool porcelain resting on his palm. Back in 1948, when he was an assistant manager at the HSBC branch on the Bund in Shanghai, he had witnessed too many banks collapse during runs. The images of crowds rushing to withdraw their money, like a tidal wave washing over the marble steps, still haunted his midnight dreams. “We can’t target Ping An directly,” he said, setting down his cup. The soft clinking of the bottom against the table silenced everyone. “Let’s start with the smaller Mingde Bank. They’ve been using depositors’ money to invest heavily in real estate over the past three years; it would be easy to ignite a conflict.”

A sly glint flashed in McGarry's eyes as he said, "Alright, then we at Standard Chartered Bank will arrange it!"

The rise of Chinese-owned banks had the greatest impact on Standard Chartered Bank, while HSBC had already established a good reputation and network of relationships among the Chinese people as early as the Republic of China era.

As the meeting room door closed behind McCalli, Sanders opened an old file from 1961. Next to the headline "Liu Chong Hing Bank Run" on the yellowed newspaper clippings was his comment: "Panic spreads more easily than plague." He picked up a pen, drew a small question mark next to the name of Ping An Bank, and then locked the file back in the drawer—where a more secretive list was hidden, listing fifteen Scotland Yard graduates working in the Hong Kong Police Force whose retirement accounts were "specially managed" by HSBC.

This conspiracy, like an invisible net, has quietly enveloped Hong Kong's Chinese-owned banks, and a financial war without gunpowder is about to unfold in Hong Kong's financial market.

In the conference room of Ping An Bank's headquarters, the long teak table gleamed with a calm luster. Chen Guangliang sat in the main seat, his fingertips lightly tapping the tabletop, his gaze sweeping over the senior executives present.

The shimmering Victoria Harbour outside the window couldn't reflect the deep gravity in his eyes—the hard times for Hong Kong's economy were coming, first with bank runs, and then with 1967.

"Manager Ye, Manager Xia," Chen Guangliang's voice broke the silence, his gaze falling on the two veterans with graying temples, "Tell me about the latest loan-to-deposit ratio."

Ye Ximing adjusted his glasses and opened the leather ledger in front of him: "Since last year, we have been following your request to lower the loan-to-deposit ratio and gradually recover some loans to factories and real estate companies; this year, we have been even more strictly controlling loans. Under these circumstances, our current loan-to-deposit ratio has been reduced to 45%, which is quite reasonable." He paused and added, "It's three percentage points lower than HSBC."

Xia Gaoxiang nodded, his fingers lightly moving across the abacus, the crisp sound of the beads colliding conveying a sense of relief: "The three textile factory loans recovered last month have just filled the working capital gap of the Kowloon City branch."

Chen Guangliang looked at Zheng Hongsheng sitting on his right. This new senior executive, who was about to take over as general manager, was taking notes with his head down, his pen drawing smooth arcs on the paper. His suit was impeccably pressed, but he was also over forty years old, had studied abroad, and was from Guangdong.

Chen Guangliang's eldest son, Chen Wensheng, graduated a few months ago and is now working as an ordinary employee at Chase Bank to learn about Western banking management practices.

"What percentage of Ping An Bank's deposits belong to the Chen family's enterprises and related entities?" Chen Guangliang suddenly asked.

Ye Ximing flipped to another report, his fingertip pointing to the number "25%": "Chen's related companies account for about 25%. So, we should be very healthy." When he looked up, a smile appeared in the wrinkles at the corners of his eyes. "Last month, Cheung Kong Holdings just deposited the rental income from Cheung Kong Plaza into the account regularly."

Zheng Hongsheng suddenly spoke, his voice clear and resonant: "Chairman, let me add some data. Ping An Bank currently has 12.2 billion in deposits, ranking first among Hong Kong's Chinese-owned banks. The second-ranked Hang Seng Bank only has around 600 million in deposits, and Bank of East Asia is about the same. However, our loan-to-deposit ratio is only 45%, far lower than other Chinese-owned banks. We have prepared sufficient cash flow for restructuring, taking precautions against any eventuality." By this point, everyone knew what the boss was worried about. They were used to his proactive approach, which always managed to avoid disaster and even allow them to develop their businesses.

At this point, Chen Guangliang said, "Starting in 1962, I noticed a large influx of bank funds into Hong Kong's real estate industry, and much of it wasn't through loans, but through direct investment. Companies like Ming Tak Bank and Hang Seng Bank are major real estate companies in Hong Kong. So I felt this was a hidden danger. There's another set of data: in 1962, Hong Kong supplied 12000 new residential units, but this year it might rise to over 26000. Everyone wanted to rush to build their own sites before the new building regulations came into effect in January 1966. This led to a large influx of privately owned land into Hong Kong's real estate market."

Everyone nodded in agreement; this was indeed a potential problem.

Don't the heads of the other banks know this?
They knew to some extent that such things wouldn't happen to them, but since it hadn't struck them personally, there was always a sense of侥幸 (a feeling of being lucky). Besides, investing in real estate is far more profitable than lending money; the profits are incredibly tempting!

Du Weifan, Chen Guangliang's brother-in-law and an advisor to Ping An Bank, said, "We can continue to optimize some loans, assess the risk of each loan, and recover high-risk loans as soon as possible; we will also conduct rigorous assessments of new loans."

“That’s feasible. You two discuss it carefully and come up with a specific plan for me.”

"Ok"

Later, Chen Guangliang held a secret meeting with Zhang Shounian, the general manager of Ping An Investment Bank, and other senior executives.

"Sell all the Hong Kong stocks we've invested in, over the next four months. Also, sell off any trust properties we can."

Upon hearing this, Zhang Shounian and the others immediately sensed that something terrible was about to happen, and that Hong Kong was likely to suffer some kind of turmoil again.

"The properties under our trusts are mostly newly built industrial buildings. Apart from some being rented to sister companies, most of them are rented out to factory owners by floor and unit. If we were to sell them, selling them by floor and unit would be the fastest way to proceed."

Chen Guangliang nodded and said, "You can make the arrangements!"

In early November, Hong Kong was bathed in sunshine, and the entrance to the Hung Hom Tunnel was already bustling with people.

Before the morning mist had even dissipated, the area outside the cordon was already crowded with eager citizens. Children held up colorful balloons and weaved through the crowd, while vendors pushed carts and hawked fish balls and waffles. The sound of gongs and Cantonese nursery rhymes intertwined to create a noisy morning symphony.

"The road is open!"

As Governor David Trench cut the ribbon with his golden scissors, a deafening cheer erupted from the crowd.

In the first Rolls-Royce to drive through the tunnel, Chen Guangliang was waving through the car window, while Yan Renmei in the back seat was gently adjusting his tie, the pearl hair clip at his temple gleaming warmly in the sunlight.

CK Asset Holdings Executive Director Chan Man-kit stood by the platform not far away, a white rose tucked into the pocket of his sharp suit. He watched his father walk side by side with the Governor of Hong Kong, then disappeared into the crowd.

The Chen family is incredibly large, and these second-generation members must hide themselves well so that people will truly fear them and dare not act rashly.

Chen Wenjie rarely accepts interviews from reporters, positioning himself as 'his father's shadow'.

"Congratulations, Mr. Chan," Hang Seng Bank Chairman Ho Sin-hang quietly approached, his gaze sweeping over the gilded plaque of "Cheung Kong Holdings" on the stage. "Just those 40 years of fee collection rights alone are enough to make Hong Kong bankers envious for half their lives." The diamond cufflinks on his sleeve jingled, his envy barely concealed in his tone.

Chen Wenjie nodded slightly, his gaze sweeping over the workers in the crowd holding up signs that read "Long Live Cheung Kong." Most of them were construction workers from Cheung Kong Property Holdings, and they were shouting the slogan at the top of their lungs, their faces flushed. He suddenly remembered his father's words from last week: "Infrastructure construction is not a business; it's a monument for future generations to remember you. Once the Hung Hom Tunnel has recouped its costs, the family will consider donating it to the Hong Kong government."

Only Chen Wenjie knew that his father's words reflected his true feelings; his father had racked his brains for Hong Kong. This project involved an investment of 2.5 million, with Cheung Kong Holdings holding 80% of the shares. Such a massive investment put a strain on Cheung Kong Holdings' finances, saddled them with enormous debt.

But this was for the development of Hong Kong, and my father supported it without hesitation, often going to the tunnel to check on the progress of the project.

pity.

Others may not understand these things; they may just think that the Chen family is making money and increasing their family's influence.

"No more waiting for the ferry!" a dark-skinned man shouted, patting his companion on the back with his rough hands. "My wife works in Causeway Bay, so I can sleep an extra half hour every day!"

As the sun began to set, the traffic at the tunnel entrance continued unabated.

Chen Guangliang stood on the observation deck, watching the car headlights form a flowing river of light within the tunnel. Mixed with the faint honking of horns from within the tunnel, it became the most moving background sound. (End of Chapter)