A century-old wealthy family that rose from Shanghai

Just after the New Year's bells rang in 1968, the sea breeze in Yokohama, Japan, still carried the warmth of the New Year, Chen Guangliang's "Yingmei" superyacht slowly sailed into the dock.

Unlike in the past, this time his accompanying team included not only senior executives from Global Shipping, but also two senior credit directors from the Development Bank of Japan and Sumitomo Bank—negotiations for a "super order" that is set to shake the global shipping industry are about to begin at several shipyards in Japan, and the core funding for this order comes from the strong support of Japanese domestic banks.

At this time, the international shipping industry was shrouded in anxiety over the closure of the Suez Canal. Since the canal's closure in June 1967, global crude oil shipping routes had been forced to detour around the Cape of Good Hope, extending the voyage by nearly 5000 nautical miles. Demand for oil tankers surged, and freight rates soared from $7 per ton to $30 per ton.

However, as some shipowners began to slow down shipbuilding in the second half of 1967 (most people predicted that the canal would be closed for a maximum of 1-2 years), the order schedule of Japanese shipyards changed from "fully booked" to "relaxed". Although giants such as Mitsubishi and Kawasaki still had production capacity, they rarely received large orders of more than two ships. As a result, the Bank of Japan was eager to find "high-quality lending targets" that could both develop the shipbuilding industry in the long term and obtain stable interest income.

On January 5th, in the conference room of Mitsubishi Heavy Industries' Yokohama shipyard, President Masao Watanabe looked at the order list in front of him, his fingers trembling slightly: 15 VLCC tankers of 227,000 tons, 10 very large crude carriers of 288,000 tons, and 5 container ships of 50,000 tons, with a total carrying capacity of more than 6 million tons, and a delivery period of three years—this is almost equivalent to Mitsubishi Heavy Industries' total tanker production capacity for the next four years. If they can secure some of these orders, not only will the shipyard be able to operate at full capacity, but it will also boost upstream companies such as Sumitomo Metal and Kobe Steel.

"Mr. Chen, are you sure you want to place such a large order?" Watanabe Masao couldn't help but confirm. "The shipping industry is currently taking a wait-and-see approach. Many ship owners believe that the canal may open to navigation at any time. Building ships on such a large scale is too risky."

Chen Guangliang sat on the sofa, his fingertips tracing the order details, his tone calm: "President Watanabe, risk and reward are always proportional. The Suez Canal has been closed for a year and a half, and there are no signs of easing in the standoff between Egypt and Israel. The canal will not be open for at least another three years, and during this period, the demand for tankers will only increase, not decrease. We have many ships for Japanese leasing, but there is a slight shortage for Europe and the United States, so only by continuing to build ships can we firmly grasp the crude oil transportation orders from Europe and the United States."

He then turned to Ichiro Sato, the credit director of the Development Bank of Japan, beside him: "In terms of funding, the Development Bank of Japan and Sumitomo Bank have jointly committed to providing a special loan of US$2.5 million at an interest rate 12% lower than the Bank of Japan's benchmark rate—this demonstrates our sincerity towards long-term partners. The down payment of 20% will be received within a week of signing the contract, and the remaining amount will be paid in installments according to the progress of ship delivery. I believe you understand our current profitability."

Ichiro Sato immediately added: "The reasons we are willing to provide low-interest loans are threefold: first, we recognize the strength of Global Shipping – in the past two years, your company's rental recovery rate has reached 100%, and there has never been a default; second, we are optimistic about the impact this order will have on the Japanese shipbuilding industry. The construction of 570 million tons of shipping capacity can create more than 2 jobs in Japan and also boost exports of industries such as steel and machinery; and third, Global Shipping has signed many orders this time, with a steady stream of profits as a guarantee."

Watanabe Masao breathed a sigh of relief.

Such conditions not only guaranteed the shipyard's profits (the construction cost of each ship could be reduced by 5% due to the decline in steel prices), but also avoided cross-border payment risks through loans from Japanese domestic banks, leaving almost no reason to refuse.

He immediately convened a meeting of management and made a decision half an hour later: "Mitsubishi Heavy Industries is willing to undertake the construction of five 227,000-ton VLCCs and five container ships. The construction of the 288,000-ton oil tankers is more difficult. We will work with Kawasaki Heavy Industries to complete two of them and ensure that they are delivered on schedule within three years."

In the following days, Chen Guangliang visited shipyards such as Kawasaki, Ishikawajima, and Harima without stopping. At each shipyard, representatives from the Bank of Japan would follow up on the loan details, completely dispelling the shipyards' concerns about "insufficient funds".

On January 10, Global Shipping, together with the Development Bank of Japan, Sumitomo Bank and others, officially announced a "6 million-ton super shipbuilding order", which immediately caused a stir in the international shipping industry.

The Wall Street Journal published a commentary titled "The Mad Chinese Shipping Magnate": "The period of profit from the closure of the Suez Canal has passed, and most ship owners have chosen to wait and see. However, Chen Guangliang, together with the Bank of Japan, has made a bold bet against the trend of 600 million tons of shipping capacity. If the canal opens to traffic within three years, both Global Shipping and the Bank of Japan will face huge losses."

A spokesperson for Greek shipping magnate Onassis went even further, saying, "This is an irrational gamble. There are already signs of overcapacity in global oil tankers. Adding another 600 million tons will only intensify market competition and drag down the entire industry."

At the headquarters of Hong Kong-based Worldwide Shipping, the executives were also somewhat worried.

a few days later.

Chen Guangliang hosted a banquet on the "Yingmei" to entertain senior executives of the Japanese shipyard and representatives of the bank.

As night fell and Yokohama Port shone brightly, he raised his glass: "Three years from now, these supertankers will be shuttling between the Persian Gulf and Europe and the Americas. They will not only be the engines of wealth in global shipping, but also a testament to the deep cooperation between the Japanese shipbuilding and banking industries and us. Let us seize the opportunity presented by the closure of the Suez Canal and create a new peak for the shipping industry!"

Masao Watanabe, Ichiro Sato, and others raised their glasses in response, the crisp sound of clinking glasses echoing intermittently in the sea breeze.

They knew that this high-stakes gamble not only concerned the future of Global Shipping, but would also reshape the international standing of Japan's shipbuilding and banking industries. Standing on the deck, gazing at the distant Japanese coastline, Chen Guangliang had already planned his next move—with the addition of 600 million tons of shipping capacity, Global Shipping would become the first shipping company to surpass 2000 million tons by 1971, truly achieving its goal of "dominating the seas," while Japan would solidify its position as the "global shipbuilding center" through this cooperation.

Later, Chen Guangliang returned to Hong Kong on his own airline, Hong Kong Airlines, just two weeks before the Lunar New Year.

Chen Guangliang has always believed that shipping is the simplest business for him. It's not that the business itself is simple, but rather that the most important thing in shipping is the cycle.

During every shipping downturn, countless large shipping companies go bankrupt. In the 1980s, Japanese shipping companies were frequently bankrupt, as was the case with South Korean shipping companies in 2016.
Chen Guangliang was able to grasp the shipping cycle of the next sixty years, which ensured that he knew when to reduce the number of ships and when to build new ones.

Of course, if he only knew about cycles, he wouldn't have achieved the scale of his shipping business today. Chen Guangliang entered the shipping industry in the 1930s, and he is extremely knowledgeable about ship technology, navigation technology, and so on. Every year, he would visit many shipyards to discuss shipbuilding technology, national shipbuilding standards, and so on.

To put it bluntly, if China were to reform and open up in the future and need to develop the shipping industry, hiring him or Universal Company as a "consultant" would be more useful than hiring a hundred engineers in China or ten senior shipbuilding engineers overseas.

The Japanese probably don't know that Chan Kwong-leung possesses a photographic memory and a brilliant mind; he often secretly learned their shipbuilding techniques. If Hong Kong's industrial chain weren't so inadequate, Chan Kwong-leung would have been interested in opening his own shipyard.

Every time Chen Guangliang went to the Japanese factory for inspection, the Japanese shipyard was very generous and provided him with detailed technical parameters; day after day, Chen Guangliang quickly organized these materials after returning home.

It's very simple. He plans to support China's shipbuilding industry in the future, so he naturally needs a lot of technical information.

Global Group Building.

The building, located on Des Voeux Road Central, is over thirty years old and served as the headquarters of Ping An Bank in the mid-1930s. Chen Guangliang surveyed the building and planned to renovate it in the late 1970s and early 1980s.

Shortly after entering the office, cousins ​​Chen Wenbo and Chen Wenming walked in together, followed by Chen Guangcong.

It's fair to say that the Chen family wields the most power within the Global Group, given that Chen Guangliang's younger brother and nephew have both joined, and are both core executives. "What brings you here?"

Chan Man-po first said, "Given that the three container terminals in Kwai Chung are already quite busy, the Hong Kong government plans to hold a public tender for Kwai Chung Container Terminal 4. I'm thinking, should we form our own container terminal company and submit the bid?"

Kwai Chung Pier 1 is a joint investment by Worldwide Shipping, three European shipping companies, and three local consortia. Pier 2 is an investment by a Japanese shipping company, and Pier 3 is an investment by an American shipping company.

The current tender for Terminal 4 Kwai Chung is undoubtedly very beneficial to Global Shipping, as the recent turmoil has not been over yet, and other consortia may not dare to invest.

“That’s feasible. Global Shipping will set up its own container terminal company—International Container Terminals—and submit bids. We at Global Shipping have extensive experience in container terminal operations, so I’m confident that the bid documents won’t be a problem. As for the price, I believe we have no doubt about it given the current situation. Wenbo, you’ll be in charge of this matter. Report directly to me!”

"Yes, Uncle."

Chan Kwong-leung plans to keep the 'port business' under the Universal Group. Coupled with its control of Hong Kong Airlines' shares, once it expands offshore, it only needs to acquire Wharf Holdings.

Then, Chen Wenming gave a report: "Esso, Texaco, and Mobile have all inquired about the launch time of our new oil tankers, hoping that we will continue to lease new oil tankers to them. I have already promised them that I will arrange for oil tankers to be launched in the first half of this year as soon as possible!"

Chen Guangliang nodded and said, "Our tankers are large and have lower costs. The US is currently short of shipping capacity, so they naturally crave it. You're absolutely right; the US shipping market is easier to capture than the European market because their shipping costs are simply too high."

Next, Chen Wenming reported, "Father, we need to build our own shipping containers, since this is the future trend."

These words seemed to awaken Chen Guangliang.

Global Shipping has not built bulk carriers for a long time; its main business is oil tankers, followed by container ships. Its bulk carrier business has a capacity of about one million tons, but those were built three or four years ago.

This also indirectly gave large shipowners such as Zhao Congyan, Cao Wenjin, and Yang Xiaohu production space.

"We want to manufacture our own containers, which will be a lucrative business in the future. In this way, Rongchang Heavy Industry will provide technical support, and Global Shipping will set up its own manufacturing company. We need to have a factory not only in Hong Kong, but also in Singapore, which has greater strategic significance. We should get both factories ready and put them into production as soon as possible."

Chen Wenming immediately replied, "Yes."

Although the Global Group has a lot of business, including Global Trading and Hong Kong Airlines, Chen Guangliang actually has a more relaxed schedule because his younger brother Chen Guangcong is the general manager of Global Shipping, his son Chen Wenming is the group's assistant general manager and head of Global Shipping's business department, and his nephew is the executive director of Global Shipping.

After the three left, Chen Guangliang fell into thought:

In this life, Hong Kong's container terminals appeared a few years earlier, while Qi Dezun's Hutchison Whampoa had not yet developed and was unlikely to have the strength to compete with Container Terminal No. 4.

In this way, Global Shipping has actually taken the initiative first.

Of Hutchison's assets today, only Watsons' retail business is truly valued by Chen Guangliang. Of course, if Hutchison Whampoa were to face bankruptcy again, Chen Guangliang would not let it go.

The massive shipbuilding activities of Global Shipping have shocked not only Greek and European shipowners, but also local shipowners.

When Hong Kong shipowners realized this and went to Japan to build ships again, their orders were already booked until the 70s. For a time, they wanted to build ships, but Japanese shipyards were full; they wanted to wait until 1971 for delivery, but they were worried about a decline in shipping prices.

In an instant, everyone became jealous, secretly wishing that Chen Guangliang would lose his gamble and his fleet would collapse.

The person most affected was Bao Yugang. He received support from HSBC, but soon discovered that Japanese shipping companies trusted Global Group more, and Japanese shipyards gave Global Shipping the green light, while they could only wait in line step by step.

As for shipbuilding in Europe, building multi-functional ships might be feasible, but building large vessels such as oil tankers and cargo ships would be far too costly, and the Hong Kong fleet is unwilling to incur such high costs.

As for Greek shipowners, they generally trust European and American shipbuilding technology and have some doubts about Japanese shipbuilding; in addition, they need the support of European and American shipping routes, so they have no choice but to build ships in Europe.

In fact, even the Universal Group symbolically builds ships in Germany, France, and the UK, which is also to maintain basic relations.

Bao Yugang had just returned from his inspection trip to Japan, his face somewhat ashen. Even if he secured a loan, the construction of the large oil tanker would be delayed until the latter half of 1970, making him hesitant to act rashly.

"With such a risky expansion of global shipping, isn't Chen Guangliang afraid that his shipping empire will collapse?"

"These days, the Japanese shipping industry trusts Worldwide Shipping more, so they don't give us many orders!"

"Chen Guangliang boosted Hong Kong's shipping industry, but also almost monopolized the transportation of Japanese oil tankers, and European and American oil tankers occupied a large share."

He was somewhat unwilling, after all, there was the behemoth that was Universal Group. Once Hong Kong shipowners developed their fleets to over 100 million tons, they found that the obstacle came from Universal Group. (End of Chapter)