A century-old wealthy family that rose from Shanghai

Time flies, and in the blink of an eye, it's the second half of the year (1971).

On this day, Chen Guangliang, along with Yan Renmei and Chen Wensheng, inspected the underground vault of the Ping An Bank Building.

Pushing open the heavy door, the person in charge of the underground vault introduced, "Mr. Chen, Mrs. Chen, this batch of 18 tons of gold is in this vault."

Later, Chen Guangliang and Yan Renmei arrived at a shelf where gold pieces were displayed, dazzlingly bright. Of course, given Chen Guangliang's current wealth, a mere HK$1 million worth of gold was nothing to him.

But he really enjoyed the 'joy of making money through investment'. Starting in August of last year, the United States was unable to maintain the exchange rate between gold and the dollar, and the gold reserves of the United States were rapidly emptied by various countries.

Even before the Bretton Woods system was abolished, gold had already risen from $35 per ounce to the current $40 per ounce. It's believed that the US government will soon be unable to sustain this.

The cost of the 18 tons of gold invested by the 'Chen Guangliang Family Office' was less than $40 per ounce on average, around $38 per ounce, mainly including transportation and handling costs.

Chen Guangliang asked, "What about Ping An Investment's gold reserves?"

Fang Runxing, the general manager of Ping An Bank, immediately pointed to an area and said, "This is the gold reserve of Ping An Investment, totaling 20 tons."

Ping An Investment has received a lot of 'dividends' over the years, meaning that when Ping An Bank has sufficient profits, it will allocate them to Ping An Investment.

Ping An Bank primarily engages in commercial banking business—deposits and loans—and focuses on developing personal retail banking services.

However, Chen Guangliang planned to list Ping An Bank by the end of 1972, so he would hurry up and allocate ample funds to Ping An Investment.

After Ping An Bank goes public, the funds raised can be used to invest in real estate and securities, and the bank will be developed using a professional management model.

It's not that Chen Wensheng is incapable of serving as the general manager of Ping An Bank, but rather that it's unnecessary; he can later serve as the general manager of Ping An Financial Group and concurrently as the general manager of Ping An Investment.

Unless Chen Wensheng's children are suitable for the position, it would be better to let professional managers run Ping An Bank, with Chen only needing to control it as the major shareholder and chairman.

Only after seeing the gold did Chen Guangliang leave the scene, satisfied. Closing the 6-ton vault door required three people; all three needed to be present to open it, otherwise, one person alone could not open it.

Back in the office of Ping An Bank Building.

Yan Renmei personally poured tea for Chen Guangliang. Seeing that Chen Guangliang was still thinking about things, she said, "Your children have already received enough. You should rest too. Don't always think about leaving them too much."

Chen Guangliang snapped out of his reverie, took the teacup, and said with a smile, "I still have to offer them advice. The future is uncertain; if we don't move forward, we fall behind. You could say I'm far from ready to retire."

Yan Renmei came up behind him and massaged Chen Guangliang. Her hands were still delicate and beautiful, and the years had left no trace on them.

"I don't mean retirement, but I want you to relax more."

Chen Guangliang held her hand and said, "Perfect timing. Audrey and the others are coming to Hong Kong soon. We can go to Discovery Bay and have a good week of rest."

Yan Renmei said coquettishly, "I told you to rest and relax, not to enjoy the blessings of having multiple wives."

Chen Guangliang held her delicate hand and smiled, "There's nothing I can do, my needs are just too strong!"

Yan Renmei blushed. This man didn't look 61 at all, and she didn't look 56 either. She looked 20 or 30 years younger, and she was truly young in terms of biological age.

The four women readily agreed to the man's requests, as long as he didn't seek out other women or have a fifth wife.

It seems unlikely that this man will seek a fifth wife. This is because people have noticed that Chen Guangliang's pursuit of women isn't simply driven by lust; a crucial factor is his need to develop a branch of the family business in the local area.

As for whether they will be able to take care of this man when they get old and can no longer do so, or whether they will be able to control his body, they have no idea. However, they will absolutely not allow him to have any more children or bring them into the house.

In 1971 Hong Kong, Cheung Kong Industrial Group had already firmly established itself as the leading manufacturing company in Hong Kong, thanks to its three pillars: Sun Fung Textiles, Wing Cheong Heavy Industries, and Wah Tai Toys. Its fourth largest subsidiary, Midea Group, had also completed its structural upgrade, establishing three divisions: Midea Electric Appliances, Midea Electronics, and Midea Games & Entertainment. With "consumer electronics" as its core, it expanded into radios, tape recorders, arcade games, and other fields, contributing 10% of Hong Kong's industrial output and a staggering 15% of its profits. In 1970, Cheung Kong Industrial Group's net profit was nearly HK$3 million, far exceeding HSBC's profit of just over HK$2 million, making it a veritable "profit king" in Hong Kong's business world.

Although Hong Kong real estate had begun to be very profitable at this time, in fact, before the 1970s, opening a factory in Hong Kong was more profitable.

On this day, Chen Guangliang brought his eldest son, Chen Wenkai, into the Midea Electronics Building. From the workshop to the conference room, every place exuded a vibrant R&D energy.

At that time, Midea's product portfolio was already quite substantial: monthly radio exports exceeded 30 units, making Hong Kong the "world's third largest radio manufacturer" (after the United States and Japan); tape recorders, with their leading technology, competed with Sony and Sanyo in overseas markets; telephones used overseas customized chips, achieving world-class performance and becoming a stable supplier for the five major US telecommunications operators; and the "Ping Pong Arcade" launched at the end of 1970 ignited the world as the "beginning of modern video game consoles." Although American and Japanese media sourly claimed that "the core technology came from American studios, and Hong Kong was only responsible for production," the fact that "arcade games originated in Hong Kong" had long been recognized by the market and became a "proud label" of Hong Kong's electronics industry.

"Mr. Chen, Mr. Chen, this is the prototype of our portable music player." Yang Xiancheng, general manager of Midea Group, stepped forward, holding a device larger than the palm of his hand. The device was silver-gray with a play button and volume knob on the side and a headphone jack on the top. Although it was a bit bulky, it already had the basic shape of a "portable music device".

Chen Guangliang took the prototype, skillfully fastened it to his belt buckle, put on the matching headphones, and pressed play. Crisp music flowed out, but it was accompanied by obvious noise. The sound quality, body size, and battery life were all far from ideal.

“The problems are obvious,” he said, taking off his headphones and pointing out the core flaws in a calm yet precise tone, “The sound quality isn’t clear enough, and there’s distortion in the high frequencies; the device is too heavy and too large, and wearing it for extended periods will tighten the belt; the battery life is only 45 minutes at most, which is far from the goal of ‘listening to music anytime, anywhere.’ We need to remove the recording function and speakers, and add high-fidelity sound quality.”

The twenty-odd engineers standing to the side held their breath, carefully taking notes of the suggestions. Half of the team consisted of electronics experts who had returned from studying abroad, and the other half were local graduates from the University of Hong Kong and the Hong Kong Polytechnic. The electronics engineering programs at these two institutions were able to rise rapidly in the 60s thanks to the financial support of the Chan Kwong Leung family over the years, thus cultivating the first batch of local electronics talents for Hong Kong.

"The technological hurdles of portable music players are not insurmountable for us, who can manufacture radios and tape recorders. The key lies in how meticulously we refine them to pursue a comfortable personal entertainment experience."

When Sony launched the Walkman in its previous life, it quickly modified existing recorder technology and achieved mass production in just six months. Although Midea's recorder technology is not as advanced as Sony's seven years later, with targeted optimization, it can definitely launch a mature product in the next few years.

Chen Guangliang paused, his gaze sweeping over the engineers present. "You must remember, the core of this product is 'portability' and 'immersion,' allowing users to 'walk around wearing headphones and feel as if they are in a private concert hall.' Once successfully developed, the global market will be willing to pay for it."

The engineers were instantly filled with fighting spirit.

They knew that Chen Guangliang had an accurate prediction of future trends—from arcade machines to Walkmans, every move he made was at the forefront of the consumer electronics boom.

Yang Xiancheng immediately issued a pledge: "We will immediately establish a special improvement team to prioritize tackling the three major challenges of sound quality, lightweight design, and battery life. We will also advance patent applications simultaneously, striving to complete the technological accumulation within three years and achieve mass production at the same time."

After inspecting the portable music player business unit, Chen Guangliang convened Midea's management team and core engineers in the conference room and raised a new topic: "What are your thoughts on smartwatches?"

Yang Xiancheng immediately responded: "The electronic watch industry has already taken off since the rise of integrated circuits. Intel is currently in talks to acquire Microma, which clearly shows its ambition to enter this field by leveraging its chip advantage."

Other executives and engineers added that some mentioned Japanese manufacturers had already begun investing, while others pointed out that traditional mechanical watch companies were still taking a wait-and-see approach to electronic watches, and the market had not yet formed a popular pattern.

After listening, Chen Guangliang slowly said, "Midea also wants to enter the electronic watch industry."

As soon as he finished speaking, the conference room fell silent—everyone present knew that electronic watches involved entirely new technologies such as integrated circuits and LCD displays, which were not closely related to Midea's existing business, and that the R&D investment was huge with unknown risks. But no one questioned it, because they were already used to Chen Guangliang's style of "planning for the future in advance."

"We don't need to rush things. We should start with assembly technology. We'll customize dedicated CPUs from Intel and import LCD monitors from Japan to solve the 'having or not having' problem first, and then launch Midea-branded electronic watches. I think the United States intends to support Taiwan's semiconductor industry, and in the future, Hong Kong will still have an advantage in competing with Japan."

In its previous life, after Intel acquired Microma in 1972, it would have launched a high-end electronic watch priced at $400. However, within a few years, Japanese companies like Citizen, Casio, and Seiko would have driven the price down to tens of dollars through massive production expansion. In 1978, Intel would have withdrawn from the complete electronic device market due to dismal profits and instead focused on CPU research and development.

By the early 80s, Japan and Hong Kong would occupy the top two positions in the global electronic watch market. Hong Kong's rise was inseparable from the support of Taiwan's semiconductor industry. In 1977, Taiwan's Industrial Technology Research Institute (ITRI) built its first integrated circuit factory, and the first batch of products were electronic watch ICs. With technical training from the American RCA and an order for 10 chips, it quickly achieved a technological breakthrough, and the yield rate even exceeded that of the original American manufacturer.

These words enlightened everyone.

Yang Xiancheng took the lead in stating: "We will immediately establish an electronic watch business unit and draw on our core R&D resources. Even if we are not profitable in the early stages, we will lay a solid technological foundation."

Other management and engineers echoed this sentiment, their eyes brimming with enthusiasm—they knew that by following Chen Guangliang, Midea could not only earn immediate profits but also seize the golden opportunity of the next decade in the consumer electronics industry.

Watching his father's heated discussion with Midea's team, Chen Wenkai was filled with emotion: his father always managed to pinpoint the breakthrough point before industrial transformations occurred, and the reason why Yangtze River Industrial Group was able to far surpass its peers was precisely because of this courage to "invest in R&D regardless of cost and dare to plan for the future".

A large portion of Midea Group's annual profits is actually invested by the father in electronic technology research and development, as well as in the cultivation of talent in Hong Kong.

After the meeting.

Chen Guangliang spoke privately with his son, Chen Wenkai, and asked him, "What is the current state of Hong Kong's semiconductor industry?"

Chen Wenkai immediately stated, “The electronics industry is developing, but semiconductors are no longer the best investment destination in Asia. A well-developed semiconductor industry has strict requirements for factory specifications. An ideal factory should have a large single-story area because high-rise factories are prone to vibration, which affects the precision of the machines. In addition, other countries and regions in Asia offer government subsidies and more abundant land resources that Hong Kong does not have, as well as lower wages. Although the hourly wage of Hong Kong workers is only 25 cents, which is only one-tenth of that of American workers, the daily wage of Taiwanese workers is only 19 cents, while that in Malaysia is 15 cents, in Singapore it is 11 cents, and in South Korea it is only 10 cents per hour. Packaging and testing does not have a very high technical content to begin with, yet Fairchild Semiconductor, Texas Instruments, Intel, and AMD have moved to Singapore and Penang, Malaysia to open factories. Some multinational companies from Taiwan and South Korea have also relocated there.”

Chen Guangliang nodded and said, "If they won't invest, then we will. You will be in charge of setting up our semiconductor department. It's a long process to go from nothing to something, and the key is whether we are willing to invest."

In the mid-1970s, Hong Kong even had a semiconductor equipment company called ASMPT, which later became a small giant in the equipment industry. Therefore, Hong Kong is a suitable place for the development of high technology, after all, it is connected to the West and backed by the motherland.

Chen Guangliang's idea was to invest first, and as long as the technology in the mainland was good, there would be great prospects. Then, after the 1980s, he would gradually realize the "Hong Kong + Mainland" model.

Chen Wenkai said, "Okay, I will definitely find the right balance. We can't let these high-tech investments drag Midea down, but we can also demonstrate our investment in the technology field and create a long-term virtuous cycle of investment."

"I'm relieved that you're so rational!"

Investing in the technology industry requires perseverance, but it should never be done on a whim.

Hong Kong has an advantage in that it has almost no import and export taxes, and the prices of some products are even cheaper than in their country of origin. This allows the assembly industry to make a profit margin by importing transistors, integrated circuits, and liquid crystal displays from the United States or Japan.

Unlike other Hong Kong electronics companies, Midea Group invested heavily in research and development while earning profits from assembly. This increased the added value of its products, allowing them to earn even more and further invest in R&D. (End of Chapter)