Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 152 Building a Factory in Mainland China! (Seeking monthly votes, recommendations, and continued reading)
The Guia Grand Prix in Macau takes place on the third weekend of November each year.

If Chenji were to form its own racing team, even if the team only had one racing car, the preparation time would be a little over seven months.

Team setup, race car procurement, modification and training, and driver selection.
All the preparations needed to be completed within seven months, which put Li Weiming under tremendous pressure.

Upon returning to the office, he immediately began using his connections to gather information on horse racing and motor racing, and to arrange for the recruitment of part-time students.

Friday, December 23, 1979.

Just after 7 p.m., the lobby of the Furama Hotel began to bustle with activity.

The cocktail party hosted by China Resources was scheduled to officially begin at 8 p.m., but many invited guests arrived early.

Almost all of China Resources' senior management personnel were present, standing at the entrance of the hall to personally greet each invited guest.

When Chen Bingwen brought Zhao Gang to the hotel, it was already 7:30 p.m.

As soon as Li Guowei saw Chen Bingwen get out of the car, he immediately greeted him with a big smile.

"Mr. Chen, welcome, welcome!" he greeted warmly.

Chen Bingwen smiled and shook hands with Li Guowei, responding politely, "Manager Li, you're too kind. I hope I'm not late."

"Perfect timing, perfect timing!" Li Guowei said repeatedly, then stepped aside to lead the way: "Come, Mr. Chen, let me introduce you to some of our company's leaders."

With Li Guowei's introduction, Chen Bingwen shook hands and exchanged pleasantries with several senior executives of China Resources one by one.

It was only then that Chen Bingwen learned that Li Guowei was the manager of the import procurement department at China Resources Company, responsible for the procurement of goods for the mainland market.

As it approached 8 o'clock, more and more guests arrived for the reception, and the banquet hall gradually became crowded.

The business elites of Hong Kong Island gathered here, exchanging pleasantries and chatting in a lively atmosphere.

After entering the banquet hall, Chen Bingwen quickly scanned the entire room with his eyes.

He discovered that he was a complete new face here.

Most of those present were veteran entrepreneurs, bankers, and trading tycoons who had been deeply rooted in Hong Kong for many years. They were familiar with each other and formed circles of varying sizes, talking in hushed tones and laughing constantly.

In contrast, Chen Bingwen, who was under twenty years old, rose to prominence in just one year with bottled sugar water and energy drinks.

Despite his impressive reputation, he has a shallow foundation in the traditional business world, which values ​​seniority and connections, and doesn't know many people well.

Several familiar business owners nodded to Chen Bingwen from a distance, but did not take the initiative to approach him for a chat.

Li Guowei, who was standing next to Chen Bingwen, clearly noticed this.

Instead of leaving immediately to greet other guests, he thoughtfully stayed by Chen Bingwen's side, holding a wine glass and seemingly chatting casually, but in reality, he was standing up for him to avoid embarrassment.

“Chen Sheng, look over there,” Li Guowei said to Chen Bingwen in a low voice, turning slightly to the side.

He gestured to Chen Bingwen with his eyes to a group of people talking not far away. "That's Director Liu of Wantong Trading. He mainly deals in sugar re-export, warehousing, and futures hedging. He has a long-standing relationship with China Resources."

The man next to Director Liu is Lam Sau-fung, son of Lam Ping-yin, the founder of Hang Seng Bank, and works at a local Chinese-owned bank in Hong Kong.

As he spoke, he quietly gave a thumbs-up.

Chen Bingwen was initially quite interested when he heard about Wantong Trading and its business of sugar re-export, warehousing, and futures hedging.

After all, he had just bought a lot of international raw sugar futures.

However, when he heard the name Lin Xiufeng, Chen Bingwen's heart skipped a beat, and he quickly looked at Lin Xiufeng, who was chatting and laughing over there.

Lin Xiufeng appeared to be around forty years old. He was wearing a well-tailored suit and had an elegant demeanor. He was chatting and laughing with Director Liu of Wantong Trading and others, clearly a regular at such events.

Li Guowei noticed Chen Bingwen's attention and added in a low voice, "Hang Seng Bank and China Resources have some dealings in foreign exchange and project financing."

Chen Bingwen maintained a polite smile on his face, but his heart was in turmoil.

Lam Sau-fung—this name was all too familiar to him; he was one of the main figures in the “Caring Fraud Case” that soon turned Hong Kong upside down.

He clearly remembered that this banker's son, the former owner of CTV, joined forces with Malaysian businessman Chen Songqing after CTV went bankrupt.

Through fraudulent transactions and forged documents, they swindled over HK$10 billion from banks and investors, ultimately causing thousands of retail investors to lose their lives and fortunes.

This case marked the largest commercial fraud case in Hong Kong's history, shaking the entire Southeast Asian financial community.

This case has become a classic negative example for investment bankers studying financial fraud, due to the sophistication of its methods, the enormous amount of money involved, and the wide range of impacts.

Even in the 21st century, it is still frequently mentioned as a cautionary case in training by investment bank risk control departments.

Chen Bingwen recalled that in his previous life, in a business school class, the professor had spent three whole classes analyzing every aspect of the "Jianing case".

Those meticulously designed related-party transactions, the nested offshore companies, and the bribed auditors and appraisers.

Lin Xiufeng and his accomplice Chen Songqing exploited almost every loophole in the financial market to the fullest extent.

Seeing Chen Sheng staring blankly in Lin Xiufeng's direction, Li Guowei couldn't help but ask with a smile, "Chen Sheng, what are you thinking about?"

Chen Bingwen quickly regained his composure, took a sip of champagne, and said meaningfully, "Manager Li, to be honest, I've been studying some business cases recently and have discovered an interesting phenomenon."

He paused deliberately, and seeing Li Guowei's interested expression, he continued, "Some seemingly high-return investment projects often hide astonishing risks."

Like in the rubber trade, sometimes a shipment changes hands several times in Southeast Asia, with flawless documentation, only to find out in the end that the ship never loaded any cargo.

Li Guowei frowned slightly upon hearing this: "Is Mr. Chen talking about the 'ghost ship' scam?"

Such cases do indeed occur frequently in the trade sector.

“Exactly.” Chen Bingwen nodded. “But what’s even more frightening are those interconnected related transactions.”

Several shell companies provided guarantees for each other, fabricated trade backgrounds, and obtained financing from banks.

Once the snowball has grown large enough, the mastermind behind it all disappears with the money, leaving a mess for the banks and investors to clean up.

He glanced casually in Lin Xiufeng's direction, then lowered his voice slightly: "I've heard that some newly established investment and financing institutions are specializing in these kinds of high-return projects, which makes me a little worried."

Li Guowei seemed to understand something and pondered, "What Chen Sheng said is right."

"When dealing with banks, China Resources places the highest priority on risk management."

At that moment, a waiter passed by carrying drinks, and Chen Bingwen took the opportunity to get two more glasses of champagne, handing one to Li Guowei.

This seemingly accidental interruption gave Li Guowei just the right amount of time to process the information.

When he took the wine glass, a thoughtful look appeared in his eyes.

After the waiter had gone, Li Guowei lowered his voice even further: "What Mr. Chen just said about the related-party transaction scam seems to have something to do with it?"

Chen Bingwen smiled.

His words were merely a reminder to Li Guowei, and that was enough. Saying too much would seem deliberate, especially given his current status and age; having too much knowledge of the financial world's inner workings would only arouse suspicion.

"Manager Li, you flatter me," Chen Bingwen said with a light laugh as he raised his glass. "I'm just a newcomer to the business world, and I only have a superficial understanding of financial operations."

What I just said were merely some superficial insights I gained from recent reading; I hope you'll forgive my amateurish attempt.

Then he turned the topic back to the real economy: "In the end, it's still the safest thing to do is to focus on making products."

Just like our Chen's sweet soup, made with the finest ingredients, honest and trustworthy.

Li Guowei was a shrewd man, and he immediately sensed that Chen Sheng did not want to continue the conversation, so he followed up by saying, "By the way, Mr. Chen, speaking of sweet soup, something came to mind."

He lowered his voice and said very sincerely, "The mainland is now focusing on economic development, and a new 'processing with supplied materials, processing with supplied samples, assembling with supplied parts, and compensation trade' policy has been introduced, which allows foreign businesses to cooperate in the form of processing with supplied materials, processing with supplied samples, assembling with supplied parts, and compensation trade."

Most of the ingredients in your Chen Ji's sweet soups, such as coconut milk and red beans, are imported from the mainland.

If we could set up a processing plant in Bao'an, processing the raw materials into semi-finished products or directly producing bottled syrup, and then transporting them to Hong Kong Island, we could save a significant amount on transportation costs and labor.

Hearing Li Guowei's suggestion, Chen Bingwen was delighted.

He came to the China Resources reception today and wanted to take the opportunity to ask Li Guowei about the specific details of the "processing with supplied materials, processing with supplied samples, processing with supplied parts, and compensation trade" policy.

It was during this period in my previous life that the Shenzhen Special Economic Zone began to be established, and countless Hong Kong businessmen took advantage of the "processing trade" policy to open the first batch of foreign-invested factories on the mainland.

Utilizing the almost unlimited and cheap land and labor resources in the mainland, it completed the initial accumulation of capital and the leapfrog expansion of industries.

The fact that Li Guowei brought it up at this moment was exactly what he wanted.

If we can take advantage of the "processing trade" policy to be among the first to build factories in the mainland, we can save a lot of costs.

This opportunity also allows us to be among the first to introduce Chen Ji's products into the mainland market when policies loosen in the future.

Suppressing his excitement, Chen Bingwen said in a tone that was both surprised and worried, "Manager Li, your suggestion is very insightful."

However, setting up a factory in mainland China presents challenges such as land availability, labor costs, and policy issues.

"Don't worry about that," Li Guowei said with a smile, patting his shoulder. "China Resources can help make the connections."

We have connections in Bao'an County, and we can help coordinate finding land to build factories.

If you're really interested, I can arrange for someone to conduct an on-site inspection next week.

Following that, Li Guowei added, "The purpose of today's reception is twofold: firstly, to warm up for the Spring Canton Fair."

Another thing is to promote the "processing trade" policy to everyone.

Upon hearing Li Guowei's words, Chen Bingwen immediately understood.

It turns out that China Resources held this reception not only to build relationships, but also to act as a policy communicator and bridge, paving the way for the upcoming reform and opening up and the "processing trade" policy.

He smiled and said, "I see."

To be honest, Manager Li, I am indeed very interested in this new policy in mainland China.

To be honest, raw material transportation and costs are indeed a major pain point for us. If we could set up a factory in Bao'an, it would be a real lifesaver!
"China Resources' willingness to act as a go-between is a tremendous boon for Chenji!"

Seeing Chen Bingwen's reaction, Li Guowei's smile became even more sincere: "Mr. Chen is indeed a man of action. Then it's settled. We'll go to Bao'an for an on-site inspection next week!"

“It’s a deal!” Chen Bingwen agreed without hesitation.

"A word is settled!"

Li Guowei responded with a smile.

After they finished speaking, the two looked at each other and smiled, showing a mutual appreciation.

Just then, Chen Bingwen noticed a Rolls-Royce smoothly driving into the hotel lobby.

The car door opened, and a middle-aged man with a calm demeanor wearing black-rimmed glasses stepped out of the car.

Upon seeing this person, several senior executives from China Resources immediately stepped forward to greet him, displaying exceptional enthusiasm.

Li Jiacheng!
Chen Bingwen was shocked. Although he had seen photos of this business legend countless times in financial news in his previous life, this was the first time he had seen him in person.

At this moment, Li Jiacheng was around fifty years old, wearing his signature black-rimmed glasses. He had a calm and reserved demeanor and already exuded a considerable aura.

Chen Bingwen noticed that the attitude of several senior executives of China Resources was significantly different from that of other guests.

They approached him with quicker steps, more sincere smiles, and a slight forward lean when shaking hands, clearly showing how much they valued Li Jiacheng.

This reception hosted by China Resources was mainly a warm-up for the Spring Canton Fair. Logically speaking, given that Li Jiacheng's main business is real estate development, it seems that there is not much direct connection between him and import and export trade.

Even if it's to promote the "processing trade" policy, Li Jiacheng's plastic flower factory has already basically completed its industrial transfer, so there seems to be no need for him to attend this trade-themed banquet.

We can't really ask Li Ka-shing to build houses in mainland China!

"Isn't this Mr. Li Ka-shing of Cheung Kong Holdings?"

Thinking of this, Chen Bingwen asked Li Guowei beside him in a low voice with a hint of doubt.

Upon hearing this, Li Guowei smiled slightly and explained in a low voice, "It is indeed Mr. Li."

However, he now holds another position: director of China International Trust and Investment Corporation.

And to be honest, China Resources is currently establishing a joint venture with Cheung Kong Holdings to develop a real estate project in Tin Shui Wai, which is why we specifically invited him here today.

Li Guowei's explanation made Chen Bingwen suddenly realize the truth.

He knew that Li Jiacheng had served as a director of China International Trust and Investment Corporation (the predecessor of CITIC).

However, if Li Guowei hadn't mentioned it, he really wouldn't have known that Li Jiacheng had such a deep relationship with China Resources in establishing a joint venture to develop Tin Shui Wai.

“So Mr. Li has this other identity,” Chen Bingwen nodded thoughtfully. “No wonder China Resources attaches such importance to him.”

Huaxia International Trust Company (the predecessor of CITIC) is an important window company established after the reform and opening up of the mainland. Li Jiacheng just went to Yanjing to participate in the National Day celebrations last year, and this year he was invited to serve as a director, which is of great significance.

Chen Bingwen watched from afar as Li Jiacheng chatted and laughed with senior executives of China Resources, and couldn't help but sneer inwardly.

This future richest Chinese man is indeed adept at playing both sides.

He maintains good relations with the mainland, serves as a director of CITIC, and collaborates with China Resources on real estate development.

On the other hand, it had an ambiguous relationship with HSBC in Hong Kong and close ties with British conglomerates.

Ultimately, this not only paved the way for a successful entry into the mainland market but also allowed them to acquire Hutchison Whampoa almost effortlessly, demonstrating their meticulous planning and reaping all the benefits!
It is truly breathtaking.

(End of this chapter)