Sharpening the Blade Against the Red Wall: From Hong Kong to Handong

July's heat was intense; the sweltering summer heat of Kyoto swept in, the plane tree leaves along Chang'an Avenue curled at the edges, and the cicadas' desperate chirping echoed through the streets and alleys. But inside a meeting room in Zhongnanhai, a solemn and dignified atmosphere prevailed. The cool air from the air conditioner dispelled the heat, a dark green tablecloth covered the long conference table, neatly arranged with documents, pens, and glasses, and the quartz clock on the wall ticked away, recording the passing of time.

Today, a symposium of central economic experts is being held here, with only one agenda item—to review Zhou Jin's "Early Warning and Practical Response Plan for Financial Risks After Hong Kong's Return to China." The participants are all authoritative figures in the domestic economic, financial, and security fields. Seated at the head of the table is the Vice Minister of the State Council in charge of economic work, flanked by the Governor of the People's Bank of China, the Director of the State Administration of Foreign Exchange, the Vice Minister of Finance, relevant officials from the Ministry of State Security, and Zhou Jin's mentor, Professor Shen Mingyuan of the Department of International Finance at Peking University. Zhou Jin, as the report's author, sits at the end of the conference table. His well-fitting white shirt is slightly damp with sweat, and his palms are also sweaty, but his eyes are exceptionally clear, revealing a confident and resolute demeanor.

The meeting was chaired by the deputy leader, who gestured to Zhou Jin: "Comrade Zhou Jin, the higher-ups have already read this report and attach great importance to it. We have invited experts from all walks of life today to hear you explain it in detail, especially the operating model of the 'secret company' you proposed, and to thoroughly explain your ideas."

Zhou Jin stood up, nodded slightly, and walked to the projection screen at the front, pulling up the PowerPoint presentation he had prepared beforehand. As the slides changed, his steady and powerful voice resounded in the conference room: "Distinguished leaders and experts, the core of my report today is how to turn the tide and accumulate strategic assets for the country while preventing international capital from impacting Hong Kong's financial market. The first three parts of the report have already analyzed in detail the current situation, potential risks, and basic countermeasures of Hong Kong's financial market. Today, I will focus on the fourth part—the core vehicle of our strategic bottom-fishing plan, which is Huayao Capital, as we envision it."

He paused, clicked the mouse, and the basic information of Huayao Capital popped up on the screen: "First is the company name, Huayao Capital. To the outside world, we will claim that this is a private investment company initiated by patriotic Hong Kong businessmen. The registered capital is tentatively set at 50 billion yuan, all of which will be allocated from the central bank's foreign exchange reserves. Additional funds can be added later according to the investment operation situation."

Before the words were even finished, the Vice Minister of Finance spoke first, tapping the table lightly with his fingertip: "Comrade Zhou Jin, 50 billion yuan in foreign exchange reserves is no small amount. Will allocating this money from the reserves affect the normal foreign exchange regulation function? Furthermore, since it's publicly claimed to be a private company, how can we guarantee the safety of the funds and the effectiveness of supervision?"

Zhou Jin was prepared and calmly replied, "Vice Minister, this 50 billion yuan only accounts for 1.2% of my country's current foreign exchange reserves and will not affect the basic regulatory function. Moreover, we have established a strict fund supervision mechanism, which will be explained in detail later. As for secrecy, this is the core of Huayao Capital's operation and the key to preventing international capital from detecting it."

He switched to the next slide, which displayed a complex equity structure diagram: "Our core idea is a multi-layered offshore company structure. First, we register a shell company in the Cayman Islands as Huayao Capital's first-tier holding platform; then, through this shell company, we register a second investment company in the British Virgin Islands; finally, this British Virgin Islands company controls the Huayao Capital entity registered in Hong Kong. With these layers of nesting, it is extremely difficult for international capital to penetrate the equity structure and find that the actual controller is state-owned. At the same time, we will hire well-known local law firms and accounting firms in Hong Kong to conduct compliance reviews, further concealing the true background."

The central bank governor nodded slightly, then posed a new question: "The operational model mentions investing in Southeast Asian mining, ports, Hong Kong real estate, and financial equity. These areas are very broad. How can we ensure the accuracy of investment decisions? If a misjudgment occurs, this money could face huge losses."

"This is precisely the original intention behind our management structure." Zhou Jin pulled up a slide showing the management structure, her tone becoming increasingly confident. "Huayao Capital's management structure is a model of checks and balances and professional division of labor. Professor Shen Mingyuan serves as Honorary Chairman, responsible for strategic guidance, leveraging his more than 30 years of experience in international financial research to grasp the macro direction; I serve as Chief Investment Officer, responsible for specific investment decisions, setting target selection criteria and entry timing; the Ministry of State Security will send a dedicated person as Risk Control Director, responsible for background checks and security control, preventing infiltration by foreign forces, while also monitoring the flow of funds to ensure it does not deviate from national strategy; the Ministry of Finance and the People's Bank of China will each send a representative to the Board of Directors, responsible for fund supervision and compliance review, and every investment exceeding 50 million must be jointly approved by the Board of Directors."

He turned to Shen Mingyuan and added, "Our investment logic is very clear: focus on undervalued, high-potential hard assets, diversify our investments, and don't put all our eggs in one basket. Southeast Asian minerals and ports are scarce strategic resources, currently valued at historical lows. Moreover, Southeast Asian countries have high external debt and fragile economic structures. Asset prices will inevitably plummet after the crisis, which is the best time for us to buy at the bottom. Hong Kong real estate and financial institution equity, backed by the mainland China market, have unquestionable long-term value. Once international capital shorts the market and triggers a crash, it will be our signal to enter the market."

At this point, the head of the Ministry of State Security raised a pointed question: "How can we ensure that Huayao Capital's operations are not detected by international capital? Once our bottom-fishing activities are targeted, we may be targeted and not only fail to make money, but also expose our strategic intentions."

Zhou Jin took a deep breath, her gaze sharp: "First, we will operate discreetly. Huayao Capital will not hold a listing ceremony, will not accept media interviews, and will complete all investment activities through offshore accounts to avoid large-scale buying on the open market. Instead, we will absorb assets through negotiated transfers and private transactions. Second, we will use the identities of patriotic Hong Kong businessmen as a cover, having several prestigious patriotic entrepreneurs in Hong Kong act as nominal shareholders to confuse the attention of international capital. Third, we will control the pace. Our investment will proceed in two steps. The first step will be to make small-scale deployments before the outbreak of the Southeast Asian financial crisis. The second step will be to concentrate our efforts when the financial war in Hong Kong is at its most intense. At this time, market panic will reach its peak, and no one will notice the bottom-fishing actions of a 'private company.'"

A brief silence fell over the room as the experts, heads bowed, perused the reports, their brows furrowing and relaxing intermittently. Just then, Shen Mingyuan slowly rose, his gaze sweeping across the room, his tone earnest and firm: "Distinguished leaders and colleagues, I am Zhou Jin's mentor and the academic advisor for this report. I can say with certainty that Zhou Jin's plan is the most comprehensive and feasible solution I have ever seen. His judgment on the logic of international capital operations is not mere conjecture, but based on extensive historical cases and data analysis—from Soros's attack on the British pound to the Mexican financial crisis, every step of the deduction is meticulously crafted."

Shen Mingyuan paused, then emphasized, "More importantly, the concept of the 'Secret Company' breaks away from traditional defensive thinking, combining crisis prevention with strengthening national power. This is extremely forward-thinking. Currently, the international financial market is volatile. We cannot just passively defend; we must take the initiative and use the crisis to our advantage. Huayao Capital is our weapon for this."

Shen Mingyuan's words were like a pebble thrown into a calm lake, creating ripples. The experts began to whisper among themselves, their discussions rising and falling. The governor of the central bank and the vice minister of finance exchanged a few words in hushed tones, while the director of the State Administration of Foreign Exchange carefully studied the equity structure diagram, nodding occasionally.

The deputy leader raised his hand to quiet the room again. He looked at everyone and asked in a deep voice, "Does anyone have any further questions? If not, let's make a clear statement on the feasibility of this plan."

After a brief silence, the central bank governor spoke first: "I think the plan is feasible. The design of the multi-layered offshore structure can effectively hide the state-owned background, and the investment logic is in line with the current market trend. As long as the risks are well controlled, the returns on this investment are worth looking forward to."

The Vice Minister of Finance followed up: "I agree. The design of the fund supervision mechanism is very sound. The checks and balances among multiple parties can prevent the abuse of power. The allocation of 50 billion yuan is also within a reasonable range. It can be dynamically adjusted according to the actual situation in the future."

The head of the Ministry of State Security nodded in agreement: "From a security perspective, the appointment of a risk control director and the background check mechanism can effectively prevent risks. As long as the confidentiality agreement is strictly enforced, Huayao Capital's operations will not be easily exposed."

Other experts also expressed their approval, and the doubts gradually dissipated, replaced by suggestions for improving the plan.

After two hours of intense discussion, the deputy leader gave a concluding speech: "Comrades, based on today's discussions, everyone agrees that Comrade Zhou Jin's report is highly feasible and practical. I suggest: First, we should report the results of this symposium to the higher authorities as soon as possible and recommend the establishment of a Hong Kong Financial Stability Emergency Response Team to coordinate the prevention and response to financial risks in Hong Kong; Second, we should instruct the Ministry of Finance, the People's Bank of China, and the Ministry of State Security to jointly promote the establishment of Huayao Capital, and complete the offshore company registration, fund transfer, and team building as soon as possible according to the framework and model discussed today; Third, Comrade Zhou Jin and Professor Shen Mingyuan should continue to refine the plan, supplementing the details of risk response based on the suggestions made by the experts, to ensure the flawless operation of Huayao Capital."

As the words fell, enthusiastic applause erupted in the conference room. Zhou Jin stood in front of the projection screen, watching the scene unfold before him, a surge of indescribable excitement welling up within him. He knew that behind the applause lay the nation's approval of the plan, and the official launch of a financial counterattack.

As the meeting adjourned, the last rays of the setting sun streamed through the windows into the conference room, gilding the dark green tablecloth with a golden edge. Shen Mingyuan patted Zhou Jin on the shoulder and smiled with satisfaction, "Good lad, you didn't let me down. Now, it's time for real combat."

Zhou Jin nodded vigorously, his gaze fixed on the window. In the distance, Chang'an Avenue bustled with traffic, neon lights just beginning to illuminate the scene. He knew that a game of chess concerning Hong Kong's financial security and the nation's strategic interests had officially begun.