1977: The beginning of the blind date with the daughter of the king

Chapter 744 Hong Kong Dollar Crisis!

July 10th, Hong Kong Island, Deep Water Bay Club
In a quiet lounge, Li Changhe wearily rubbed his temples.

He's been exhausted these past few days.

Grandpa Bao from the Bao family ultimately didn't make it past July and passed away in early July.

Li Changhe naturally had to return to attend the funeral, and he was busy for many days.

Until he received Lin Yuan's invitation to meet.

The two chose to meet at the club this time.

"Is it still not allowed from above?"

When Li Changhe saw Lin Yuan, he frowned and asked.

Lin Yuan shook his head.

“The current situation is special, and it is inconvenient for you to go back. There are international friends paying their respects to Elder Liao every day, and the higher-ups cannot arrange for you to go to pay your respects unless you choose to return to China openly and honestly.”

After listening, Li Changhe remained silent.

On June 10th, he received news in Paris that his mentor, Liao, who had supported him all along, had passed away suddenly due to an acute illness.

You should know that before he left, the country was thinking of entrusting him with important responsibilities.

When Li Changhe received the news, he intended to rush back immediately to see the respected elder off.

However, Lin Yuan stopped him.

Because of that kind of situation, it was not appropriate for Li Changhe to participate directly.

Later, Li Changhe planned to visit the temple privately, but Lin Yuan only said that he would go back and apply for arrangements. Unexpectedly, he returned with the same answer.

"The above means to wait until the Spring Festival. During the Spring Festival, a special time will be arranged for you to go and pay your respects. Aunt Jing also said that Comrade Zhu Lin has already paid the respects on your behalf. As long as your intention is there, that's enough. Because of your special status, Uncle Liao won't blame you."

Lin Yuan said somewhat sadly at this moment.

Li Changhe remained silent after listening.

After a moment, Lin Yuan straightened up, looked at Li Changhe, and said seriously.

“Vic, the situation is special right now, and we can’t dwell on these pains.”

"The results from the UK are in: Margaret Thatcher has been re-elected. Their attention has returned to Hong Kong. I've been asked to speak with you. What do you think Hong Kong will do next?"

Lin Yuan said softly.

After listening, Li Changhe pondered for a moment and then said, "Actually, the situation is already quite obvious."

"The real estate and stock markets have already plummeted, but we're still holding on. So, the only economic card the Governor's Office can play is the exchange rate."

"Barring any unforeseen circumstances, the Hong Kong dollar exchange rate should plummet in the next two months!"

"Will it fall further? It's already down to 8 yuan to one US dollar, is it going to keep falling?"

Lin Yuan said in surprise.

Li Changhe said softly, "What's eight yuan? I think this wave will reach at least ten yuan."

"Actually, how much it falls doesn't matter. What's important is public opinion. Changes in foreign exchange rates affect people's morale the most. You need to remind us of this and be prepared to deal with the impact of public opinion."

"Ordinary people are not economists; they cannot make accurate judgments. Therefore, in the future, the British side will definitely spread panic slogans, such as deliberately exaggerating the situation, saying that the Hong Kong dollar will fall to 20 Hong Kong dollars to one US dollar."

"Economists are well aware that the exchange rate cannot fall like this. If it did, the entire Hong Kong economy would collapse."

"But ordinary people will definitely believe it. They don't have much judgment and can only rely on media reports. Once they are led by such rhetoric, panic will arise."

After listening, Lin Yuan calmly nodded, then continued to ask, "So, should we only deal with public opinion?"

"I think the main issue is public opinion. Secondly, our banks can also make some appropriate statements, such as opening up dollar exchange, and we can allocate some funds to support Hong Kong. It's mainly about the attitude."

"Foreign exchange is a game where you lose eight hundred of your own money while killing a thousand of your enemies. If there is a real panic, not to mention anything else, HSBC will not be able to withstand it. If the people of Hong Kong start to panic and exchange for US dollars, HSBC will definitely be bankrupted by a run on the bank."

"So when it reaches a certain number, I think the British will not be able to hold on. My estimate is around ten dollars. Their absolute limit is to push the exchange rate down to 10 to 1, and then they will have to save themselves."

Li Changhe knew perfectly well that the Hong Kong dollar had fallen as low as 9.6 to 1 US dollar, but he couldn't tell Lin Yuan that precisely, so a rough estimate of 10 to 1 was enough for him.

"I understand. In other words, the current exchange rate is already quite low. If it goes down any further, the British don't have much room to exert pressure. Their main concern is dealing with the impact of public opinion, right?"

Lin Yuan repeated these words again. He couldn't possibly write down these kinds of conversations, so he could only keep them in his mind.

Li Changhe nodded: "Yes, that's it."

"Okay, I'll send your analysis back soon. Is there anything else you need my help with?"

Lin Yuan asked softly at this moment.

Li Changhe thought for a moment and then said, "I do have another idea. Could you please pass it on to me?"

"This matter isn't particularly urgent, but I need help from our side."

"Starting this year, oil prices have plummeted, which has affected the global shipping industry. Currently, in Hong Kong, apart from the Pao family, the other three shipping companies are not doing very well."

"The Zhao family's Wah Kwong Shipping is doing everything they can to save themselves. They have already approached me to sell off HK$500 million worth of real estate and antiques."

"As for the Dong family's Dong's Shipping, it is now in dire straits. If the shipping magnate Dong were still alive, he could have managed to solve the problem with his influence. However, he passed away last year, and now Oriental Shipping is expected to suffer losses year after year."

"If the government wants to get involved in ocean shipping and build a global shipping fleet, the past two years are the most opportune time."

"That's the same idea on my end. I hope that our side can step in and facilitate the merger between me and the Dong family. Well, it would be best to do it under the name of the Ninghai Chamber of Commerce."

Lin Yuan then looked at Li Changhe with a puzzled expression: "Why don't you just go and buy it yourself?"

"Like you said, they're having operational difficulties right now. If you step in to acquire them, do you think they'll refuse?"

Li Changhe shook his head: "This matter is not as simple as you think."

"First of all, the Dong family and the Bao family used to be competitors. The shipping magnate Dong and my uncle were only superficially friendly. The shipping magnate Dong wanted to be superior to the Bao family all his life. So, if you ask me to acquire the Dong family, how could they possibly sell?"

"Secondly, both companies belong to the Ningbo business community, and there is also the Zhejiang Chamber of Commerce in Hong Kong. This kind of business emphasizes mutual help. If I were to discuss an acquisition, it would be like kicking the Tung family when they are down. The older generation of Zhejiang businessmen would not stand for such behavior." "Finally, there is another troublesome point. If I really take over Tung's Shipping, it will be very difficult for us to conduct a direct transaction if the country wants to invest in or acquire Tung's Shipping in the future."

"There will be many factors that will affect me at that time, and there will probably be quite a few people getting involved. The whole transaction may not be so smooth."

“My idea is that you get the higher-ups to facilitate the merger of my shipping company with Dong’s Shipping. In terms of market value, we can still allow Dong’s to hold the majority of the shares. For example, they can hold 40%, I can hold 30%, and the remaining portion can be held by some of our people.”

“I think the Huo family could act as a go-between and take 10 percent. CITIC could also take this opportunity to get involved and take 10 percent or 5 percent or something like that.”

"In this way, on the surface, the Dong and Bao families will have the largest share, and the others will not be the main ones. Later, our shipping company can step forward, take over the Dong family's shares first, and then take over the others. Even if my side is not affected, it will not affect our acquisition of the entire Oriental Shipping Company."

"By using this method of leveraging existing resources, we can build a complete and world-class shipping company."

If China wants to reform and open up, it is impossible without its own shipping companies, since a large amount of resources and technical equipment need to be imported from overseas, and the main mode of freight is sea freight.

However, shipping companies cannot be built in a day or two; they take ten or even twenty years to establish. The reason for this lies in the cost and time required for shipbuilding.

Just like Li Changhe and Bao Yuxing's company, even after the merger, the current scale is not very large. To put it bluntly, the ships cannot be purchased so quickly.

A single ship can cost hundreds of millions of dollars, and the construction period can take several years. Such fleet expansion is very difficult for China at present.

On the one hand, there isn't enough funding for shipbuilding; on the other hand, time is also a major issue.

Li Changhe's current plan is to unite the Dong family and his shipping company, merge them directly, and create a world-class shipping company. In the future, the government can simply buy the finished products.

In fact, this is what the country has done in history. COSCO Shipping directly acquired the fleet of Tung's Shipping.

However, Li Changhe now feels that relying solely on the Dong family to develop slowly is too inefficient.

Li Changhe will continue to make money in the next few years, so why not take this opportunity to merge with Dong's Shipping and then directly expand the ocean shipping business?

However, he couldn't openly pursue the acquisition, so he had to rely on his superiors to broker it.

"Understood, I'll report back when I get back!"

Lin Yuan nodded, understanding Li Changhe's plan.

Li Changhe thought for a moment, then said to Lin Yuan, "Don't worry too much about this. Dong's Shipping hasn't reached the point of life or death yet. I estimate that they will be completely unable to hold on until next year or the year after."

“Go back and talk to Elder Lu about this. I think it would be most appropriate for him to join forces with the Ninghai Chamber of Commerce to take action.”

"At that time, I can relax the conditions because of face here, and then facilitate the merger."

This matter is neither a big deal nor a small one, but Li Changhe is not in a hurry. He just wants the country to have this preparation first.

He knew that the Tung family's relationship with China was actually quite good. The shipping magnate Tung had always maintained close ties with China, and had been a patriotic businessman since the War of Resistance against Japan.

"Okay, I understand. When I get back, I'll talk to Grandpa Lu and help you push things forward."

"That's all for now. I don't have anything else on my end."

"I will be relatively silent for the next period of time. Firstly, I have communicated with Downing Street and will not take any further outrageous actions in exchange for their car brand."

"Secondly, this wave of exchange rate fluctuations in Hong Kong presents a great opportunity for me, and I'm going to make a large-scale acquisition."

"With the currency plummeting and the stock and property markets experiencing successive panics, most people on Hong Kong Island will become pessimistic. I'm preparing to return to business expansion."

At this moment, Li Changhe turned to Lin Yuan and said something to him, implying that Lin Yuan should not come looking for him unless it was something important.

After listening, Lin Yuan thought for a moment, then hesitated and said, "May I ask which company you plan to target?"

"Well, the main reason is that there are a lot of contacts in China now, and many families have secretly made overtures. I'm afraid that if you take action, it will cause internal conflicts like what happened with Li Jiacheng."

Li Changhe shook his head: "No, there's nothing to hide. The next target I plan to make a move against is Wheelock. They have no connection with the mainland."

The two families behind Wheelock were British and Chinese, respectively. Such families would never have any connection with China.

As expected, Lin Yuan's expression changed upon hearing the name Wheelock.

"So it was them. Then go ahead and do your thing, especially the Zhang family. It would be best if they were all wiped out!"

Lin Yuan knew some things quite clearly, and because of this, he hated the Zhang family to the core.

"I know, I already have a plan to deal with them, you don't need to worry about that."

"However, I will probably take some time before making a move. You can just observe and wait."

Li Changhe plans to wait until the Hong Kong dollar crisis has passed before taking action against Wheelock; he is not in a hurry now.

After meeting Lin Yuan, Li Changhe stayed on Hong Kong Island and did not leave again.

Time flew by, and it was already September. With the intervention of the Governor's Office and HSBC, the exchange rate of the Hong Kong dollar began to fall all the way down. Soon, it fell below nine dollars and continued to plummet every day.

Various crisis theories began to appear in newspapers, with some saying the Hong Kong dollar would fall to fifteen and others saying it would fall to twenty.

In short, Hong Kong Island residents with savings began flocking to major banks to exchange their Hong Kong dollars for US dollars once again.

At this moment, Li Changhe decisively gave the order, instructing his men to begin exchanging all the US dollars in their hands into Hong Kong dollars.

This time, he not only converted the $800 million he had deposited in HSBC and Hang Seng into Hong Kong dollars, but also instructed investment institutions in the United States to convert all the remaining US dollars into Hong Kong dollars.

By September 24, the exchange rate between the Hong Kong dollar and the US dollar reached its peak, with 9.6 Hong Kong dollars to one US dollar.

At this time, Li Changhe had exchanged as much as 1.8 billion US dollars, which translates to an average of 9.3 Hong Kong dollars for one US dollar.

It was this wave that allowed Li Changhe to amass a fortune of HK$17.6 billion.

Of course, not all of this money belongs to him; much of it belongs to investors in the United States.

However, Li Changhe's move undoubtedly alarmed the Governor's Office and HSBC.

When Shen Bi looked at the statistical report sent by his subordinates, he was completely stunned.

With over 10 billion Hong Kong dollars, Bao Zeyang is really going to cause a huge upheaval!
At this moment, Shen Bi was unaware that his statistics might not be comprehensive, and that a lot of Bao Zeyang's funds were transferred to Hong Kong through US banks, meaning HSBC could not obtain the core data.

In other words, Bao Zeyang likely has approximately HK$20 billion in cash on hand at this moment.

Shen Bi has gone a bit crazy!

(End of this chapter)