America: My Time

Chapter 485 Laying out Xiangjiang
Chapter 485 Laying Out Hong Kong
John, currently in China, is unaware of the crazy ideas those guys in Japan have, and even less aware that they have many insane ideas because of the changes in the United States. John is currently increasing his investment in China, and he will not give up such a great opportunity. John is willing to participate in any investment opportunity.

However, such time was limited. After finalizing numerous collaborations with China, John had to leave. Standard Chartered Bank in Hong Kong had stabilized and intended to continue its previous strategy of overseas expansion. John had a different opinion on this matter, but it was difficult and unsafe to discuss over the phone. Therefore, it was best to meet in person to discuss such an important matter. The development of a bank was no small matter; a slight misstep could lead to great danger.

Although Standard Chartered Bank and Pacific Investment Management merged, this does not mean that Standard Chartered Bank's strength has increased. Standard Chartered Bank, which seems to have stabilized, is not without problems. Moreover, loosening credit is not a good thing. Standard Chartered Bank cannot choose to make such a decision at this time. Tightening credit was the strategy set by John before. Even if the situation of Standard Chartered Bank has stabilized and the privatization process has been completely completed, John does not dare to be careless.

As the plane slowly landed at Hong Kong Airport, John's feelings were complex. Yuan Tianfan's suggestion might stem from circumstances John was unaware of. After all, things weren't entirely under his control. He didn't know Standard Chartered Bank's past development plans or their arrangements. Similarly, he didn't know the extent of the impact of the dollar's depreciation and the yen's appreciation on Hong Kong, as he hadn't paid much attention to Hong Kong's affairs.

Does the depreciation of the US dollar have a significant impact on Hong Kong? Yes, it does. Hong Kong's exchange rate is currently pegged to the US dollar. When the US dollar depreciates, the Hong Kong dollar will naturally depreciate as well, which will inevitably affect Hong Kong's economy. Hong Kong needs to import everything, so it will inevitably be significantly affected, especially since Hong Kong's financial market is currently in a very chaotic state.

John didn't go home to rest. He went straight to Standard Chartered Bank to meet with Yuan Tianfan and learn about the current situation of Standard Chartered Bank. Standard Chartered Bank was related to his future plans, and he couldn't afford any mistakes.

“Tianfan, tell me what you’re thinking. Given the current situation in Hong Kong, I’m sure you have your reasons for wanting to continue expanding!” John didn’t immediately reject Yuan Tianfan’s proposal, but instead gave him a chance to explain.

"Boss, it's like this. The current situation in Hong Kong has been significantly impacted by the depreciation of the US dollar, affecting the purchasing power of the Hong Kong dollar. However, exports to the US have remained unchanged, which has had a considerable impact on many businesses, especially the textile industry, which has been hit the hardest. The real estate industry has also not fully recovered. With Hong Kong's economy sluggish, if we don't expand overseas, our own profits will be affected. Because we are tightening credit, many clients have turned to HSBC, where they can get the funds they need. In Hong Kong, Standard Chartered Bank's influence is declining."

"I understand. You want to restore Hong Kong people's confidence in Standard Chartered through expansion. After Standard Chartered's privatization, many Hong Kong people did not believe in the bank's strength, especially with the tightening of credit causing panic and leading to a serious loss of customers in Hong Kong. But is this the reason?"

"That's right. If we still don't react at all, we will lose even more customers. After all, after Standard Chartered was privatized, we don't need to show reports to the public, so they don't know the true situation of Standard Chartered. Even if we have made huge profits from the appreciation of the US dollar and the yen, they don't know the details and will still be panicked."

"I understand, but I don't think continuing to expand at this time is a good thing. The loss of customers is only in Hong Kong; there's no problem elsewhere. Although we are now preparing to move Standard Chartered's headquarters to Hong Kong, the UK is also very important. As long as there are no problems in the UK, and as long as Standard Chartered as a whole doesn't run into trouble, the changes in Hong Kong don't need to be taken seriously. The loss of customers in Hong Kong won't have a significant impact on us, at least not in the short term. Tightening monetary policy needs to continue. We can't be careless just because we've made huge profits from the depreciation of the US dollar and the appreciation of the Japanese yen. The crisis is not over. We need to be cautious until the global financial system returns to normal. The impact of the depreciation of the US dollar is not over, and the yen is still appreciating, which forces us to be cautious."

“But wouldn’t it be inappropriate for us to just abandon these customers like this? It would make more people worry about Standard Chartered’s strength, and our continued tightening of credit would also attract the attention of the Hong Kong government!” At this moment, Yuan Tianfan was still somewhat worried about the situation in Hong Kong. Moreover, with HSBC taking action, if Standard Chartered did nothing, it would inevitably cause some unnecessary trouble.

"Let the Hong Kong government think what it wants. We cannot let their dissatisfaction affect us. Currently, the accounts of other Hong Kong companies are all in Standard Chartered Bank. You have no need to worry about the development of Standard Chartered Bank. We do not seek short-term gains, but consider the long-term development of Standard Chartered Bank. In the current uncertain global financial situation, caution is the key. Let HSBC try to take this opportunity to poach our customers. In short, without sufficient collateral, we will resolutely not grant loans. The contraction of lending is unchangeable, and this will not change."

Is losing a few customers in the short term really that important? Not at all. Their departure won't significantly impact Standard Chartered. Standard Chartered currently has ample funds and has profited handsomely from both the depreciation of the US dollar and the appreciation of the Japanese yen. Moreover, the yen's appreciation continues, so Standard Chartered doesn't need to be overly concerned about these changes in Hong Kong. "I think I understand now. Our continued tight monetary policy, while ignoring customer attrition, will demonstrate Standard Chartered's strength to more people and make more Hong Kong residents believe that Standard Chartered is the safest bank."

Upon hearing Yuan Tianfan's words, John was taken aback. He had no such intentions; he simply wanted to tighten his belt to prevent greater losses in next year's financial crisis. However, Yuan Tianfan's understanding made sense. Security was of paramount importance to Hong Kong people, given the repeated banking crises that had instilled a sense of unease and fear. The more Standard Chartered Bank acted against the grain, the more attention it would attract, making Hong Kong people feel safer.

After successfully persuading Yuan Tianfan, John couldn't help but breathe a sigh of relief. Standard Chartered's current financial reserves far exceeded many people's expectations. When John came to Hong Kong, the bigwigs there knew that many were waiting for changes at Standard Chartered, believing that after such a long period of integration, Standard Chartered had fully returned to normal and would no longer tighten monetary policy. Unfortunately, they were wrong; they did not receive any good news from Standard Chartered.

"How could this be? Doesn't Standard Chartered Bank worry about losing a large number of customers and its own interests being affected? Why is it still tightening its monetary policy? With Standard Chartered Bank's strength, it shouldn't be doing this. They have huge reserves of funds, and they have enormous profits to gain from the depreciation of the US dollar and the appreciation of the Japanese yen!"

"Perhaps it is precisely because they have made huge profits from the depreciation of the US dollar and the appreciation of the Japanese yen that they made such a decision. During this period, Standard Chartered Bank itself has made amazing profits from the appreciation of the yen. Naturally, they will not care about losing those customers. After all, those guys are not in a very good situation now and are dispensable to Standard Chartered."

"That's true, but isn't Standard Chartered Bank worried about triggering a banking credibility crisis?"

"Fear? Why should Standard Chartered be afraid? They have ample reserves and can handle any crisis. In fact, such a situation would be an opportunity for Standard Chartered to demonstrate its strength to everyone. They are fearless in the face of any crisis because they have ample reserves."

"What bastards! Can't they even consider the Hong Kong government's interests? Hong Kong's economy is in crisis and needs them to step in and save the market. Standard Chartered Bank is ignoring everything. This is outrageous!" At this moment, the Governor of Hong Kong was furious. Standard Chartered Bank clearly had enough strength, but it was unwilling to take action. How could he not be angry?

"This is perfectly normal. Standard Chartered has concerns because the global financial system is still unstable, and the impact of the dollar's depreciation hasn't subsided. Naturally, they don't dare to loosen monetary policy. HSBC intervened because they wanted to poach Standard Chartered's customers. Most importantly, they are acting as a central bank and must intervene to rescue the market. However, Standard Chartered doesn't have such concerns. They don't concern themselves with their position; they want to protect themselves. This is a perfectly normal choice. We have no reason to ask them to intervene, and even if we did, they wouldn't agree. They have their own plans!"

"Are we just going to do nothing? How can Hong Kong's economy recover if we do nothing? The depreciation of the US dollar has further hampered Hong Kong's economic recovery!"

"We can only wait and see what happens; there's nothing we can do. Moreover, Standard Chartered Bank is still investing in the appreciation of the yen, so they can't possibly accept our proposal. They can make huge profits from the yen's appreciation, but easing monetary policy will not bring any benefits, only risks. Under these circumstances, they are naturally unwilling to accept it and are unwilling to waste their precious funds!"

(End of this chapter)