Chapter 364: Supporting the Chinese Shipbuilding Industry
"Alright, once the valuation comes through, we'll discuss the next steps," said Yang Wendong with a nod.
Valuing a private company wasn't a simple matter, and since there wasn't any urgent pressure, there was no need to rush the process.
Li Zhaoji and Kwok Tak-seng smiled and replied, "Very well. We also hope that once Changxing Real Estate becomes one of our shareholders, we can collaborate on development projects together."
Zheng Zhijie answered with a smile, "No problem. I'd be more than happy to work alongside other professionals in the industry and learn from each other."
Hong Kong real estate developers often preferred to work in collaboration on projects. One reason was risk diversification—putting too much capital into a single project could be disastrous if it failed. Another reason was that consortium-led projects were more attractive to banks when seeking loans. From a lender's perspective, multiple strong backers meant greater financial resilience.
Yang Wendong smiled and said, "Great. Why don't the two of you stay for lunch today?"
Anyone who could go on to become part of Hong Kong's future Four Great Families clearly had exceptional capabilities—regardless of methods. People like that would never work for someone else, which made becoming an investor in their ventures the smartest move.
"An honor," Li Zhaoji and Kwok Tak-seng replied without hesitation.
At this point, Yang Wendong had already surpassed the Ho family in terms of influence, becoming the leading Chinese financial force in Hong Kong. Building a relationship with such a rising titan—and even accepting his investment—would certainly smooth the path for their own ambitions.
Having reached an investment agreement with two of the future Four Great Families—and gaining potential allies in the process—put Yang Wendong in a jubilant mood.
While it was true that Li Zhaoji would eventually spin off his own operations, and Sun Hung Kai would go on to seek more rounds of financing and even go public (which would dilute Yang Wendong's early investment), he would still have ample opportunity to increase his stake in the future.
Even for future business giants like Li Ka-shing and Cheng Yu-tung, if he couldn't invest in them now, he could still jump in once they went public. Outside the Big Four, companies like Hopewell Holdings and Hang Lung Properties were also prime candidates for this strategy.
With just these early-stage financial investments alone, Yang Wendong could solidify Changxing Group as one of the top ten conglomerates in Hong Kong in the future.
October 23rd brought light rain once again. Thanks to the recent drop in temperature and timely rainfall, the drought that had plagued Hong Kong had finally started to ease.
Yang Wendong arrived at the shipyard located in Drunken Bay, Kwai Chung.
Looking at the massive number of busy machines, he asked, "This is our fourth shipyard now, right?"
Zheng Yuhua of Changxing Shipping replied, "Yes. In recent years, Hong Kong's shipping business has boomed. Many Southeast Asian merchant ships now unload their cargo here, which has made our shipyard business very hot."
"Good." Yang Wendong nodded and then said, "You can go ahead and start planning the fifth shipyard. No need to be overly cautious. I predict the shipping market will continue to explode."
During the 1960s, the global economy was growing rapidly, and maritime trade was booming as well. On the one hand, rising labor costs and various domestic constraints were pushing Western countries to offshore their manufacturing to Asia. On the other, Southeast Asia's economic growth was fueling demand for imported goods.
Shipping volumes were surging. By the time the Middle East crisis hit in 1967, the demand would grow exponentially.
Meanwhile, Hong Kong's domestic industrial development was also thriving. The value of industrial exports had already surpassed total trade volume, meaning Hong Kong was no longer merely a trading port—it had become an industrial city.
All of these factors pointed toward a massive expansion in Hong Kong's shipping sector, paving the way for the emergence of the Four Great Shipping Kings, three of whom would rank among the world's top ten.
And as the number of ships increased, so too did the need for shipyards to handle maintenance, inspections, and repairs.
"I was already planning for it," Zheng Yuhua said.
Yang Wendong nodded again. "How's the new shipbuilding project in Japan coming along?"
"All according to plan," replied Zheng Yuhua. "I just visited last month. Some hull structures are already complete, ahead of the contract timeline. At this rate, we'll probably take delivery of the first two tankers by January next year."
"The first two… One's a 120,000-ton oil tanker, the other's a 55,000-ton tanker, right?" Yang Wendong asked. He remembered clearly—this wasn't just any business.
Once these ships were delivered, the annual profits they could generate would likely surpass Changxing Industries and become the number one cash cow in the entire Changxing Group.
"That's right," Zheng Yuhua confirmed. "The rest of the tankers and large bulk carriers will be delivered gradually over the next six months."
"Good. Keep a close eye on the Japanese shipyards," Yang Wendong added. "Besides ensuring these orders are completed on time, we also need to think about the next round of procurement."
Zheng Yuhua was visibly surprised. "Mr. Yang, you're planning to order more large vessels?"
"Yes," Yang Wendong nodded. "But neither Japanese nor Hong Kong banks will likely extend additional credit until our current orders are fulfilled. We'll have to wait until next year, after we've taken delivery of these ships, to start negotiations with the banks and manufacturers again.
That said, we're talking about multi-million-dollar contracts here. We need to start laying the groundwork now. Begin preliminary discussions with the Japanese shipbuilders—we've got the time."
High-value orders like these often required years of negotiation. The current shipping boom made things move faster, but there was still significant preparation involved. Shipyards were flooded with demand, shipowners were eager to profit, and large vessels were relatively standardized. That helped streamline talks, but diligence was still essential.
"Understood. I'll begin reaching out to Japanese shipyards immediately," Zheng Yuhua replied. Then he hesitated and asked, "But Mr. Yang, isn't this a little risky?"
As a professional manager, it was his duty to raise concerns about risk. First, it was part of his responsibilities. Second, if the company faced problems, it would affect him too.
Yang Wendong chuckled. "There's always risk. But in this case, I think it's minimal. Just look—many previously poor countries in Asia are now on the rise. Japan's economy is soaring.
But all these places lack oil—or at least refined gasoline and diesel. East Asia alone holds nearly a third of the global population. Their demand for oil is astronomical. As for global maritime trade, I don't even need to explain that. You know it well."
The 1960s and 70s were truly the golden age of global shipping. Even without the Middle East crisis, the trend would've continued. Rising labor costs in the West forced a relocation of foundational industries, which in turn spurred more maritime trade.
The same went for oil. With the global economy accelerating, every region needed more petroleum.
Then came containerization, which would revolutionize shipping even more.
In theory, the trade volume of the 80s and 90s would be even higher. But the 70s had been too good, causing shipyards to go overboard building vessels. When the oil crisis hit, the market collapsed.
"Alright, if you're confident, then I'm on board," said Zheng Yuhua. Then he added, "There's one more thing. I've been approached by some people from Taiwan. They want us to place shipbuilding orders with them, and they promised a lower price than the Japanese yards."
"Taiwanese shipyards? The one in Keelung?" Yang Wendong asked. "I've heard of that factory—they built a few oil tankers in the past."
When people in his past life thought of Taiwan's shipbuilding, they usually thought of Kaohsiung. But that yard wasn't founded until the 1970s. Before that, the core of Taiwan's shipbuilding industry was in Keelung.
In the early 1950s, with American financial support, Keelung Shipyard began building coastal fishing vessels. Through hard work and perseverance, they trained a massive workforce of skilled welders and eventually moved into ocean-going ships with tonnage in the tens of thousands.
Even the Kaohsiung yard founded in the 70s owed much of its foundation to Keelung. Without that existing industrial base and skilled labor pool, large-scale shipbuilding would've been impossible.
"Yes," Zheng Yuhua replied. "Two years ago, Keelung Shipyard launched a few 10,000-ton tankers. The largest so far is 28,000 tons."
"That's too small for us," Yang Wendong said after thinking. "We don't take on short-distance transport orders."
Not all tankers needed to be massive. For short routes, smaller tankers were more practical. Small countries with limited demand also preferred smaller vessels.
But Changxing Shipping wasn't doing direct operations—it was leasing its fleet to Japanese companies. Japan was far from the Middle East and other oil-producing regions, so they needed large tankers.
"It's not that simple," Zheng Yuhua said. "This time, they're trying to build a 50,000-ton class tanker. But since they don't have experience, most shipping companies are hesitant. They've reached out not just to us, but also to Tung Chao-yung and even Wheelock and Jardine."
"Do they really have the technical capacity?" Yang Wendong asked, unsure.
Taiwan's shipbuilding technology in the 80s and 90s was decent. But in this era, it was still up for debate.
"Based on the quality of the ships they've built so far, Keelung's workmanship is on par with the Japanese," Zheng Yuhua explained. "Many global repair yards have confirmed that.
However, they've never attempted anything above 50,000 tons. And while the hull may look similar, scaling up requires completely different design specifications and material standards."
"Can they produce the materials themselves?" Yang Wendong asked again.
"No, they import everything from Japan. All they do is assemble and weld," said Zheng Yuhua. "But that welding is quite sophisticated."
"They've worked hard," Yang Wendong said with a smile. "Breaking through step by step."
"They're doing the same as us in Hong Kong—trying to grow despite limitations," Zheng Yuhua added. "Unfortunately, we don't have the space in Hong Kong to develop a shipbuilding industry."
"Yeah, it's a shame." Yang Wendong thought for a moment and said, "Well, since they need a breakthrough, maybe we can give them a chance. Conduct a thorough investigation. If the quality and price are acceptable—and cheaper than the Japanese—let's give them one order to test the waters."
Yang Wendong wasn't entirely sure about the historical development of Taiwan's shipbuilding, but he knew it did well in the future. That was reason enough to give them a shot now.
In fact, any latecomer aiming to enter the heavy industry space—planes, ships, cars—faced immense early hurdles. What they needed most was a breakthrough client. Early on, Japan, South Korea, Taiwan, and even future mainland China would face the same challenges.
Of course, this move had strategic benefits too. A shipbuilding order, especially the first of its kind, was incredibly valuable. With it, Yang Wendong would have leverage in future negotiations with Taiwan's government on other matters.
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