Chapter 606
Retreat, Retreat
In Central, Hong Kong, white-collar workers and tourists mingle on the streets, some hurrying along while others pause to look around – a scene that perfectly reflects Hong Kong's economic development.
Starting in 1985, Hong Kong's GDP grew at an annual rate of 10%, and its rapid economic development made it the leader of the "Four Asian Tigers" with an unparalleled momentum.
Last year, its per capita GDP exceeded HK$9, reaching HK$9.5, further approaching that of the UK. Of course, this was due to the appreciation of the pound sterling; otherwise, it would have already surpassed the UK's per capita GDP.
Such a thriving economic system naturally leads to Hong Kong people always being very "rushed," as evidenced by the brisk pace of office workers in Central.
On the other hand, according to the latest survey, more than 60% of the office space leased by CK Asset Holdings Limited is occupied by overseas companies, while more than 70% of the office space leased by Hongkong Land Limited is occupied by overseas companies.
This demonstrates that Hong Kong has become an international metropolis.
In 1988, the number of tourists visiting Hong Kong reached over 1800 million annually, more than three times the number of local residents. These tourists, besides enjoying the cheap goods (virtually tax-free), naturally also appreciated Hong Kong's local culture—skyscrapers, entertainment, and anime/games.
Hong Kong boasts numerous landmark buildings, and at least three of them could be ranked among the world's best buildings of the 20th century: the Ping An Bank Tower, the HSBC Tower, and the Benda Centre.
In addition, the Shangri-La Hotel Tower, built in the 1970s, has always been a favorite among tourists, who often take photos of it from cruise ships in Victoria Harbour. Its unique sailboat shape has had a significant impact.
Ping An Bank Building (Freedom Tower).
This place has become a must-visit spot for overseas tourists visiting Hong Kong, and the symbol of the 'Freedom Tower' has spread far and wide to Europe and America. The spirit of the free trade port has forged the legend of Hong Kong today.
Generally speaking, places that international businessmen like to invest in must meet two basic conditions: first, political stability; second, freedom or convenience in the movement of money.
Both are indispensable!
As a Rolls-Royce drove into the underground parking garage of Ping An Bank, building security guards were already directing traffic, and tourists couldn't help but press the shutter button because the Rolls-Royce's license plate was a '9'.
Who is this?
"Seems pretty impressive."
The tourists started discussing it.
A tour guide glanced enviously at the Rolls-Royce that drove in, then said with a hint of pride, "This is Sir Chan Kwong-leung, Hong Kong's richest man. His car is a custom-made Rolls-Royce with the license plate number 9, which represents 'the supreme ruler'."
"I know that Sir Chen Guangliang is also the world's shipping magnate and the richest Chinese person!"
"So it was him. I've heard of him too."
The tour guide said with a smile, "The world's richest person is someone else."
Tourist: "How is that possible? The world's richest man is clearly Yoshiaki Tsutsumi from Japan, whose net worth has reached 200 billion US dollars!"
The tour guide shrugged and said, "Perhaps! But Sir Chan Kwong-leung's family alone has a Cheung Kong Holdings, whose market value reached a peak of US$13 billion in April. The family holds about 50% of the shares (the other 25% is held by the Chan Kwong-leung Foundation), which is equivalent to US$65 billion. And the Chan family has four major conglomerates, plus a media group. It's just that the others are basically not listed, so they can't be counted."
Everyone exclaimed in surprise, "So that's how it is!"
In the minds of Hong Kong people, the largest enterprise in Hong Kong has never been 'CK Asset Holdings' or 'HSBC', but 'CK Industries', which has nearly 200,000 employees worldwide and accounts for about 20% of Hong Kong's industrial output.
In fact.
In terms of market capitalization, CK Asset Holdings did indeed rank first last year, with a market value of over US$10 billion (market capitalization is far lower than asset value). A large part of the reason for this is that CK Asset Holdings has a large number of investments in Japan, and with the appreciation of the yen and yen-denominated assets, CK Asset Holdings' market capitalization has also increased significantly.
The second-largest company by market capitalization is not HSBC, but Hong Kong Telecom, formed by the merger of Hong Kong Cable & Wireless and Hong Kong Telephone Corporation. It has a market capitalization of approximately US$75 billion, ranking around 220th globally.
HSBC is the third.
In fact, the size of the Worldwide Group and Cheung Kong Industrial Group is still much larger than that of HSBC.
Therefore, Hong Kong people generally believe that the Chan family might be able to compete with the world's richest family. As for Chan Kwong-leung's division of the family business, Hong Kong media have also reported that the division is not completely separate. The shares of each company are still held in "Chan Kwong-leung and his son's company", with Chan Kwong-leung himself still holding half of the equity. The shares will only go to his son or grandson after his death.
As a result, Hong Kong media still regard Chen Guangliang as the 'richest Chinese man'.
The Chen Guangliang family office is located on the 70th floor of the Ping An Bank Building.
At this moment, Chen Guangliang's office welcomed the fourth son of his eldest son, and the five of them sat down at the conference table.
How is the cash-out process progressing in Japan?
This is a very crucial question.
Daifusa has assets worth tens of billions of US dollars in Japan, and has begun an orderly withdrawal from the market since the beginning of this year (1989).
Chen Wenjie began by saying, "As of today (mid-June), CK Asset Holdings has cashed out US$18.2 billion in assets, including a commercial building in Ginza. In the next year, we will accelerate the cash-out process. Except for the Shangri-La Hotel, which we will not deal with, all other assets can be cashed out."
Cheung Kong Holdings has been investing in Japan for forty years and was one of the earliest investors in Ginza. Its real estate and securities assets in Japan have exceeded US$80 billion, not including assets such as Nissin Ramen.
Chen Guangliang nodded. His goal for his children was to cash out in 1989-1990.
He knew that even though the Nikkei index peaked at the end of 1989, Japanese real estate was still experiencing a 'last frenzy' in 1990. Of course, even if some couldn't be withdrawn in time, it was still a good long-term investment.
Chen Wenming also said, "Regarding Global Real Estate's cash-out situation in Japan, we sold several properties in the Chuo Ward, totaling US$5.8 million. As for securities, we have formulated a cash-out strategy, which will officially begin in July, and we expect to cash out around US$5 million."
Universal Realty's property investments in Japan are valued at just over US$2 billion. The initial investment was less than US$300 million, during which time Japanese real estate values increased three to four times, and the yen appreciated by nearly 100%. However, Universal Group also invested in securities, which were also quite valuable, bringing its total assets to US$25 billion.
This isn't much, considering that Chen Guangliang's shipping business has been operating in Japan for forty years, and he enjoys converting the cash from his global shipping operations into Japanese yen and investing in yen assets.
Finally, Chen Wensheng said, "Ping An Investment's securities holdings in Japan have a market value of over US$15 billion, which was also officially cashed out in July, and was completely cleared out over a period of six months."
Ping An Investment has investments not only in Japan, but also in securities, bonds, and government bonds in the United States and the United Kingdom.
"Okay, we will withdraw from the Japanese market in an orderly manner. This time, the Japanese economic bubble is really too big."
Chen Wensheng immediately asked, "Father, now that we've completely withdrawn from Japan, where should we redirect our funds?"
Chen Guangliang said, "Let's stabilize first. The UK's economic cycle has peaked; it's not a good time to invest in securities and real estate. As for the US, now is not the time to increase our stake."
Thatcher will step down next year, and the British economy will be lucky to survive until the end of the year.
As for the United States, it will also face a short-term oil crisis following Iraq's invasion of Kuwait next August, which will affect its economy.
Chen Guangliang only needed to grasp the general direction; that would be enough to benefit his children immensely. "I understand."
"In addition, if the exchange rate of US dollar to Japanese yen exceeds 145, first exchange the cash in Japanese yen, and do not do so based on exchanging for US dollars."
Yes, Father.
This wave of generous withdrawal of billions of US dollars from Japan is expected to continue until the second half of 1990.
The yen exchange rate during this period is expected to be between 130 and 160, but the yen will definitely appreciate again and continue to decline to the 120-130 range.
As for investment, wait for the Gulf War to cause an oil crisis, which in turn will affect the global economy, and then buy at the bottom.
Of course, these are all strategies for large-scale investments. Small-scale investments have always continued, but Chen Guangliang rarely manages to manage so many.
For example, Chen Wenjie likes to use 'private funds' to invest in 'land' in regions such as Australia, New Zealand, and Canada, while Chen Wenkai likes to use liquid funds to invest in long-term equity in technology stocks and in the mining industry, etc.
These investments are all made through private trust funds, and over time, they accumulate to form a global investment strategy. Today, the Chen family's investments span more than fifty countries worldwide and continue to grow.
At last.
Chen Guangliang said, "The current situation on the mainland has led to a new wave of emigration to Hong Kong. I estimate that more than 2 people will emigrate every year. But no matter what, Hong Kong's economic prospects are still very good, and our Chen family must have a firm determination. Moreover, we are not participants, but creators, and we must play the role of protagonists. In addition, we must still have confidence in the mainland. I believe that reform and opening up is unstoppable, and this is just a temporary adjustment."
Yes, Father.
Everyone felt reassured and instantly stopped being confused about the recent issues.
The events in mainland China have led to the US blocking the delivery of AsiaSat 1, followed by another round of lobbying.
Two cars drove into the 'Times Cinema' in Clearwater Bay and then stopped in front of the 'Asia Television' administration building, where ATV had sent a senior executive, Shi Nansheng, to wait and greet them.
"Mr. Noble, welcome to the headquarters of Asia Television!"
Howard Noble, a senior executive in programming at Fox News, stretched out his hand, looked around, and replied, "Ms. Shi, I've heard this is the Hollywood and Burbank of Asia. I'd love to take a look around."
"Now?"
"certainly"
Shi Nansheng immediately smiled and said, "Please, I'll be your guide."
The Times Studios now serves as the headquarters for both Asia Television and Times Films, and includes two administration buildings, six large photography centers, an antique-style building complex, a five-star hotel, and more.
Since arriving in Hong Kong in the 1930s, Era Films has been a stronghold of Chinese cinema, and since the 1950s, it has become the 'Hollywood of Asia,' with Era Films being the most representative example.
Since 1988, Asia Television's viewership ratings have completely caught up with TVB's, and this year it has even surpassed TVB to become the leading television station in Hong Kong.
The reason Fox News came to Hong Kong this time was to purchase the rights to "Who Wants to Be a Millionaire".
After Howard Noble and his delegation visited Times Cinema, they praised Hong Kong's entertainment industry and television stations, which strengthened their determination to purchase the rights to "Who Wants to Be a Millionaire".
Upon arriving at the conference room, Zhou Liang Shuyi and Shi Nansheng, representing Asia Television, formed a "women's group." They showed no fear of negotiation and displayed great confidence.
"Mr. Noble, since its premiere in 1987, 'Who Wants to Be a Millionaire' has been Hong Kong's most lucrative program, averaging HK$80 in advertising revenue per episode. Therefore, the success of 'Who Wants to Be a Millionaire' isn't just about its high ratings, but also its earning power. We've conducted research, and in the US market, this program not only helps your station achieve the top ratings in its time slot, but also allows each episode's advertising revenue to exceed US$100 million," Shi Nansheng said confidently.
In recent years, she was invited by Chen Mengyi to serve as the head of external business for Asia Television, with her most important task being program output. Furthermore, she is also one of the heads of external business for Times Pictures, enjoying the deep trust of her boss, Chen Mengyi.
Noble laughed and said, "These are just your judgments; we are not so optimistic. So your asking price of $3500 million for the copyright is outrageous. We are only willing to offer $2000 million!"
This price was naturally unacceptable. Shi Nansheng had received a firm demand from his boss: the copyright fee sold to the Americans must not be low.
She said, "If the competition between Fox and the other two stations is only worth $2000 million in principal, I have nothing to say. But our price cannot be lower than $3000 million. By the way, there are also stations in the UK and some other countries in contact. If you are not willing to offer a higher price, then you may as well wait a few years."
Noble hadn't expected the other party to be so resolute. After all, a small place like Hong Kong could export programs to the United States. Shouldn't it be proud and honorable that the price didn't matter?
However, to be fair, this time he really was determined to buy the copyright.
"I need to think about it."
"Yes, we've arranged a hotel."
One day later.
Oriental Daily News published a shocking news story: Asia Television sold the rights to "Who Wants to Be a Millionaire" to Fox News in the United States. The US side was required to pay a copyright fee of US$3050 million, while Hong Kong sent a professional team to the United States to provide guidance.
The news sent shockwaves through Hong Kong and Kowloon.
"Wow, that's amazing! The copyright fee for 'Who Wants to Be a Millionaire' sold for over HK$2 million. That's ATV's entire revenue for last year!"
"That's right, TVB made about the same amount last year. Now, they're selling the rights to a single program for an astronomical price, my goodness."
"More than that! I've heard that TV stations in many countries and regions are negotiating the rights to 'Who Wants to Be a Millionaire'. This program will probably become a goldmine, just like Hong Kong comics and games!"
"Amazing!"
"And another thing! ATV's 'The Voice of Hong Kong' has consistently high ratings this year, becoming a very popular program in Hong Kong. That's a great copyright!"
The Voice of Hong Kong started its first season in 1989, attracting music lovers from Hong Kong and overseas Chinese communities, and becoming one of the representative programs of 'reality shows'.
In other words, Asia Television has had four new programs in recent years: "Who Wants to Be a Millionaire", "The Voice of Hong Kong", "Produce 101", and "Music Bank". These are the key contributors to Asia Television's ratings surpassing TVB.
In terms of TV dramas, it has also produced excellent series such as "Justice Bao" and "The Legend of the White Snake", which are in no way inferior to TVB.
Finally, regarding singers, with the debut of numerous idol groups and the influx of singers poached from TVB, ATV is now on par with TVB.
In three major sectors, Asia Television has firmly surpassed TVB in viewership ratings.
It's obvious to anyone with eyes to see that Asia Television is pursuing 'innovation,' collaborating with Era Pictures and Era Entertainment, subsidiaries of the 'Media Group,' to create a new entertainment culture. (End of Chapter)