Chapter 234: Purchasing a 10,000-Ton Cargo Ship
"Invest in Global Shipping?" Pao Yue-kong looked genuinely surprised. "Why? Mr. Yang, you've got the capital—you could just invest more into your own shipping company. Wouldn't it be better to buy another ship?"
Yang Wendong replied calmly, "I'm investing in shipping because I believe in the future of the market. But if I want to invest in Global Shipping, it's because I believe in you, Mr. Pao. I think, with your management style and foresight, you're destined to become a shipping king someday."
"Thank you for the compliment." Pao smiled modestly, though it was clear he appreciated the words. "But since you like my model, why not just follow it yourself?"
Yang shook his head. "I only understand the surface. I may admire what you've done, but replicating it is something else entirely. There are countless success stories and business case studies out there—how many people have actually been able to replicate those models successfully?"
"Take supermarkets, for example," he continued. "There's nothing particularly technical about them, and lots of regular workers dream about opening their own little grocery store when they retire. But how many actually succeed? In a fiercely competitive industry, only a few names stand out—Walmart, Auchan, Costco. When the market was hot, so many competitors tried to imitate them, even hiring their staff, trying to replicate their business models. But almost all of them failed."
"There are too many factors behind success," Yang said. "The long-term lease model is a big part of your success, sure, but trying to reach your level by copying it would be nearly impossible."
Pao chuckled. "Mr. Yang, you give me too much credit. I'm honored that you want to invest. But truthfully, I'm not currently planning to bring in outside investors."
Yang didn't seem disappointed. Instead, he smiled and said, "Mr. Pao, I don't expect a yes right away. My ask isn't huge—just a 10% stake. The valuation is up for negotiation."
Pao paused, thinking it over. "Let me give it some thought, Mr. Yang."
"Of course," Yang replied. He didn't expect success in a single conversation. After all, Pao's business was doing quite well at the moment—unlike when Walmart had hit a rough patch, giving Yang the opportunity to invest back then.
Pao added, "Well, we've already made some good progress today. Let's call it a day."
"I look forward to many future collaborations," Yang said with a nod.
The two men exchanged a few more pleasantries before parting ways.
After leaving the Peninsula Hotel, Yang went straight to the Geely Building. Naturally, he was there to see Zheng Yuhua, since everything related to Pao Yue-kong fell under the domain of the shipping company.
"Mr. Yang," Zheng greeted him personally at the elevator, having been notified of his arrival.
Yang nodded and said, "There's something I want to discuss. Let's go to the conference room."
"Certainly," Zheng replied, bringing along her assistant.
Once inside, Yang shared the two topics Pao had brought up: the shipyard collaboration and the idea of founding a maritime academy.
After listening, Zheng said, "No problem with the shipyard collaboration. Locking down a major client early is a win for us. Offering a discount is standard. As for the maritime academy, that's actually quite visionary. There are so many shipping companies in Hong Kong, and yet no one has thought to train their own talent. Everyone just recruits from other companies."
Yang nodded. "Exactly. I didn't think of it either. Pao is forward-thinking. Going forward, I want you to keep track of his public moves—nothing private, but anything related to his business decisions in shipping."
Though he knew the major event in 1967—the Middle East crisis—was going to open a huge window of opportunity, he didn't have specifics for the years in between. He knew shipping would be lucrative, but not how to maximize profits within that.
By tracking the decisions of a future shipping magnate like Pao, Yang hoped to glean valuable strategic insights.
"Understood," Zheng replied.
Yang asked, "How's the progress with the new ship purchase from Japan?"
"I visited Japan recently and spoke with several shipyards," Zheng said. "Generally, their cargo ships fall into two categories: standard models, which are cheaper and faster to build and meet international regulations, and custom-built ships, which depend on the buyer's specifications. Those take longer due to design and validation requirements."
"How long does it take to build a standard model?" Yang asked.
"Usually about a year. Some yards can do it in ten months."
"Do you have detailed documentation?" he asked.
"We've already prepared it," Zheng replied. Her assistant then handed over a brochure.
"A Chinese version? Those Japanese shipyards are really going all out," Yang said with a grin after glancing at the cover.
Zheng added, "Hong Kong shipowners are some of their biggest clients. Even British-owned shipping firms have stopped ordering from the UK and Europe, preferring Japan's more affordable options."
Rather than diving into the document immediately, Yang asked, "Since European and American shipyards charge more, do they have any advantages left?"
Zheng nodded. "Quite a few, actually. Japan is cheaper because of lower labor costs, and the workers are incredibly hardworking. Delivery times are short. But in terms of shipbuilding technology, especially for large oil tankers and container ships or other specialized vessels, Japan still lags behind the West. Their experience and engineering aren't quite there yet."
"Makes sense," Yang said, nodding.
It was natural. Developing heavy industry expertise took time. Even in his previous life, China needed years to rise to the top. Japan, at this stage, was still in its development phase.
"Mr. Yang," Zheng asked, "Are you thinking of checking out shipyards in the West?"
"No, just asking," Yang shook his head.
He might need high-tech Western shipbuilding down the line, but not right now. He definitely wouldn't be building ships in the West at this stage.
"For standard cargo ships used in Hong Kong," Zheng said with a smile, "Japanese models are the most cost-effective—unless you're planning to order some highly specialized vessel."
"Normal cargo ships are fine," Yang replied, flipping through the brochure.
Zheng added, "Let me walk you through the highlights. These brochures aren't very detailed—limited by page space."
"Sure," Yang agreed. Technical jargon was a headache to read.
Over the next ten minutes or so, Zheng gave a rundown of several ship models from different Japanese manufacturers.
She concluded, "Internally, we favor this new DC267 bulk cargo model from Mitsubishi. It's a 15,000-ton class ship and uses their latest technology. The previous generation was known for its reliability and fuel efficiency. This one's even better. Plus, it's got an incredibly smart layout—lots of cargo space, and a flat upper deck. If needed, we could retrofit it into a container ship easily."
"Fuel-efficient?" Yang asked.
"About 5% more efficient than the last generation," Zheng said. "That may not sound like much, but over time, it adds up to hundreds of thousands of dollars saved per year."
She continued, "More importantly, better fuel efficiency means extended range and reduced load weight."
"Sounds great," Yang replied, glancing at the price. "But it's expensive—$1.8 million per ship."
Zheng nodded. "Not cheap, no. But that's just how cargo ship prices are. If you wanted something similar from a European or American yard, you'd be looking at $2 to $2.5 million."
"And the sales manager at Mitsubishi Shipbuilding also mentioned that if we order in bulk, there's room for a discount."
"Order in bulk?" Yang Wendong chuckled. "If I do buy a large number, would I be able to lease them out?"
Although his own factories required a decent amount of shipping capacity, their products were lightweight and the routes were fixed—perfectly manageable with older vessels. Using brand-new ships for such tasks would be overkill and a waste of value. The biggest advantage of new vessels was their flexibility and stability, making them more suited for national or large corporate contracts. In that case, leasing them out would be the most cost-effective strategy.
Zheng Yuhua nodded. "The shipping market is constantly evolving. Based on current trends, I believe there'll be a shortage of cargo ships over the next three years. Global trade is accelerating, especially with the United States pushing hard for globalization. Even the British are slowly being forced to ease their grip. Once that opens up further, demand for ships will skyrocket."
"Alright then. Sounds like it's worth buying more." Yang nodded.
Until 1967, the more ships he could get his hands on, the better. But he still had to ensure they would all be fully utilized. Ideally, the vessels would pay for themselves within the first few years—just standard practice in the shipping industry.
Zheng added, "Mitsubishi also said their partner bank can offer us loans, but with a few conditions. They'll only finance up to 50% of the ship's cost and require us to sign a special agreement. If we default, they reserve the right to seize our vessels anywhere in the world. Other banks would be considered secondary creditors."
"Fifty percent is fine. HSBC already agreed to back me." Yang smiled. "No wonder Hong Kong banks won't get into shipping finance. If Japanese banks have this kind of legal leverage, Hong Kong banks can't compete—there's nothing for them to seize."
Zheng agreed. "Exactly. Even if we mortgage the ship to a Hong Kong bank, not even HSBC can enforce seizure rights overseas. Hong Kong may have British backing, but at the end of the day, it's still just a city. It's no match for Japan on the international stage."
"Have others signed these kinds of agreements?" Yang asked.
"Pretty much everyone," Zheng replied. "Unless they're not borrowing from Japanese banks."
"Then we'll go ahead and do the same." Yang nodded. Even if this clause didn't exist, he'd never walk away from a loan default without taking responsibility. To do so would destroy his business reputation.
"Great. Then we can move forward with discussing the purchase," Zheng said.
"Start preparing a trip to Japan," Yang instructed. "I need to see the ships myself."
"I'll arrange everything," Zheng agreed.
—
A few days later, at the Yang family villa:
Yang Wendong entered the bedroom and found Su Yiyi playing with their baby. She was using two fingers to let the baby grab on, and had sat up, laughing with delight as their son gripped them tightly.
"Can't bear to leave him, huh?" Yang said with a smile, reaching out with his own hand to let the child choose between their fingers.
Su Yiyi nodded. "Yeah, it's hard."
"It's only a few days," Yang reassured her. "There are plenty of people here to help. Besides, we're lucky we have a choice. Most regular folks can't even be with their kids every day."
The trip to Japan would include Su Yiyi, but after some discussion, they'd decided not to bring the child. He was still too young. Even with plenty of caregivers, the risk of illness in a new environment was too high.
"Mm." Su nodded in agreement.
—
October 20th
Yang Wendong, Su Yiyi, Zheng Yuhua, and over a dozen technical staff from Changxing Shipping chartered a private plane to Osaka, Japan, to visit Mitsubishi's shipyard.
Japan was geographically close to Hong Kong, so after landing, the entire group headed straight to the yard to inspect a nearly completed DC267 cargo ship—the very model Zheng had initially recommended.
Yang and Su mostly looked at the ship's exterior and reviewed technical documents, while the engineers dove deep into detailed assessments. Their work would take days.
In the meantime, Yang and Su headed into central Osaka after a preliminary discussion with the shipyard representatives.
"Brother Dong, there are so many Chinese characters here," Su Yiyi remarked as they walked the streets. "Even though I don't speak Japanese, I can more or less understand what each store sells."
"That's normal," Yang replied with a smile. "Japanese culture, historically, came from China—same with Korea."
In Yang's previous life, both Japan and South Korea had begun phasing out Chinese characters over several decades. But in this era, kanji and hanja were still commonly used in both countries. While pronunciation differed, the meanings were often guessable from the characters.
"That looks like a big clothing store. Let's check it out," Su said, pointing.
"Sure." Yang nodded. Their visit to the city wasn't just for leisure.
He wanted to see firsthand how Japanese fashion retailers and large shopping centers operated. Hong Kong's economic trajectory would soon mirror Japan's in many ways.
Even though he was the boss and had specialists under him, Yang believed he still needed firsthand understanding—especially since the retail model that worked decades later might not suit the current market. Learning from Japan's experience could help him bridge that gap.
—
During their stay in Osaka, Zheng and the technical team visited multiple shipyards, gaining insights into various technological innovations.
October 26th
At a hotel in Osaka, Zheng reported to Yang and Su: "Mr. Yang, internally we still favor Mitsubishi's DC267 cargo ship. In terms of price, fuel efficiency, and build quality, it offers the best value."
"Alright, then start the next round of negotiations—focus on pricing and delivery timelines," Yang instructed. "But don't forget the other shipbuilders. Keep them in the loop to pressure the pricing."
"Understood. We'll stay in contact with the other manufacturers too," Zheng said. "But to be honest, Japanese shipbuilders tend to have an unspoken agreement. Unless one of them is aggressively trying to take market share from the West, they tend to keep prices aligned."
"That's just how business works," Yang chuckled. "If you can monopolize, why wouldn't you? Monopoly is the highest form of capitalism."
At that moment, the hotel doorbell rang.
"That must be Mr. Shigenobu Fukada, the deputy general manager at Mitsubishi Shipbuilding," Zheng said.
"Open it," Yang nodded. He'd met the man before—he was in charge of international sales at Mitsubishi.
Zheng opened the door and in walked a man in his fifties. He bowed respectfully to Yang. "Good day, Mr. Yang."
"Please, have a seat," Yang replied.
Japanese shipyards treated Hong Kong clients as major customers. Many of their sales staff were fluent in Chinese. At that time, Japan hadn't yet eliminated Chinese characters from daily use, which made learning Chinese relatively easy for them.
"Thank you," Fukada said, bowing again before taking his seat.
"Mr. Yang, thank you very much for your trust in our company," he began. "I came today in hopes of better understanding your needs as a client."
"Perfect," Yang nodded. "We also have some questions we'd like to go over with you."
The two sides then spent about thirty minutes discussing technical specs, pricing, and loan arrangements through Japanese domestic banks—many of which were closely tied to the shipyards themselves.
Finally, Fukada asked, "Mr. Yang, may I ask how many ships you are planning to purchase this time?"
Yang raised his right hand and said calmly, "Five ships."
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