Chapter Ninety-Five: Journey to Hong Kong

Lu Kun released over two hundred thousand shares of Development Bank onto the black market, bringing in nearly twenty million yuan in total. The timing was tight—Shenzhen Stock Exchange was about to open, and speculation had reached a fever pitch. Lu Kun wanted to withdraw early; whenever the price was right, he would sell off the remaining stocks, leaving nothing behind.

Tomorrow, the Shenzhen Stock Exchange would open its doors. If everything went as expected, the notice to abolish the black market and impose a stamp tax on stock trades would be issued within days.

“Phew—thank goodness I managed to sell everything,” Lu Kun said, panting.

With twenty million yuan at his disposal, many problems that once plagued him now seemed trivial.

“Brother Li, I need to trouble you with something,” Lu Kun said, dialing Li Erfu and speaking politely after the call connected.

Once he had sold all his stocks, Lu Kun checked out of the small hotel he’d been staying at and moved directly into the Nanhai Hotel.

The Nanhai Hotel was the only five-star hotel in Shenzhen at the time, one of the first five-star hotels in China, and renowned alongside the White Swan Hotel in Guangzhou, China Hotel, Dongfang Hotel, Garden Hotel, and Hilton Hotel in Shanghai. They were collectively known as the six hotel giants of China in 1990.

Nanhai Hotel began its trial operations in 1985 and had witnessed the legendary rise of Shenzhen, especially Shekou. Lu Kun was very satisfied with its environment.

The main building, shaped like a giant white sail, stood between mountain and sea, a famous landmark and scenic spot in Shenzhen. Before 1992, all important leaders and foreign guests were received there, a testament to its prestigious status.

“Brother, are you serious? You’re staying at the Nanhai Hotel?” Li Erfu’s hand tightened around the receiver, his voice trembling.

“Brother Li, do you think I’m joking?” Lu Kun laughed.

Did Lu Kun truly have the credentials to stay at the Nanhai Hotel? In reality, he didn’t.

At that time, Nanhai Hotel was not only a place for business but also undertook political tasks. Every suite’s occupant was rigorously vetted. Lu Kun had simply bribed a few managers to secure a “hourly room”—in essence, he borrowed rooms that had been reserved in advance.

He was, in effect, borrowing the tiger’s prestige and waving the grand flag.

After all, Lu Kun had no foundation in Hong Kong. Away from one’s hometown, one’s worth diminishes. Li Erfu didn’t know what connections Lu Kun had back in Angui, but seeing him check into the Nanhai Hotel upon arrival made it clear he wasn’t ordinary.

Yes, only Stone and the brothers Cheng Yuan and Cheng Hao knew about Lu Kun’s stock dealings, and they understood the gravity of the situation, so they wouldn’t spread the word. As for Liu Shixun, he knew Lu Kun had bought stocks, but not the exact amount.

“Hey, Brother Lu, you’re too polite. Leave the exchange for Hong Kong dollars to me,” Li Erfu said, patting his chest and taking on the task.

“Then let me thank you in advance,” Lu Kun replied, laughing heartily.

...

“How...how much do you want to exchange?” Li Erfu almost dropped the receiver in shock.

He had earned tens of millions over the years in the jade and timber business, but net worth and cash flow were two different things. Retail had strong cash flow, but to produce twenty million yuan in cash without disrupting daily operations—that required a massive enterprise.

A retail business able to produce twenty million in cash and continue running would need assets of two or three hundred million at least.

Good heavens, that’s extraordinary.

Whether the twenty million belonged to Lu Kun or was pooled from others, the ability to produce such a sum without batting an eye revealed formidable strength.

“Brother, rest assured—I’ll get it done for you!”

After ending the call, Li Erfu quickly opened his address book and started calling friends and partners, asking them to help gather Hong Kong dollars.

With his plan secured, Lu Kun could finally relax.

At this time, exchanging yuan for Hong Kong dollars was easy for small amounts, but large sums became extremely troublesome. Moreover, unexplained large assets were grounds for suspicion, not just in later years.

In 1990, the official exchange rate favored yuan over Hong Kong dollars, but in practice, it was a different story—anyone exchanging Hong Kong dollars at the mainland rate would be a fool.

The reason lay in the “foreign exchange certificates” issued by the state.

Back in the 1980s, the government began issuing these certificates. In that era, when goods were scarce, foreigners could exchange their currency for these certificates and use them at friendship stores to buy items unavailable for purchase with yuan.

At that time, one hundred Hong Kong dollars could only be exchanged for thirty yuan worth of foreign exchange certificates officially.

Of course, not all foreigners were fools—they often traded directly with locals, bypassing government controls.

The government’s lack of foreign currency, and its urgent need for it, meant reforms were inevitable.

By 1993, the People’s Bank announced a currency reform, abolished the certificates, and the yuan plummeted within a year to eight point four per dollar.

It was also the first year that Hong Kong dollars surpassed yuan in official rates.

On the black market, the exchange rate for Hong Kong dollars against yuan dropped as low as one hundred to one hundred forty.

Evening fell.

Li Erfu sent a special car to the Nanhai Hotel to pick up Lu Kun, Stone, and the brothers Cheng Yuan and Cheng Hao for their trip to Hong Kong.

Stone and the brothers were reluctant to leave the Nanhai Hotel. Such a splendid place, and they’d only stayed half a day—leaving was heartbreaking.

Stone was the first to recover, shooting the brothers a look that said, “Don’t act like you’ve never been out—keep calm.”

In 1990, buying a foreign car on the mainland cost at least twice as much as in Hong Kong, with some luxury imports costing several times more. As for domestic cars, better left unmentioned—making a motorcycle was hard enough. Chinese cars were a patchwork of foreign parts.

In recent years, smuggling mid-to-high end cars in coastal areas had become rampant.

Lu Kun tapped the hood of Li Erfu’s Japanese “Crown,” guessing it was likely a smuggled second-hand vehicle.

“Get in,” Lu Kun tossed his briefcase onto the car and took his seat.

The car moved slowly.

This was to avoid hitting pedestrians.

At the time, bicycles ruled Shenzhen’s streets; during rush hour, the roads were packed with a dense flow of bikes.

PS: Thanks to reader Qi Wangye for the five hundred starting coins!