Sir Yue-Kong Pao
CBE JP (; 10 November 1918 — 23 September 1991), was the founder of Hong Kong's
Worldwide Shipping Group, which at one point was the largest shipping company in the world. Anticipating the seriousness of the shipping downturn starting in the late 1970s, he diversified his interests, notably through the purchase of a controlling stake in
The Hong Kong and Kowloon Wharf and Godown Company and later Wheelock Marden, giving exposure to Hong Kong real estate, retail, and transportation.
He was noted for his unmatched access to leaders in both the commercial and political arenas and was equally at ease with Western political leaders and the Chinese leadership in the run-up to
Hong Kong's handover to China on 1 July 1997. He was also a philanthropist, notably in educational projects, helping set up universities, libraries, and scholarships.
Early life
Pao was born in 1918 in
Ningbo
Ningbo is a sub-provincial city in northeastern Zhejiang province, People's Republic of China. It comprises six urban districts, two satellite county-level cities, and two rural counties, including several islands in Hangzhou Bay and the Eas ...
, the third of seven children of an upper-middle-class family. He was a 29th-generation descendant of
Bao Zheng
Bao Zheng (; 5 March 999 – 3 July 1062), commonly known as Bao Gong (), was a Chinese politician during the reign of Emperor Emperor Renzong of Song, Renzong in China's Song Dynasty. During his twenty-five years in civil service, Bao was kn ...
. In 1931, he went to
Hankou to work in his father's shoe manufacturing business whilst continuing his education at night. However, he decided that the shoe business did not suit him and he secured a traineeship with a foreign insurance company. By the age of twenty, he was established in his new position and married his wife Huang Sue-Ing, who was chosen by his parents.
In 1937, Hankou came under attack from the Japanese, and Pao along with 70 colleagues moved to
Hunan
Hunan is an inland Provinces of China, province in Central China. Located in the middle reaches of the Yangtze watershed, it borders the Administrative divisions of China, province-level divisions of Hubei to the north, Jiangxi to the east, Gu ...
and then Shanghai whilst leaving his wife in the relative safety of Ningbo. As tension eased, he sent for his wife to join him.
Career
In the late 1930s in Shanghai, Pao found a position in the insurance department of the Central Trust of China. Pao was soon moving up the corporate ladder, moving into the area of banking, and moving to
Hengyang
Hengyang (; ) is the second largest city of Hunan Province, China. It straddles the Xiang River about south of the provincial capital of Changsha. As of the 2020 Chinese census, Its total population was 6,645,243 inhabitants, of whom 1,290,71 ...
and
Chongqing
ChongqingPostal Romanization, Previously romanized as Chungking ();. is a direct-administered municipality in Southwestern China. Chongqing is one of the four direct-administered municipalities under the State Council of the People's Republi ...
as the progress of the war dictated.
In 1945, at the end of the war, he was sent by the Government back to Shanghai to help set up and manage the new Municipal Bank and in a short time had worked his way to Deputy general manager, effectively in charge.
Move to Hong Kong
With the approaching fall of the "
Bamboo Curtain", Pao and all his family had moved to Hong Kong by the spring of 1949, having managed to remit much of the family's assets and money before events made it impossible. It was impossible to resume a banking career and, given the prevailing uncertainties, he did not wish to commit to investing in machinery and land in Hong Kong, so Pao started an Import/Export business dealing in Chinese goods. Following the UN trade embargo resulting from China's entry into the
Korean War
The Korean War (25 June 1950 – 27 July 1953) was an armed conflict on the Korean Peninsula fought between North Korea (Democratic People's Republic of Korea; DPRK) and South Korea (Republic of Korea; ROK) and their allies. North Korea was s ...
, the company broadened its scope to Europe, although trade with China continued in a circuitous way through skilful exploitation of legal loopholes in the embargo. It was during the first half of the 1950s that Pao first made contact with
Jake Saunders (who was running the Imports Department) and
Guy Sayer (also working in the department) at
the Hongkong and Shanghai Banking Corporation. Both were later to become Chief Manager and chairman of the bank, and the relationship was to be a decisive element in the growth of Pao's businesses.
Founding of World-Wide Shipping
As his business grew, Pao looked around for suitable new ventures and in 1955 decided to branch into shipping (still focusing on assets that were not fixed in Hong Kong) and embarked on an intensive learning process. Shipowning in Hong Kong had a poor reputation at that time with the banks and so the first vessel, a 28-year-old coal burning 8,200 tonne freighter, was purchased without finance. Having seen this and the rigorousness employed by Pao in the purchase process, the Hongkong Bank extended a loan for the second purchase, the start of long and fruitful relationship which led to Pao being appointed to the board of the bank in 1971 and later to become its vice-chairman.
The shipping business grew rapidly driven by the post war economic miracle taking place in Japan and the resulting need for freight and oil carrying capacity. Pao devised a system whereby he was able to secure bank guaranteed three-year charters prior to purchasing ships thus significantly reducing the business risks and creating a very attractive lending opportunity for the banks financing the ship purchase. This basic scheme (known in Japan as a "shikumisen" arrangement) was extended when World-Wide moved into commissioning construction of new ships in 1961.
By 1979, the fleet was some 202 vessels with a total of , by far and away the largest fleet in the world. Indeed, the fleet was larger than the combined fleets of the famous
Onassis,
Niarchos and Lemos families. In recognition of his achievements Pao was made an Honorary Doctor of Law by the
Hong Kong University
The University of Hong Kong (HKU) is a public research university in Pokfulam, Hong Kong. It was founded in 1887 as the Hong Kong College of Medicine for Chinese by the London Missionary Society and formally established as the University of ...
in 1975, and in 1976 appeared on the front cover of
Newsweek
''Newsweek'' is an American weekly news magazine based in New York City. Founded as a weekly print magazine in 1933, it was widely distributed during the 20th century and has had many notable editors-in-chief. It is currently co-owned by Dev P ...
magazine with the heading "King of the Sea". Pao received the Golden Plate Award of the
American Academy of Achievement
The American Academy of Achievement, colloquially known as the Academy of Achievement, is a nonprofit educational organization that recognizes some of the highest-achieving people in diverse fields and gives them the opportunity to meet one ano ...
in 1977. He was
knight
A knight is a person granted an honorary title of a knighthood by a head of state (including the pope) or representative for service to the monarch, the church, or the country, especially in a military capacity.
The concept of a knighthood ...
ed in 1978.
Diversification
1978 saw the start of a severe downturn in the shipping business. Pao and his managers were quick to spot the problem and commenced a programme to reduce the fleet, especially crude oil carriers, selling ships as they came off charter. 140 ships were sold and the fleet reduced by half over a period of 4 to 5 years allowing debt to be paid off and cash resources built up. Although this was a difficult time for World-Wide, the company, through early action and conservative financial management, was able to ride the recession with little of the problems seen elsewhere in the industry.
In the mid-1970s Pao had bought from
Li Ka-shing
Sir Ka-shing Li (; born 29 July 1928) is a Hong Kong billionaire business magnate, investor, and philanthropist. He is the senior advisor for CK Hutchison Holdings and CK Asset Holdings, after he retired from the Chairman of the Board in May ...
a 10% holding in the Hong Kong and Kowloon Wharf and Godown Co. Ltd. (now
The Wharf (Holdings)) and by 1977 had built this to 30%. Wharf had historically been in the
Jardine Matheson
Jardine Matheson Holdings Limited (also known as Jardines) is a Hong Kong–based, Bermuda-domiciled British multinational conglomerate. It has a primary listing on the London Stock Exchange and secondary listings on the Singapore Exchange ...
sphere of influence. Friction with the Jardine camp broke out in the late 1970s over board appointments which concluded with the Pao camp being allowed two more directorships (making 4 out of a total 12). Hostilities broke out again in June 1980 with Jardines launching a cash and shares bid for Wharf. Although in Europe at the time, Pao and his team were able rapidly to put together a successful cash tender for shares to take his holding to 49% and securing control of Wharf. Pao then took over the roles of chairman and Chief Executive. Wharf gave World-Wide exposure to prime Kowloon waterfront property as well as ownership of Hong Kong Tramway and the Star Ferry.
In 1985, Pao was able to take control of Wheelock Marden, one of Hong Kong's premier companies established in 1857, when John Cheung sold his 34% stake to Pao for HK$2.5 billion forming a core shareholding from which to launch a bid in opposition to the bid from
Tan Sri Khoo Teck Puat who had bought John Marden's 34% stake in the company. Wheelock gave World-Wide exposure to more prime central Hong Kong property as well as the Lane Crawford department store.
Retirement and other activities
In 1986, Pao retired from day-to-day management of the group handing over the shipping business to his son-in-law
Helmut Sohmen and the Wheelock / Wharf interests to
Peter Woo, another son-in-law. By 1989 he announced that he had given up his interests in the Trusts that held the Pao family assets (the shipping interests going to the Sohmen family and the Wheelock / Wharf interests going to the Woo family) and gave up his title as Honorary Chairman of World International. He had already retired from his directorship of the Hongkong and Shanghai Banking Corporation in 1983 when he hit the mandatory retirement age of 65 but continued to lead a very active life taking in advisory roles (formal and informal) and philanthropic activities. Over the years, Pao was on a number of corporate advisory committees including
Chase Manhattan Bank,
Industrial Bank of Japan
Industrial Bank of Japan, Limited (IBJ), based in Tokyo, Japan, was one of the largest banks in the world during the latter half of the 20th century. It was established in 1902 as a policy institution or "special bank", similarly as Nippon Kan ...
,
AT&T
AT&T Inc., an abbreviation for its predecessor's former name, the American Telephone and Telegraph Company, is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the w ...
,
United Technologies Corporation
United Technologies Corporation (UTC) was an American multinational corporation, multinational list of conglomerates, conglomerate headquartered in Farmington, Connecticut. It researched, developed, and manufactured products in numerous are ...
and
Caterpillar Inc.
Pao was active in philanthropic works and was particularly interested in educational projects. Among notable gifts were US$20m to found
Ningbo University
Ningbo University (NBU; ) is a municipal public university in Jiangbei, Ningbo, Jiangbei, Ningbo, Zhejiang, China. It is affiliated with the Ningbo Municipal People's Government. The university is part of the Double First-Class Construction.
H ...
, a £14m contribution to the Sino-British Friendship Scholarship scheme to enable Chinese students to attend British Universities and a US$10m gift to build a library at
Shanghai Jiao Tong University
Shanghai Jiao Tong University (SJTU) is a public university in Shanghai, China. It is affiliated with the Ministry of Education of the People's Republic of China, Ministry of Education of China. The university is part of Project 211, Project 98 ...
.
Personal
Pao had 4 daughters. On 23 September 1991, Pao died in
Hong Kong
Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
at age 72. His son-in-law
Peter Woo became the patriarch of Pao's business empire.
Legacy
The
YK Pao School in Shanghai was founded in memory of Sir Yue-Kong Pao. Yue-Kong Pao Hall at
Purdue University
Purdue University is a Public university#United States, public Land-grant university, land-grant research university in West Lafayette, Indiana, United States, and the flagship campus of the Purdue University system. The university was founded ...
and the Pao Yue-Kong library at the
Hong Kong Polytechnic University
The Hong Kong Polytechnic University (PolyU or HKPU) is a public research university in Hung Hom, Kowloon, Hong Kong. The university is one of the eight government-funded degree-granting tertiary institutions in Hong Kong. Founded in 1937 a ...
were also named in his honour. There is also a Sir Yue-Kong Pao Hall in Chinese International School as well as Pao Yue Kong Swimming Pool in
Wong Chuk Hang
Wong Chuk Hang () is a neighbourhood in the Southern District, Hong Kong, Southern District of Hong Kong Island, in Hong Kong.
History
Neolithic artifacts have been unearthed in a region called Chung Hom Wan, which is not far from Wong Chuk Han ...
in Hong Kong.
Sources
*
References
External links
Pao family profile at Forbes.com
{{DEFAULTSORT:Pao, Yue-Kong
1918 births
1991 deaths
Hong Kong chief executives
Hong Kong businesspeople in shipping
Hong Kong billionaires
BW Group
Businesspeople from Ningbo
Billionaires from Zhejiang
The Wharf (Holdings)
Knights Bachelor
Hong Kong Basic Law Drafting Committee members
20th-century Hong Kong philanthropists
Chinese company founders
Chinese emigrants to Hong Kong
Commanders_of_the_Order_of_the_British_Empire