Hong Kong’s Maritime Trade, Part V: The Shipping Tycoons

When you look back through Hong Kong’s history, it seems only natural that its first chief executive after the 1997 handover was a shipping magnate. Tung Chee-hwa was born in Shanghai into the family that founded Orient Overseas Line (now Orient Overseas Container Line or OOCL, one of the largest shipping lines in the world). When he took over the business from his father in 1982, it set him on a path to becoming Beijing’s favoured pick to be Hong Kong’s first post-colonial leader.

Tung was hardly alone among his peers in wielding political influence. Pao Yue-kong, another Shanghainese shipping tycoon, was instrumental in writing Hong Kong’s Basic Law. Eight decades earlier, another entrepreneur, Ng Jim-kai, used his shipping fortune to bankroll Sun Yat-sen’s revolution, which overthrew China’s last imperial dynasty and led to the establishment of the Republic of China.

All of this makes sense to Tim Huxley, chairman of Mandarin Shipping and amateur chronicler of Hong Kong’s shipping history. “Shipping is such an international business, [shipowners] were among the best connected businessmen,” he says. “They had access to the corridors of power.”

Few other groups have been as influential in shaping Hong Kong as shipowners. And yet the shipping industry’s economic and political might remains unknown to most of the public. “It’s out of sight, out of mind for most people, but 90 percent of everything is shipped by sea,” says Huxley. “Every global event has got a shipping backstory to it.” 

In Hong Kong’s case, it’s more than just a backstory: it’s how the city came to global prominence in the first place. “It is undisputed among historians that of all economic activities in China between 1860 and 1895, shipping was the most important,” wrote University of Hong Kong historian Bert Becker in a 2010 edition of the Journal of the Royal Asiatic Society Hong Kong Branch. And Hong Kong very quickly became one of the most important ports in Asia. 

As Joseph Ting Sun-pao notes in a survey of Hong Kong’s maritime history commissioned by the Marine Department, the volume of ships entering the British colony grew exponentially each decade of the late 19th century. In 1861, 2,545 ships carrying 1,310,385 tons of cargo entered the harbour. By 1898, that had risen to 11,058 ships and 13,252,733 tons. The following year, imperial Chinese officials determined that Hong Kong was handling just over 40 percent of all the trade in China.

Ting attributes this growth in trade to a few factors. After the Suez Canal opened in 1869, trade between Asia and Europe became much faster and less expensive, since there was now a safe and secure way to avoid the perilous Cape of Good Hope on the southernmost tip of Africa. British and Chinese authorities had worked together to suppress piracy, which had plagued trade along the South China coast for centuries. European powers were opening treaty ports throughout China, and Hong Kong was an important point of transshipment. And the Nam Pak Hong trade between merchants in Hong Kong and the Chinese diaspora in Southeast Asia was flourishing.

The early decades of the shipping industry were dominated by European interests – not just British, but also French, German and American. Venerable trading companies that had been doing business in Canton and Hong Kong established shipping lines like the China Navigation Company, which was founded by Butterfield and Swire in 1872. The people involved in these companies were among the most influential in Hong Kong: one early player in the shipping industry, Gibb, Livingston and Company, was run by Thomas A. Gibb and W. Potter Livingston, advisors to the governor and two of Hong Kong’s very first justices of the peace. 

Ng Jim-kee was an outlier in that cosseted colonial world. Although there were Chinese businessmen involved in the Nam Pak Hong trade, such as rice merchant Ko Mun-wah (co-founder of the Tung Wah Hospital) and Kwok A-cheong, who built his own line of steamships serving the Pearl River Delta, the shipping industry was generally dominated by foreign firms. That changed with Ng’s arrival in Hong Kong. Born as Ng Tung-kai in Taishan in 1859, he left for California at the age of 18, where he changed his name to the more English-sounding Jim and began working first as a miner and then in a laundry. He then began working in farm fields, learning enough to launch his own potato farm in Inglewood — now a suburb of Los Angeles — which earned him enough money to build a palatial residence in his hometown.

That wasn’t the only thing for which Ng used his fortune. He also bankrolled the revolutionary activities of Sun Yat-sen. As York Lo writes on the Industrial History of Hong Kong blog, with information provided by Ng’s grandsons, Ng saw Hong Kong as a base from which he could overthrow the yoke of imperial rule in China and develop it into a modern, industrialised society. He settled here in 1899 and began investing in textiles, establishing knitting and weaving companies that made underwear and hosiery. But he was especially interested in shipping. 

“In 1906, a number of sick overseas Chinese returnees were denied passage to their ancestral homes in Sze Yap by the British shipping firm of Swire,” writes Lo. “Infuriated by the situation, Ng and two of his friends incorporated the Sze Yap Steamship Company in Hong Kong with Ng serving as its president.” From an initial fleet of three steamships plying the Pearl River and its estuary, Ng’s shipping operation expanded to include the China Mail Steamship Company, the world’s first Chinese-owned trans-Pacific shipping line, which ran three ships between Hong Kong and San Francisco. 

China Mail went bankrupt in 1923, and Ng died in 1935 after focusing his energies on philanthropy. But his nationalist fervour was later echoed by another shipping magnate, Pao Yue-kong. Born in Ningbo in 1918, he moved to Hankou — now part of Wuhan — to work in his father’s shoe making business. Deciding the life of a cobbler was not for him, he moved to Shanghai to work in banking, which led to a career in finance that eventually saw him running a government-backed bank after the end of World War II. When it became clear that the Chinese Civil War would result in a Communist victory, however, he began transferring as many of his family’s assets to Hong Kong as possible. When the so-called Bamboo Curtain finally fell in 1949, Pao had already settled in the British colony.

Wary of investing in any fixed assets, Pao launched himself into imports and exports, before a ship caught his eye. It wasn’t the most alluring vessel — a coal-burning freighter that, at 28 years, was getting a bit long in the tooth — but it was affordable. And most importantly, it was something that could be easily moved if the political situation in Hong Kong ever deteriorated. 

Pao bought that first ship in cash, and after it proved its worth, he was able to secure financing from a few prominent managers he had become friendly with at HSBC. Over the next 20 years, Pao grew his company, World Wide Shipping, into the largest shipping business in the world. He wasn’t alone in his success. As Hong Kong boomed in the decades after World War II, several other men with roots in Shanghai and Ningbo came to dominate the shipping industry, notably Cecil Chao, Tung Chao-yung (father of Chee-hwa) and Koo Kou-hwa. “They lost everything in Shanghai so they came to Hong Kong and said, ‘We don’t want that to happen again, so let’s invest in shipping so if things go wrong, we can pull the anchor up and sail the assets away,” says Tim Huxley. “They are the making of modern Hong Kong.”

That’s true in more than just a business sense. Forced from home by Communist rule, they never lost their sense of patriotism. Hong Kong was a safe haven under the British, but these Shanghainese shipping magnates were keen for the colony to embrace the motherland. That doesn’t mean they were parochial. The Hong Kong they imagined was one modelled in their own image: resolutely capitalist and rooted in China, but looking outwards to the world. Pao Yue-kong’s daughter, Anna Pao Sohmen, describes him as “a global citizen with a Chinese heart.” Despite his anger at Japan for its brutal invasion of China, Pao spent years learning Japanese in order to do business with the country. His own family was reflective of Hong Kong’s cosmopolitanism. “The older generation spoke in Shanghainese, the younger generation replied in Cantonese and if we felt frustrated we would speak in English,” Pao Sohmen recalled in a 2013 interview.

By the early 1980s, the nature of the shipping business had changed drastically, something we’ll explore in an upcoming article. But Hong Kong’s shipping magnates had parlayed their success into influence. Pao counted Margaret Thatcher and Deng Xiaopeng as friends, and his close relationship with the two allowed him to play middleman in the 1984 negotiations over Hong Kong’s future. That led directly to the Basic Law and the complicated, contentious reality of Hong Kong today. Shipping shaped Hong Kong from the very beginning – and its legacy continues to do so today.

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