Bao Yugang was a well-known Hong Kong tycoon and philanthropist.
Background
Bao Yugang was born in Ningbo in 1918, Bao was the second son of a prestigious family. He is said to be the twenty-ninth generation in a direct line from the famous official Bao Zheng of the Northern Song Dynasty, well known in Chinese history and literature.
Education
Bao received his education in Hankou while working for his father’s shoe manufacturing business. By the time he was twenty years old, Bao had dedicated himself to self-improvement, rejected a future in the family shoe business, and agreed to an arranged marriage to a respectable girl from the same upper-middle class Ningbo community from which his family originated.
Career
In the midst of the Japanese invasion in 1938, Bao relocated to Shanghai. Employed at the Central Trust of China, Bao moved into banking and quickly rose through the company ranks during the war years. After the war, he was charged with the establishment and management of the new Municipal Bank where he eventually reached the position of deputy general manager.
With the communist takeover of China in 1949, Bao and his family moved to Hong Kong, managing to save the majority of their wealth. Rejecting investments in real estate and other fixed assets because of the uncertainty surrounding Hong Kong’s future, Bao’s initial business was a small trading company started with two business associates. The import-export business grew quickly, helped along by a trade embargo against China as a result of its intervention in the Korean War in 1950. Exploiting loopholes in the trade embargo, Bao’s firm the New United Company moved into new trading areas, including chemicals and iron. Working to trade goods through the ‘Bamboo Curtain’, Bao was able to weather anti-capitalist campaigns on the mainland aimed at the destruction of those capitalists, landlords, and bureaucrats who had not fled the communist takeover. Bao’s business improved, owing to his decision to seek expansion capital through the Hong Kong and Shanghai Bank.
Making connections with senior banking officials John Saunder and Guy Sayer in 1952 both of whom would have a long business relationship with Bao provided him with the necessary capital for expansion. Still concerned to avoid fixed assets, Bao sought out new ventures as his business grew, and in 1955 decided to move into shipping. Believing travel was essential to build his business, Bao went to London and Washington DC to make connections and trouble shoot problems related to his business interests.
Considered a dubious enterprise at the time, Bao’s first ship was acquired without financing. Yet, his meticulous management and prudent decision-making inspired the Hong Kong and Shanghai Bank to approve a loan for further ship purchases. As a result, his shipping business grew quickly, with all new vessels dubbed with the second name ‘Golden’, then ‘Eastern’, and finally ‘World’, Bao’s World-Wide Shipping grew to meet the expanding demand of the postwar Japanese market. Bao’s philosophy concerning shipping was careful management of machine, personnel, cargo, and clients to minimize risk and maximize rewards, training officers and crews extensively, and choosing charter customers based on their ability to pay.
Moreover, using a system called shikumisen, Bao shifted the fiscal burden of ship maintenance by creating long-term (10–20 years) charter agreements where ship operations and upkeep became the charter’s responsibility. This system allowed World-Wide Shipping to expand rapidly between 1965 and 1975. By 1980, Bao’s World-Wide Shipping had the world’s largest shipping fleet and he was internationally known. He had been made a member of the board of directors of the Hong Kong and Shanghai Bank (1971), received an honorary law degree from Hong Kong University (1975), appeared on the cover of Newsweek magazine (1976), spoken at the Harvard Business School (1976) and he was knighted in 1978.
Bao died in 1991, but his legacy continues in the business world and through charities. In December of that same year a 14 000 square-meter library was constructed in his honor on the Minhang campus of Jiaotong University in Shanghai.
Politics
In the late 1970s, Bao recognized a need to diversify to avoid downturns in the world shipping market. He expanded his holdings in real estate using the proceeds from ship sales as World-Wide reduced its fleet by selling off older ships. Bao acquired a 10 percent stake in the Hong Kong and Kowloon Wharf and Godown Co. Ltd, and worked to increase this stake to 49 percent. The acquisitions of Wheelock Marden in 1985 further expanded Bao’s real estate holdings putting several hotels, offices, and retail spaces under his control. In the late 1980s, Bao retired from day-to-day operations, and stepped down from active mem- bership of most corporate boards. After divesting his family trust by selling most hard assets, Bao worked on philanthropic campaigns. In July 1981, Bao donated 10 million dollars for the construction of a new library named after his father at the Shanghai Jiaotong University.
Personality
Quotes from others about the person
According to Margaret Thatcher, former British prime minister: ‘Sir Y.K.’s outstanding skills are recognized and appreciated throughout the world. But it is with Hong Kong – and the unique business ethos of the territory – that his achievements are most closely associated. For Hong Kong has provided the conditions in which his extraordinary entrepreneurial skills and energy have been applied in full’ (Thatcher, 1990).
Connections
He would remain married until his death.