An Investor Who Sees The Future

Having made up my mind, I organized what I had to do next and then contacted the relevant people to give instructions.

He asked, intrigued.

[Suddenly? What's the reason? Did you find some kind of method?]

"Yes. It's not certain yet, though."

As expected, he was surprised.

[Really? What is this method?]

"For now, keep it to yourself."

I told him about the foresight I had seen and the method to realize it.

After hearing my words, he burst out into a huge laugh.

"This might sound crazy, but..."

[Wow! This is a method I never would have thought of! It does sound crazy, but it seems possible. I've even seen a paper on it before. No, in this situation, this seems highly possible.]

"That's a relief."

[I'll proceed with what you said right away.]

After the call ended, I said to Taek-gyu.

"I'm going to China. Carry on with the work as planned, and if anything happens, contact me immediately."

Taek-gyu nodded.

"Okay."

"Talk to Hyun-joo noona properly."

At my words, Taek-gyu made a long face. He was probably going to get an earful from noona.

***

I took a private jet to Beijing.

It had been a while since I'd been to Beijing, and for some reason, the sky was clear without any fine dust. It was nice to see the sky, but come to think of it, this wasn't necessarily a good thing. It meant that the manufacturing plants around the city were shutting down.

I met with Commerce Minister Li Xuewei at the hotel.

"Haha! Welcome, Mr. Kang."

"It's been a while."

He looked relaxed, as if nothing was wrong. After exchanging greetings, we sat down and drank tea.

Although there was an interpreter, simple conversations were held in English.

"How is Beijing?"

"A lot has changed in the meantime. I was surprised to see the skyscraper being built nearby."

"Ah! You must be talking about the Beijing Finance Center."

In the past few years, new skyscrapers have been built all over China as if in competition, and the city's skyline has changed.

Now, a whopping 50 percent of the world's skyscrapers are in China.

I thought of the "skyscraper curse," which states that an economic crisis occurs around the time a skyscraper is completed.

Large-scale construction projects like skyscrapers begin when the economy is in a super boom. Therefore, by the time the construction is finished, a recession begins according to the business cycle.

Naturally, building those high buildings is all debt. In a way, you could say it's a tower built with debt.

As I drank tea, I got to the main point.

"How is the Chinese economy these days?"

He said with a relaxed smile.

"I see that's what you came to find out. There are just a few bad pieces of news, but there's no problem."

Just as they say the economy is psychology, there is no place where self-fulfilling prophecies come true as well as the market. If a rumor spreads that a bank will go bankrupt, even a healthy bank will collapse due to a bank run.

Therefore, no matter how serious a sense of crisis they feel internally, the government always says it's okay. The moment the government admits there is a crisis, the economy will collapse even faster.

China grew by actively attracting foreign capital after its reform and opening up. But as the crisis became serious, that capital showed signs of leaving China.

Therefore, he was meeting and persuading foreign investors every day. Meeting me must be a part of that.

"For that, the speed of the decline has been unusual. Haven't almost all indices, including the Shanghai Composite Index, fallen by more than 40 percent?"

"Stocks have their ups and downs. This is just a natural adjustment process."

Although he said this, he would know better than anyone that the situation was not normal.

"Then what do you think about the situation in the Philippines right now? Is that also a natural adjustment process?"

The speculative capital of Wall Street was already moving towards Asia. At the forefront was Albert Management. George Soros, who had a history of attacking the foreign exchange markets of Hong Kong and China, had also joined in.

The first to be attacked was the Philippines.

After the US raised its benchmark interest rate, the Philippines raised its benchmark interest rate to 7.5 percent to prevent capital outflow. This was a level that the Philippine economy, which was already in a recession, could not handle. The CDS (credit default swap) premium soared, and companies had great difficulty in financing.

In this situation, when a large amount of short-selling poured into the foreign exchange market, the surprised Philippine government poured out its foreign exchange reserves to defend its exchange rate.

It asked neighboring countries for help, but it was difficult for them to help as they were also struggling to take care of themselves. Japan, on the other hand, withdrew Japanese capital from the Philippines.

How much longer could the Philippines hold out?

"This huge capital did not gather to plunder just the Philippines. Isn't it obvious where this speculative capital will move next?"

Commerce Minister Li Xuewei scoffed.

"The rumor that China will also become like that is the very story that the speculative capitals are spreading. Should we believe it and be afraid?"

As China is embroiled in various pieces of bad news, a devaluation of the yuan is an unavoidable reality. But if it proceeds rapidly, there is a risk that not only the Chinese economy but also the world economy will collapse.

China did not stand by idly. While promoting internal unity, it was also scrambling to secure foreign exchange reserves in preparation for a possible situation.

However, as the yuan was expected to be devalued, the dollar disappeared from the market. If it is certain that it will be more profitable to exchange it later, there is no reason to exchange it now. Companies also held onto the dollars they had earned from exports without exchanging them.

To get the dollars to come out into the market, the yuan must be devalued to a level that the market can accept. But China, in its usual Chinese way, went about solving the problem.

It began to call in CEOs for investigation and shake them down with various charges. Even Ma Huateng, the CEO of WeChant, China's largest internet company, was called in for investigation.

Then, the surprised companies all poured out the dollars they had been holding into the market. But this method has its limits. Companies are not fools, so they will try to hide their dollars more cunningly.

"Is that all you're curious about?"

Of course not.

I continued with another question.

"Are there any plans to deploy the People's Liberation Army to Hong Kong?"

At my question, Commerce Minister Li Xuewei's expression hardened. The smile disappeared from his face, and his eyes turned cold. A strong sense of intimidation could be felt from his small frame.

He asked, displeased.

"Why on earth is Mr. Kang curious about that?"

I said calmly.

"Because it's my fiancée's hometown."

This was my way of conveying my wish that the People's Liberation Army would not be deployed to Hong Kong.

After glaring at me for a moment, Commerce Minister Li Xuewei said, as if sighing.

"I understand your concern, but that's not something Mr. Kang needs to worry about. To be honest, I, along with many others, hope that such a thing does not happen."

The protests in Hong Kong were becoming more intense by the day, and the number of casualties was gradually increasing. The People's Liberation Army deployed in Shenzhen began to hold drills as if to show off.

The state-run media, such as the People's Daily and CCTV, defined the Hong Kong protests as illegal and criticized the protesters for exacerbating the economic crisis.

The intention is to deflect the discontent caused by the recession and the decline in the stock and real estate markets away from the Communist Party and towards Hong Kong. It's questionable whether anyone would fall for this, but for now, it seems to be working.

If you look at the Chinese internet and social media, it's flooded with rumors that Hong Kong's speculative forces are ruining the Chinese economy.

As he said, there would be strong opposition voices even within the party. But who knows what will happen if the situation changes.

"I would like to meet with the Chairman."

Commerce Minister Li Xuewei waved his hand.

"The Chairman is busy. It would be best for you to leave now."

It's no exaggeration to say that the Chinese economy is on the brink of collapse. Anything could turn into a negative factor.

If a rumor spread that I had met with Chairman Zhang Pinghua for no particular reason, it could be perceived that the Chinese economy is in danger. That's probably why he's reacting so sensitively.

"I did not come without a reason."

"This is not the time for that."

"It is precisely because it is not the time for that that I am doing this."

After looking at my expression, Commerce Minister Li Xuewei stood up for a moment and then returned.

"Can I trust that today's events will not be known to the outside?"

I nodded.

"Of course."

***

I took a black car into Zhongnanhai and was guided to a small room in the Central Sea.

After waiting there for about an hour, Chairman Zhang Pinghua and Premier Bo Xiaoyu entered together. Chairman Zhang Pinghua smiled and shook my hand.

"Thank you for coming all this way."

"It's been a while."

Premier Bo Xiaoyu said.

"I'm sorry, but I have another appointment afterward, so it will be difficult to spare more than 30 minutes."

"That's more than enough."

I looked at them as they sat down and said.

"You must be aware that speculative capital is targeting the yuan."

China is the most populous country in the world. The Communist Party is running this huge country as a planned economy.

As the best economic experts from a population of 1.5 billion are gathered, they must have already noticed that a certain force is trying to bring down the Chinese economy. It's just a matter of whether they can succeed or not.

I recalled my conversation with Professor Wei Hebei.

The problems of the Chinese economy were not temporary or accidental, but structural. Corporate debt, a real estate bubble, shadow banking.

People called this the gray rhino. If the black swan was something they couldn't stop because they didn't know about it, the gray rhino was something they didn't stop even though they knew about it.

They had to solve the problem before a bigger crisis came, but they put it off and neglected it even though they knew it was a risk.

In the meantime, the gray rhino had grown big enough to bring down China. And now someone is whipping the rhino.

"Once the attack begins in earnest, how much longer do you think China can hold out?"

He looked at me with an indifferent gaze. It was a gaze that seemed to be trying to read my inner thoughts.

I did not avoid his gaze and met it.

There is no good or evil in money, and there are no allies or enemies. There is only profit and loss. Capital can move anywhere and join hands with anyone as long as it can make money.

Right now, no one can be trusted. After learning the truth, there's no law that says I won't take the lead in bringing down the Chinese economy.

"I think we can hold out for a month."

In other words, is it difficult for more than a month?

I made a cool calculation.

Can I make it in time? The moment I move, they will move too. We'll only know who will win when we fight.

If you succeed, you get everything, but if you fail, you lose everything. It would be the same for them.

"What would you do if there was a way to solve the current crisis?"

At my words, everyone in the room was surprised.

Premier Bo Xiaoyu asked, on the verge of jumping up from his seat.

"Is that really true?"

Chairman Zhang Pinghua also did not make a sound, but his eyes were filled with surprise.

"Before I tell you the method, I would like you to make one promise."

Chairman Zhang Pinghua opened his mouth.

"What is it?"

"As I just told the Minister of Commerce, I do not wish for the People's Liberation Army to be deployed to Hong Kong. Also, I hope that Hong Kong's autonomy and democracy will continue."

Premier Bo Xiaoyu, who had a look of expectation on his face, raised his voice in a warning tone.

"CEO Kang Jin-hoo! It would be best for you to refrain from crossing the line!"

His face clearly showed strong displeasure.

"I am not saying I will go against the one-China principle. Because Hong Kong's current position will also be helpful to China. In the past, the Soviet Union had the power to push Finland aside, but it did not. Because the losses were far greater than the gains."

After the Winter War and the Continuation War, Finland, while being a part of the free world, maintained trade with the Soviet Union and served as a window for the Soviet Union to connect with the Western world. Hong Kong is such an existence for China now.

Hong Kong is the financial hub of Asia, and of China's $2.5 trillion in exports last year, $300 billion was made through Hong Kong.

If Hong Kong's democracy and capitalism collapse in any way, capital will leave Hong Kong. If that happens, China will also be hit hard.

Chairman Zhang Pinghua raised his hand as if to say not to say anything. Premier Bo Xiaoyu, who was about to rebut, and the flustered Commerce Minister Li Xuewei fell silent at the gesture.

"Would you mind telling me the method?"

This is where it gets important.

Everything that will happen in China and Hong Kong from now on depends on this one person's heart. If I can't persuade him, nothing will work.

I slowly opened my mouth.

"The method I thought of is..."

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