The climax of the first wave of attacks on Hong Kong's financial market by international investors came to an end with a huge loss of HK$20 billion in Hang Seng Index futures in August. In addition to being hit head-on in the Hong Kong stock market, international funds have also failed to take advantage of the Hong Kong dollar exchange rate market. The Hong Kong authorities have used tens of billions of dollars in foreign exchange reserves to keep the exchange rate of the Hong Kong dollar against the US dollar floating at around 7.8.

After experiencing the toughness of the Hong Kong authorities, many follow-up funds quickly shifted their targets elsewhere. After all, the purpose of the tour capital is to make quick arbitrage, not to carry out dead ends without brains. As soon as you find that you can't do anything, stop your position immediately!

Therefore, since August, although the hunt for Hong Kong by international tourists has continued, the momentum and scale are much worse than before. The Hong Kong government continued to fight steadily, and after nearly a year of tug-of-war with them, it completely survived the financial turmoil that swept through most of Asia.

At the beginning of '97, the Hang Seng Index was still at a high of 15,000 points, and then quickly fell to only 12,000 points in more than two months. With the completion of the harvest of international travel funds in Southeast Asia and the transfer of the target to Hong Kong, the Hang Seng Index continued to be suppressed all the way, almost falling below the 10,000-point mark. Then the Hong Kong authorities began to enter the market, and the Hang Seng Index finally stopped falling and rebounded, and finally recovered to 12,000 points by the end of the year.

In other words, after a round of financial turmoil, Hong Kong stocks actually fell by 20%, almost squeezing out the part of the bubble that had accumulated because of the return of 97 to speculation. So although the crisis has dampened the confidence of many investors, it has also brought the Hong Kong stock market, which was about to get out of control, back to normal.

Hong Kong's property market is in a similar situation, with the average house price in Hong Kong at the end of '97 falling by 25 per cent from the beginning of the year, almost returning to the price it was when it first started to rise wildly in '95. However, the crisis in Hong Kong's property market is actually more tricky than the stock market!

Because although the Hong Kong stock market has experienced a sharp rise and fall, the real operating performance of listed companies is not as turbulent as the stock price shows. In particular, Hong Kong's electronics industry, whose core export markets - the United States and Europe - are not greatly affected by the Asian financial crisis, so the overall revenue performance has not declined significantly.

The Hong Kong property market is different, with the development of the New Territories officially kicked off in 1994, Hong Kong's real estate industry has been in short supply for a long time The situation has begun to undergo major changes. This was originally intended to curb the excessive growth of property prices, but when encountering a sudden financial crisis, it may have a superimposed effect and completely collapse the entire property market.

Because as Hong Kong's housing prices plummeted, a large number of buyers who just needed to buy money began to wait and see, while a large number of investment buyers began to stop their losses and leave the market. This has greatly reduced market demand, while at the same time new properties are constantly being listed, so the original situation of short supply has suddenly become an oversupply.

Therefore, the core problem of Hong Kong's property market is actually a question of investment confidence. After all, most people can't accept that the house they bought back for millions of dollars is shrinking every day!

Therefore, on New Year's Day in 1998, Li Xuan issued an announcement that he would invest 100 billion Hong Kong dollars to set up a special Hong Kong residential investment company to support the Hong Kong property market.

Of course, the figure of 100 billion is just a publicity gimmick, and in fact, the first phase of investment is 30 billion Hong Kong dollars. That's about the amount he had cleared all of his homes and the money he had harvested in Southeast Asia during the financial crisis.

Taking advantage of the crazy surge in housing prices in the New Territories, Li Xuan emptied the tail plate of various real estate projects in the New Territories that he had acquired from real estate developers since the early 80s, and accumulated a large number of residential units, reaping a huge profit of 22 billion Hong Kong dollars in total. Although the money is all legitimate profits, in the context of the collapse of Hong Kong's property market and the heavy losses of Hong Kong investors, it is easy to be morally condemned, giving people the bad impression that he, the richest man, is sucking blood from the citizens of Hong Kong.

There is no need for him to be contaminated with this kind of moral stain, so he simply takes it from the people, uses it for the people, and reinvests this part of the funds into the Hong Kong property market.

Therefore, starting from New Year's Day in '98, Li Xuan, a newly established Hong Kong residential investment company, began to purchase second-hand houses on a large scale in various regions of Hong Kong. In just three months, Li Xuan acquired 6,000 residential units with a total construction area of more than 4 million square feet and consumed 20 billion Hong Kong dollars! This crazy house-sweeping operation immediately caused a sensation in Hong Kong, and the average house price in Hong Kong finally succeeded in stopping the downward trend.

Of course, it is impossible for Li Xuan to keep buying real estate without restrictions, so he will really become a wronged man. When the average property price of an investment company rises by more than 5%, it will gradually reduce its buying operations. When property prices rise by more than 10%, investment companies will change from buying to selling, which in turn will curb the rapid rise in property prices.

The real purpose of Li Xuan's establishment of this Hong Kong residential investment company is actually to rely on his strong financial strength to control the ups and downs of the Hong Kong property market. Under normal circumstances, his practice of manipulating the market will certainly be condemned by public opinion and investigated by the government.

But now that Hong Kong's property market has experienced a plummet, the whole city is looking forward to a hero who will turn the tide and lead everyone out of the predicament. He is now entering the market with a large amount of money to sweep the goods, and he will pull up the property market with his own strength, not only will he not be questioned, but will be highly respected.

And when the number of residential units in his hands is so large that he can leverage the entire market, it is natural to affect the entire rise and fall trend.

In fact, Li Xuan's unparalleled prestige in Hong Kong, as well as as up to 20 billion Hong Kong dollars of real money, the effect of the two is still very significant. The originally cold Hong Kong property market, after the emergence of the white knight of the Hong Kong residential investment company, has finally been driven again, and the transaction volume has begun to rise.

And Li Xuan also went all out and continued to smash the remaining 10 billion Hong Kong dollars into the property market. However, compared with the previous Hong Kong Pratt & Whitney, the 10 billion yuan was mainly invested in the core areas of the "New Territories Development Plan" - the western and northern New Territories.

You must know that with the mushrooming of new real estate projects in the past two years, the residential supply of New Territories New Town is the most abundant, so it has naturally become one of the areas with the deepest decline in Hong Kong in this round of housing price crash.

As a result of the drastic fall, public opinion in Hong Kong has begun to question the reasonableness of the "New Territories Development Plan," which has put tremendous pressure on the newly established SAR government.

However, with Li Xuan's directional investment of up to 10 billion yuan, the property market in the New Territories also began to pick up quickly. By the time the Hong Kong Residential Investment Corporation announced the suspension of large-scale home purchases, the property market in the New Territories had risen by an average of 11%, leading all areas in Hong Kong!