The Truth Behind Beijing's Real Estate Crash
The house prices the steward reported were simply not a figure he could accept.
They were so outrageous that he even found himself doubting the loyalty of a steward who had served the Cheon Family for years.
Yet astonishingly, that price was reality down to the last copper coin, without the slightest error.
"How can land values drop this far in such a short time?"
"That is… they say countless high officials and wealthy men in Beijing have all put their houses and land up for sale at once."
"What?! Why in the world would they do that?!"
Cheon Sang-hun had no idea what was going on.
The real-estate crash that should never have happened began when the moderate high officials Hui-yeom had quietly recruited during his "sales" rounds started discreetly liquidating their family assets.
The Emperor had a business venture that was guaranteed to succeed, and they needed capital to pour into it.
Selling jewelry would never raise that kind of money, so they turned to selling land and buildings instead.
When high officials suddenly dumped property onto the market, merchants sharp with finance noticed at once.
They pricked up their ears, trying to learn what the story was—whether the state itself was planning something.
Soon the officials' own blood relatives and the merchants connected to them uncovered the information first.
The Emperor is launching a jackpot enterprise! First one to put money in owns it!
Judging that way, the merchants also threw their own jewels, buildings, and land onto the market.
And the secret they had obtained rode the "just between us" network and scattered in every direction through Beijing's financial circles.
As more and more people abruptly put land and buildings up for sale, Beijing's real-estate market began to heave and shake.
Those who had first snapped the properties up thinking it was free money later sensed something wrong with the way things were going and hurried to resell what they had just bought.
Ironically, the Cheon Family—who had shut their eyes and ears in opposition to Hui-yeom's policies—learned of it far too late, and that was how this disaster had come upon them.
"Shall we start buying now?"
"No… I want to drive them down a little further. Yun-mae, how is the rumor campaign progressing?"
"If we start by spreading the story that 'His Majesty the Emperor intends to revise the tax regulations on real-estate ownership, and that is why the great merchants and officials are racing to dispose of their houses,' it will have no effect and we will be identified at once.
"We've put several agents from the Sakpungdae and our own family to work, manipulating things little by little. Right now we are still at the stage of simply spreading the fact that 'house prices are falling.'"
"Good. I'll leave that part entirely to you, Yun-mae."
At Hui-yeom's trusting tone, Sama Yun thrust out her chest, gave a proud little cough, and lifted her nose high.
"Leave it to me. Once our family steps in, no one will be able to avoid being taken in. We can probably fool the entire Eight Great Families as well."
"The speed and direction in which the rumors are spreading are unnatural."
Jegal Eun-ryeo set down the report she had finished reading and spoke to her father, Jegal Jin, in a respectful tone.
"Rumors normally spread through people who have an interest in the subject. Yet the common folk living in Beijing have almost no connection to real-estate prices.
"For talk of property trends to suddenly increase this much among ordinary citizens clearly means someone's intention is at work."
Commoners being sensitive to house prices was a story of the modern world.
In this age a house was simply something one inherited generation after generation, repairing and renovating it as needed; ordinary people rarely bought or sold one unless something truly extraordinary occurred.
Therefore, if rumors about house and land prices were to circulate, they should first pass among merchants, not commoners—yet this time it was not so.
"I thought the same. So let us assume someone is deliberately spreading the rumors. Why would that person choose the common folk as the means of dissemination, knowing people like us might grow suspicious?"
"Merchants possess their own information networks and financial power, so spreading the rumor among them would make it hard to conceal oneself. By contrast, leaking it indirectly through an unspecified mass of commoners so that it eventually reaches merchants' ears would let the instigator notice any suspicion and withdraw before being identified."
"Exactly right."
Jegal Jin spoke with a thin smile of satisfaction at his wise daughter.
"And there are not many forces capable of running a rumor campaign across the whole of Beijing without the Jegal Family noticing. Who do you think it is?"
"The first that comes to mind is the Dongchang. They could be conducting the black operations to realize His Majesty the Emperor's will."
"Most suspicious, yet low probability. Would His Majesty really go to such laborious lengths just to lower Beijing land and building prices?"
"True…"
"Next?"
"The Eight Great Families. But they have no reason either. They hold the greatest amount of real estate in Beijing; they have no need to damage the value of their own assets."
"Correct. Then next?"
"Merchants could, but they are not fools who would fail to weigh the risk of falling out of favor with the Eight Great Families by acting this way. Probability is low."
"Yes. And after that?"
"The murim clans. Excluding ourselves, the Sama Family is the most likely, though the Beijing Yang Family or the Hebei Paeng Family could also manage it. But if the method is this underhanded and clandestine, the odds favor the Sama Family."
"Even though the Sama Family itself holds a great deal of real estate in Beijing?"
"If they can gain something larger still, they are the sort who would discard not only real estate but even their own ancestral home steeped in centuries of history and vital energy, are they not?"
Hearing the usual calm and gentle voice of his daughter take on a slight edge of thorns, Jegal Jin gave a short laugh.
"The fish that got away still stings quite a bit, I see."
"What do you mean?"
"Nothing. We have come full circle, and in the end you name the Sama Family as the most likely suspect."
"Does Father think otherwise?"
"Well, both yes and no. I do not think it is the Sama Family. I think that fellow Dang Hui-yeom is the one who orchestrated this."
"Young Master… Dang?"
Ever since he had unwillingly acquired the epithet "Sichuan Crouching Dragon," merely mentioning Hui-yeom's name had become a delicate matter within the Jegal Family.
When her father brought the name up first, Jegal Eun-ryeo tensed slightly, but Jegal Jin showed no sign of anger and continued.
"Let us think of it this way. Instead of asking 'who can shake Beijing house prices,' ask 'who stands to gain the most if Beijing real-estate prices fall right now?'"
"…Ah!"
"Because of the talk of the Beijing Railway Joint-Stock Company that young man uttered in the imperial study, I looked into railways a little.
"Have you studied how railways and railway companies operate?"
"Ah, no. Your daughter is unlearned and has not yet reached that far in her studies…"
"No need for shame. Until a few days ago I myself knew nothing of the concept.
"Fortunately, railways and railway companies are already running in Sichuan and Yunnan, so obtaining information was not difficult."
"…"
"A railway company requires an enormous amount of land. Especially in a place like Beijing, where roads and houses have been laid down over long ages like a spider's web, laying track is virtually a fantasy.
"Yes—unless something drives people into panic so that they race to throw their houses and property onto the market, as is happening now, it would be a dream one could never even entertain."
"…!"
"To buy even an inch of land for the rails, one must meet the owners, haggle, threaten, pay inflated prices… Meanwhile construction delays mount and costs only rise… In the end the project would run onto every possible reef and be perfectly positioned to founder.
"To be honest, when I first heard about the railway company in the imperial study, I thought the chance of things going that way was not small.
"But now the situation has become strange. Except for the Gongjonggol Family, none of the other Eight Great Families have sold their land."
"They have no need of money and prefer to watch a little longer, do they not?"
"Probably. But consider this."
For the first time a dark, damp shadow settled into Jegal Jin's eyes.
"What if Young Master Dang never intended to buy land from the Eight Great Families in the first place?"
"?"
"You seem not to understand. Then think of it this way. What determines the price of urban land and buildings?"
"Obviously, buildings near government offices, or far from the outer walls—places with good security and safety—or near academies and lecture halls, locations with good position, are expensive."
"Everything you just named has one thing in common: they all border a major thoroughfare."
"What? Well of course… traffic!"
Enlightenment struck through Jegal Eun-ryeo's mind like a flash of lightning.
Watching her pupils tremble with the unspoken Surely not? Surely not?, Jegal Jin gave a heavy nod.
"What if Young Master Dang deliberately routes the railway so as to avoid land owned by the Eight Great Families? What if he places no stations near them? What if the traffic center of Beijing shifts?"
"…The asset value of the real estate held by the Eight Great Families would take no small blow."
"This father's thought is a little different. The blow to existing property prices will be slight. After all, the geographic advantages of the land the Eight Families already occupy cannot be ignored.
"However, land that until now has been discarded as worthless will see its value rocket straight upward."
And while everyone else's asset prices soar, if only one's own stay exactly where they are, that is little different from a crash.
This affair will open a great gap even among the Eight Great Families—between those who submit to Hui-yeom… or more precisely, to the Emperor Sungui behind him… and switch sides, and those who do not.
"If one can pre-empt those lands, one could even stand against the financial power of the Eight Families.
"I would wager a large sum that before Young Master Dang builds the stations he will either buy up the surrounding land in advance, invest under other names, or at the very least report to His Majesty and receive allocations under one pretext or another."
"Aaaah…!"
Feeling the strength leave her knees, Jegal Eun-ryeo shuddered.
Look at what the man named Hui-yeom was doing with the single tool called business.
He was whittling down the power of the Eight Great Families—an impregnable bastion the murim clans could never hope to challenge—while strengthening the opposing forces.
He was planting mutual suspicion and opposition among the Eight Families themselves while, behind the scenes, plotting this.
And the Beijing Railway Company was only the beginning of this man's plan.
Was not the Beijing Railway Joint-Stock Company ultimately a state-led pilot project to establish the joint-stock company system itself?
What on earth was this man plotting with that joint-stock company system?
Truly… an extraordinary person…
Without realizing it, Jegal Eun-ryeo felt her admiration for Hui-yeom grow ever larger.
How could a younger brother two years her junior possess a depth and breadth of scheme as vast as the sea?
Like a scholar venerating a great scholar, she found it hard to conceal her respect for him.
Jegal Jin watched her quietly from the side, then stroked his chin.
"Hmm. How is Young Master Namgung Sang-min these days? Still as immature as ever?"
"…Yes… well…"
At the mention of Namgung Sang-min, Jegal Eun-ryeo's expression visibly clouded and hardened.
Looking at her, Jegal Jin spoke words heavy with meaning.
"Keep a little more distance from that fellow from now on. And… do not decide too early. Just because someone already has a partner does not mean there is no empty seat beside them."
"…What? Father, what do you mean by…"
"More importantly."
Jegal Jin smiled at his flustered daughter.
"What he intends to do with that joint-stock company policy… that is what I want to know."
"So after you pass the laws related to joint-stock companies, what do you plan to do next?"
Hui-yeom answered Sama Yun's question thus:
"Nothing."
"?"
"And everything will come to pass."