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The mystery Hong Kong tea trader who helped win a war

THE TEA TRADER had no tea leaves to buy or sell. But he didn’t mind. Young merchant Liao had far more serious matters on his mind.

In January of 1938, he’d opened a tea import-export business called the Yuehua Company (粵華公司) at 18, Queen’s Road in Victoria, the main city and central business district of British-run Hong Kong. It was nestled inbetween other similar offices. Yet anyone who kept an eye on Yuehua Company would have noticed a conspicuous lack of workers delivering or collecting crates of tea.

Yuehua tea company was in a cluster of buildings roughly where Landmark is today. Image: Public domain.

Instead, the office had large numbers of young men arriving and leaving. The truth was that the Liao Chengzhi (廖承志) had opened the Yuehua tea firm as an underground office to support the Chinese Eighth Route army—the main combatants tasked with the mission of stopping the Japanese invasion.

The Chinese resistance was suffering. All manner of help was desperately needed—and Chinese people all over the world wanted to help. Hong Kong’s unique geographical location and geopolitical positioning made it an ideal place for the processing of war materials from overseas to China.

But you can see the problem. Britain, officially, had a policy of keeping all the warring parties in China out of the city they were running as a Crown Colony. And the British played hardball. When there was a massive strike in Canton (Guangzhou) in 1925, British, French and Portuguese soldiers fired on the crowd in an incident remembered as the Shakei Massacre. One bullet had blown Liao’s hat off but thankfully missed his head. More than 200 protesters lost their lives.

Liao in his mature years.

Still the British knew that the situation in China in the 1930s was in flux, and they would have to be flexible. They also knew full well that the tea import-export trader was a Chinese man working for the army, under the direction of a fast-rising government official named Zhou Enlai (周恩來).

Liao was only 29 or 30 when he worked in Hong Kong (see image at the top of this page). After running the secret office in the tea trading firm in the late 1930s, he had a dramatic life. He returned to Hong Kong during Japanese rule to help people escape. At one stage he was captured, jailed and tortured. He survived and eventually became head of Xinhua, the news agency. The image shows him in his older years.

But going back to 1938, the Yuehua office processed large amounts of necessary military materials, drugs and medical supplies, and even blankets. It also served as a base to drum up anti-war support at international community level for China.


Zhou Enlai, 1930s. Unknown photographer

The tea company had been set up with the connivance of the British colonial authorities of Hong Kong, after a meeting between Chinese leader Zhou and British ambassador Archibald Clark-Kerr. Yet the British kept it under tight surveillance, concerned to make sure the violence in mainland China did not spill into the city.

At one stage, in March of 1939, the Hong Kong police force raided the Yuehua premises and arrested five staff. They were released without charge. It appears possible that the police had earlier detected that these tea-traders were fake, operating as a cover for some sort of political activity, but were perhaps later told that they had permission from the top to do whatever they were doing.


The Hong Kong team’s work meant that many tons of drugs, medical equipment, tents, diesel and even trucks were secretly transported to Shaanxi’s Yanan city and other war zones in Shanxi and Anhui, with the support of Chinese troops. Some materials were transported on long-haul routes from Hong Kong’s northern parts to Guangxi’s Guilin, then to Chengdu, Xian and Yanan.

The Eighth Route Army and the New Fourth Army were the main fighters on the CPC side. Public domain image.

Many people in Hong Kong were strong supporters of their mainland cousins in their battle against the Japanese, and there were regular marches and fund-raising events in the city.


The Yuehua tea firm’s work was eventually taken over by the China Defence League (保衛中國同盟), first established in June 1938 by Rosamond Soong Ch’ing-ling (宋慶齡), the widow of Dr Sun Yat-sen.

Rosamond Soong Ch’ing-ling is fourth from the left. Far right is Mr Liao. Photo is public domain.

She had come to Hong Kong in 1937, when Shanghai fell to Japanese troops, but was determined to continue the struggle from her new home. She established the League in Hong Kong to win the hearts of Chinese people in the city and overseas to support the war against the Japanese.

In 1915, Ms Soong married Sun Yat-sen. Image: Public domain.

As well as launching various fund-raising campaigns in Hong Kong, the league also collected tens of thousands of woolen blankets from Chinese nationals around the world to send on to Chinese soldiers in May 1939. She also published newsletters to drum up support for China at the international level.   

Thousands of young and courageous volunteers from Hong Kong and overseas were invited to come China to join the war. All these relief efforts and funding initiatives turned out to be crucial in the Chinese troops fight against Japanese army on all fronts.


On Christmas Day, 1941, the Japanese took over the whole of Hong Kong, which they would hold for three years and eight months.

This was bad news for many mainland Chinese intellectuals, academics and celebrities who had got themselves on the Japanese army’s list of enemies, and were hiding in Hong Kong. During the occupation, Japanese troops hunted for them in the city.

Japanese troops occupied Hong Kong in December 1941. Photo from Wikimedia Commons.

Liao had left Hong Kong by the time of the Japanese invasion but returned secretly to help operations here. He had actually been born in Japan, and spent some of his youth there, so could speak the language and knew how the invaders may operate. Liao set up a secret mission to find prominent people from China who were hiding in Hong Kong and return them over the border to safe places in the mainland.

On some occasions the Hong Kong team helped the intellectuals go to areas such as Tsuen Wan and then to Kam Tin, Lok Ma Chau, and other towns near the border, before sneaking over the fences to China. 

A Communist-led guerrilla force in Hong Kong intellectuals back to China in safety. Photo from Wikimedia Commons.

During that period, the Japanese decided to forcibly evacuate many Hong Kong people to Shenzhen as they tried to limit the city’s population. The exodus provided good cover for the team in Hong Kong to get more intellectuals back into China.

Between December 1941 and November 1942, the Communist-led guerrilla force and Liao’s team worked together to escort more than 800 intellectuals, including poet Liu Yazi (柳亞子), publisher and journalist Zou Taofen (鄒韜奮), writer Mao Dun (茅盾), and many more, back to China in safety.


During the war, Chinese troops’ resistance was much stronger than Japanese army had expected and the fighting eventually ended in 1945 with the defeat of the invaders. With the support of the Yuehua tea firm in Hong Kong, the army had triumphed.

For some people in Hong Kong, the war effort remains an indelible part of our community’s collective memory. Their sacrifice has helped the city become what it is today.

These days, the Yuehua tea company is long forgotten. At 18, Queen’s Road in Central, we find the Landmark, a high class shopping mall where goods from all over the world – including mainland China and Japan – share space together in peace.

And, yes, you can buy tea there.

Image by Manki Kim/ Unsplash

The text for this article was written by H.C. Lu and Nury Vittachi. Research materials included Hong Kong Chronicles and other sources. Image at the top is a montage from historical sources by fridayeveryday

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