As talks between the British and Chinese governments finalized plans to return Hong Kong to Chinese control, CITIC launched its CITIC Hong Kong investment subsidiary. In 1987, Yung was placed in charge of the new company, with US$30 million in startup funds. From the outset, Yung insisted upon--and received--a large degree of independence, including the ability to make local investment decisions and the ability to hire his choice of management, giving Yung a unique position among other Chinese government-controlled companies. Under Yung, CITIC HK bought large shares of two primary Hong Kong businesses, Cathay Airlines and Hong Kong Telecommunications. Named CITIC HK's managing director, Yung was able to make these and other purchases at deeply discounted prices--with China's looming return to control, Hong Kong businesses were eager to establish ties with the government. And CITIC HK offered an attractive route to China's State Council, especially once Rong Yiren was named the country's vice president.