In 1937, Hankou came under attack from the Japanese, and Pao along with 70 colleagues moved to Hunan and then Shanghai whilst leaving his wife in the relative safety of Ningbo.
It was impossible to resume a banking career and, given the prevailing uncertainties, he did not wish to commit to investing in machinery and land in Hong Kong, so Pao started an Import/Export business dealing in Chinese goods.
As his business grew, Pao looked around for suitable new ventures and in 1955 decided to branch into shipping (still focusing on assets that were not fixed in Hong Kong) and embarked on an intensive learning process.
Shipowning in Hong Kong had a poor reputation at that time with the banks and so the first vessel, a 28-year-old coal burning 8,200 tonne freighter, was purchased without finance.
The shipping business grew rapidly driven by the post war economic miracle taking place in Japan and the resulting need for freight and oil carrying capacity.
In recognition of his achievements Pao was made an Honorary Doctor of Law by the Hong Kong University in 1975, and in 1976 appeared on the front cover of Newsweek magazine with the heading "King of the Sea".
Pao and his managers were quick to spot the problem and commenced a programme to reduce the fleet, especially crude oil carriers, selling ships as they came off charter.
140 ships were sold and the fleet reduced by half over a period of 4 to 5 years allowing debt to be paid off and cash resources built up.
Although in Europe at the time, Pao and his team were able rapidly to put together a successful cash tender for shares to take his holding to 49% and securing control of Wharf.
Wharf gave World-Wide exposure to prime Kowloon waterfront property as well as ownership of Hong Kong Tramway and the Star Ferry.
In 1985, Pao was able to take control of Wheelock Marden, one of Hong Kong's premier companies established in 1857, when John Cheung sold his 34% stake to Pao for HK$2.5 billion forming a core shareholding from which to launch a bid in opposition to the bid from Tan Sri Khoo Teck Puat who had bought John Marden's 34% stake in the company.