Authors: Tim Clissold
My meetings with the managers in Zhongxi became a little more relaxed. I felt that confidence was slowly returning. After twenty years in a gearbox factory in Datong, Chang had no time for
pretty words but he knew how to work an audience. He made a speech to the whole factory and I saw him warm up as he spoke. ‘Shi,’ he bellowed, ‘the Peasant Warlord, with no law
and no heaven had boasted that he could sweep us away with one blow. But the “Seven Crushing Blows of Ningguo” have fallen and we are still standing.’
When he finished a ragged cheer went through the audience. We had survived the strike, mass defection, rubber stolen from the docks, writs, the Village Committee propaganda, confiscated
machinery and the faulty products in Shenzhen. Now it was time to counter-attack.
Chang’s speech was important; all battles in China are won or lost on propaganda. Forced to take on Shi head-on, we had to hit back, so we decided on a publicity campaign
aimed at unsettling his bankers. To get their attention, we had to come up with something big; something big enough and bad enough to frighten them away from giving him any more money.
We spent days in an upstairs room in Zhongxi Village sifting through boxes of papers, trying to come up with a case against Shi. Our eyes strained as we tried to decipher the scribbled notes of
Shi’s accounts clerks. The long hours were sometimes punctuated by a burst of excitement as someone found a particularly incriminating slip of paper. We were all absorbed in the work as we
broke open cupboards and tore through dusty boxes together. The paperwork was in an appalling state but there was strong evidence of a horror story of machines transferred out to Shi’s new
business, quantities of missing rubber and moulds, and spurious expenses. We also found further orders to transfer out a large batch of equipment on 6 December. Our dismissal of Shi on the second
day of the month had been in the nick of time.
In the end we cobbled together a claim for missing assets and damages from the non-competition agreement, more than a hundred million
renminbi
in all. It was a fantastic sum, big enough
to pull Shi under if we won. After Zhuhai we knew that many of the claims would be thrown out by a court. But that was not the point. We were playing by the Anhui rules and perception was
reality.
We lodged a court case in Beijing and produced a booklet with screaming headlines about American investors pouring millions into China’s inner provinces to help modernize industry only to
be ripped off by one of the locals. We included samples of scandalous documents and sent the whole lot to Shi’s bankers. It worked: his loans were frozen and the applications for more money
were rejected. However, with the luck of the devil, Shi had just taken a large loan from a local quoted group arranged by his friends in the Prefectural Government. He survived. It seemed as if
Round Three had been a stalemate. I knew that Round Four would be decisive.
Our legal battle slowly ground forward through the autumn and the first hearing in Beijing went well. Morale improved further some weeks later when we won two smaller court
cases in Hefei. But this, in a sense, was a side issue. The real outcome would be determined somehow from within the Provincial Government but, of course, winning the legal cases would help in the
propaganda campaign. At that point, we needed to get our message across more effectively to the top levels of the government so we found a retired General from the People’s Liberation Army to
help us. When Deng achieved ultimate power in China by resigning his offices so that others were forced to resign too, the only position that he kept was Chairman of the Military Affairs
Commission. This shows the importance of the army. Mao has often been quoted as saying that ‘political power grows out of the barrel of a gun’ but that was only part of his maxim. He
went on to say, ‘So that is why the Party must always control the army.’ There had always been some tension in that relationship, particularly when the Party started converting the
military factories up in the hills to civilian production. The army had responded by going into hotels, resorts, trading companies and manufacturing businesses, until Jiang Zemin, after a long
struggle, put an end to the free-for-all and forced them to give up their investments.
The General was right at the edge of the very small group of people who control China and he could find a way into most government departments. He was a big, stern-looking man who didn’t
smile much and rather stood on ceremony. I never felt comfortable with him; I always worried that I might inadvertently offend him. But he certainly understood business and enjoyed the odd bottle
of
baijiu
at lunchtime. After listening to our case, he agreed to talk to the Provincial Government and over time the combination of improving government relations and the relentless
pressure of the court cases started to have an effect. Throughout the following winter, Shi began to tire of the fight and, by the following spring, the decisive moment arrived.
On a lovely clear spring morning, on the way to work, Chang and Yang Bai were just about to go through the gates of the factory when a car drove up at high speed. Two men leapt
out from the kerbside. Chang and his companion were shoved into the back seat and driven off. Just before Thousand Autumn Pass, some twenty miles down the road, on a sharp bend, Chang and Yang Bai
leapt out of the car and took refuge in a local house. They found a man with a tractor and made off. Returning down the valley, they saw that the factory gates were covered with notices proclaiming
the formation of ‘The Committee for the Protection of the Investors’. It had seized control of the factory and was allegedly headed by Madame Zhao. Madame Zhao was the old accountant
whom we had hired some years before. She was a sweet old lady, a grandmother over retirement age who had spent several weeks in hospital at the time of Shi’s removal because her nerves
couldn’t take the stress. The idea that she was the mastermind behind an attempted coup was utterly preposterous.
It emerged later that the uprising had been led by a group of disgruntled managers at the jack factory where the workers had become worried about their jobs. Chang never liked the jack factory
any more than I did, and, knowing him, he might have gone too far in saying so. When he arrived back at the village, Chang had tried to go to work but he was expelled a second time by a group of
about fifty workers. He decamped to the Village Committee opposite the factory gates and waited. The Municipal Government down the valley was informed and Secretary Wu dispatched officials to try
to calm the situation. Order was eventually restored and Chang returned to his office at the end of the day. That, so it seemed, was that.
There was a group of drivers from the transportation department of a supplier staying at the guest house in the factory. They looked disreputable, drank too much and had been behaving boorishly
that night at dinner, hassling the waitresses and making offensive jokes. They had some friends with them who were much worse. Rumours spread around the factory that these people were members of
the local Black Hand Society, a feared and detested Mafia-type organization. The rumours were that Chang’s office manager had hired them to put down any further dissent. Subsequent
investigations by the Government never reached a conclusion, but at the time it was like a red rag to a bull.
The following morning, a large group of workers surrounded the guest house and forced their way up to the third floor to confront the intruders. At the door a serious scuffle broke out. The
people inside panicked and produced knives, which in turn led to calls for more workers to come upstairs. A huge fist fight ensued, resulting in broken noses and stab wounds. A knot of people
struggled up and down the stairs in a mess of broken glass, torn hair and bleeding knuckles. Nine people finished up in hospital.
The fight raged up and down the stairwells and by the time it was over there was blood all over the marble floor in the entrance hall. We had a group of people from Beijing visiting at the time
who were terrified and locked themselves in their room. Even from the inside, the noises were horrible: frightened voices and the sharp animal howling of people in pain. Eventually the intruders
fled and the rage of the crowd turned against Chang, Yang Bai and the visitors from Beijing. The doors were broken open and they were all dragged outside. Marched out of the factory gates by a
crowd of over a hundred, they were pushed and kicked the length of the main street of the little town.
The Village Committee Secretary, Madame Ye, with her pinched white face visible behind a megaphone, tried to restrain the crowd but the mob was intent on revenge. They continued over the bridge
and into the jack factory. The workers slammed the gates and the small group gathered into a knot in an attempt to avoid the blows and punches. Yang Bai seemed to be a particular target and she was
taken alone to the back of a warehouse. She has never talked about what happened there.
After a few minutes, the police arrived and Chang and Yang Bai got into the police car. Before it had time to leave, the car was overturned with Chang, Yang Bai and a couple of terrified
policemen still inside. The car was then bounced out of the factory gates.
By this time the Prefectural Government, alarmed by the serious civil unrest, authorized the use of the military and an army detachment was sent from Xuan Cheng. This news cooled down the
hotheads and the crowd dispersed. Chang escaped to the Village Committee.
Late that night, up in Beijing, Michael and I met Pat in his office and got through to the Village Committee. Chang’s voice came over the line, sounding exhausted. He said that the
violence had been an attempt to frighten us into removing him from his post. With an absent management, it would be pretty obvious who would be there to fill the vacancy. Chang was shaken and
talked in a low voice as if there were others listening. He said that his back was ‘blue and bruised’ but that he wouldn’t leave.
I heard months later that Chang had shouted at the mob in the jack factory that he would ‘rather die at his post than at home’. Wild rumours were circulating in the fraught
atmosphere saying that we had already agreed to remove him. He said simply, ‘If you support me, I won’t run away. If you don’t, I’ll go now.’ I felt a tremendous wave
of loyalty towards Chang at that moment. We had asked him to fight a battle that was not of his own making and he had put himself through fire for us. We all told him that we were relying on him
and, to his evident relief, we promised to put through a call to Secretary Wu. We left in the small hours of the morning reasonably confident that the final crisis had been weathered. It had been a
close call.
When I saw Chang a few days later, he was withdrawn. The frightening events had shattered his normal ebullience. In the end his true feelings came out: ‘It seems so
shaming to be beaten by your own people.’ He had always prided himself in winning the hearts of his employees, but up in the hills the memory of Shi was too strong. As I watched Chang
struggle with his deeply wounded pride, the unfairness of it all left a bitter taste; and all for that wretched jack factory.
After the final storm, events came neatly to a conclusion. The court in Beijing issued a ruling that Shi could not compete with our joint venture. Although I knew from Harbin that it would be
almost impossible to implement the court order in practice, it dramatically increased the pressure on the Local Government to find a compromise. In the absence of a fair solution, we could try to
blow up the whole dispute and go to the Central Government. No one wanted that.
In fact, my immediate reaction was to do nothing. We had moles inside Shi’s business so we knew that he had thrown himself into a flurry of activity, coming to Beijing to meet with his
lawyers and flying to Hefei to lobby officials. But everywhere he went the message was the same. The judgement could not be overturned. Most of the officials were wearied by this constant struggle.
They were bored with the story and suffering from battle fatigue. They told him to settle with the foreigners. They didn’t want any more turmoil.
Eventually the phone call came. Would we like to meet up in Beijing? Secretary Wu was at the Cadre Training School near the Summer Palace. Maybe we could meet up with Secretary Wu and the
General? That way we might be able to reach agreement.
Under a freezing blue sky in early December, Shi came to Beijing. We met in a hotel, on neutral ground. Despite everything that had happened I couldn’t dislike him. He
was so incorrigible, the performer who would never give up. As he walked in, head on one side as usual, he looked at me with mock surprise and said, ‘Haven’t I seen you before
somewhere?’
There were several rounds of discussions with Secretary Wu and the General acting as referees. On the third round, down in Ningshan, I remember hammering Shi on some tedious point about accounts
receivable where I had been particularly well briefed. He looked pained and walked out of the room. A minute later, a message came in; could Shi and I meet in a separate room?
We sat alone on opposite sides of the table, separated by two cups of hot water containing floating tea leaves, just as we had six years earlier. Shi gave me a cigarette and I took it. In five
minutes we had a deal. No lawyers, no minutes, just two people on either side of a table. He would hand over his shares in our business and we would drop all our claims. A small balancing payment
would be made.
That afternoon, in a haze of
baijiu,
Shi took me around his new factory. The same Old Shi was evident in the neat rows of machinery, the uniformed workers, clipped hedges and perfect
lawns. I asked him if he would come up the valley with me for a visit to the old business. On our way up, he told me that he had not even driven past the gates of his old factory for two and a half
years. He hadn’t been able to face it so it was a moment of bitter-sweet emotion when we walked through the gates together. As we toured the workshops, the atmosphere was electric. Chang had
extended the shift by an hour and the workers craned their necks to catch a glimpse of the vanquished warlord’s return.