Mr. China (28 page)

Much of the dinner that night is a blur in my memory but I do remember that the whole Government turned out: Secretary Wu, the Mayor and four deputies. The
baijiu
flowed and even the
General relaxed a little, reciting poetry with a few lines missing. I sat between Chang and Shi, just in case there was trouble, but even they managed to hold a civil conversation.

Through the window we could see Shi’s old apartment and I caught him shooting several glances in that direction. He seemed happy enough, but kept moving over to sit alone on an old wooden
sofa at the other end of the room. I discovered later that it was from Shi’s apartment and that it had been moved there after he had been kicked out. At the end of the dinner, Shi gave me a
huge seal carved from red granite. I was thrilled with it so after I returned I set about to find the best seal carver in Beijing. I was given an address: The Pavilion of Accumulated Literature,
Glazed Tile Factory Street, Just South of Tiananmen Square. The woman in charge said, ‘Old Master Xu’s already stopped. He’s eighty-six.’ But she found me his apprentice. He
was sixty-seven.

He carved the chop with a poem that Shi had taught me years before. It tells of petals falling from a flower into the soil below and adding colour to next year’s growth, a poem of
sacrifice and renewal from more than a thousand years ago:

After I collected the chop, I went over the road to buy a huge red inkpad so that I could use it. The shopkeeper recognized the character style of the carver.

‘He’s not bad,’ said the shopkeeper, ‘but he’s still too young.’

I stared at him. ‘He’s sixty-seven!’

The shopkeeper just looked at me blankly and said, ‘I know.’

In the end, I found that the Battle of Ningshan drew me closer to Old Shi. He had given us no option but to fight but once peace was restored the bitterness quickly melted and
I could see my opponent as another human being fighting his corner. I liked what I saw: Old Shi, the risk-taker, the opportunist, the optimist, the showman, the loner.

The second battle was to be with a character of a very different kind in an ancient walled city set in the watery marshlands of central China.

I had already started to suspect hidden complications at our joint venture in Hubei when I heard the news that our factory director had been shot. Chen Haijing had been walking
home from work as usual one evening when a dark figure leapt from a doorway, raised a gun and fired at point-blank range into Chen’s right leg. Chen was immediately taken to hospital and
remained there for several days. Michael flew to Shashi to visit him and found him in combative spirits. ‘Give me a week,’ he said, ‘and I’ll be standing by the factory
gates as usual, watching the workers clock in, you’ll see!’

Hubei is right in the middle of China, in an area of flat-lands cut in two by the Yangtse River. The Yangtse is the longest of China’s three great rivers and the Chinese
call it just that:
Chang Jiang
or Long River. It flows from the glaciers in the west to the sea at Shanghai and forms the main connection between China’s leading business centre and
the vast central hinterlands, which are home to four hundred million people.

In the extreme west of China, the river meanders across the Qinghai-Tibetan plain in shallow, pebbly bands until it reaches the edge of the plateau and descends rapidly through winding valleys.
By the time it reaches the end of the upper section, the Yangtse has fallen more than three miles in altitude. The middle section stretches for about seven hundred miles and passes through the
Three Gorges in Sichuan down to Yichang in Hubei. As the water rushes through the gorges the sheer limestone sides tower overhead like fantastic pinnacles and dwarf the boats that churn through the
channel. In the narrowest sections, the walls seem to close in above and the eddies and currents are treacherous. The river waters there are the deepest anywhere in the world.

The Three Gorges have inspired poets and artists over the years as the dynasties rose and fell. Each gorge is said to have its own distinctive character: majestic steep crags, elegant
forest-covered peaks, fog and spray, churning currents and whirling pools. Hundreds of thousands of tourists visit the Gorges every year, but for me the next section of the Yangtse, which flows
through Hubei, inspires even greater awe.

When the waters reach the end of the third gorge, they spill out through a narrow pass into the vast open plain of central China, creating a huge system of lakes, marshes and channels. Although
the river still has thousands of miles to run, the whole region lies at an altitude of only fifty metres above sea level and in ancient times it was known as The Endless Marshlands. The river grows
sluggish and at first the landscape seems monotonous and drab. But after a time I found something intriguing about the vast tangled network of waterways, with their reeds and rushes, the dykes and
ancient bridges, the little circular islands rising from the waters with their ancient ochre-walled temples. There was something untamed and wild about the landscape and I heard that there was
still piracy on the vast network of canals. Boats hide easily in the quiet backwaters waiting to pounce from behind the tall reeds.

Although it has been used as a waterway for centuries, the river has never been mastered. Vast dykes were built along the banks to prevent flooding, but the river silts up so the huge
embankments had to be raised in height again and again. There are sections now where the river bed is three metres above the surrounding countryside. In attempting to tame the river, the Chinese
created a tyrant. Infinitely more dangerous here than in the confines of the Gorges, the Yangtse can burst its banks and inundate vast areas from its elevated position, disgorging limitless
quantities of water across the land. Every year in early summer the people of Hubei look anxiously up at the skies, hoping that the ‘Plum Rain’ would be light and burning incense to
pray that there would be no flooding.

On the northern bank of the river, in the middle of the marshes some eighty miles downstream from the Gorges, there is an ancient walled city surrounded by moats and waterways. The grey brick
walls of Jingzhou were first built in the Ming Dynasty and are over seven miles around. Even in recent times the only way into the city was through one of the five magnificent gateways that stand
opposite long arched marble bridges spanning the moat. The pavilions on the gateways, with their red lanterns, tiled roofs and upturned eaves, created a classic picture of Imperial China. The
atmosphere under the gates, where blind fortune-tellers rubbed shoulders with the persimmon salesmen, was only slightly marred by the bells ringing on hundreds of bicycles and the hooting of trucks
as they lumbered into the city.

I first went to Jingzhou in the autumn of 1993 when Pat was in the States raising the first fund. I went to visit a factory in the nearby town of Shashi. In contrast to
Jingzhou with its parapets and gateways, Shashi is a nondescript, dreary industrial town with one of China’s largest fertilizer factories as the main scenic attraction. The broad streets were
lined with plain trees and drab tenement blocks dotted the skyline around the lake at the centre of the town. There was an electrical motor factory there so I went to find out if they needed any
foreign investment.

The factory was squeezed between a department store and a hotel which looked only half built. Behind the metal gateway there was a small compound with a shabby office building. The conditions
inside were terrible. There was no heating and the offices were in need of a coat of paint. Spittoons stood at the corners of the passageways and the only light in the corridors came from
forty-watt bulbs hanging on wires from the ceiling. The main meeting room contained a semicircle of ancient collapsing sofas, with shabby beige cloth covers. There were green plastic thermos flasks
on the dusty sideboards. The man in charge of the business, Chairman Ni, kept us waiting for an hour or so. When he arrived, he seemed weary and his clothes hung loosely about his gaunt frame. His
features were those of a young man, but there were deep lines of exhaustion etched into his face. His handshake was weak and lifeless and he spoke slowly, making rather listless movements as he
gave us the history of the business.

Chairman Ni had been with the factory since it had been founded in 1965. It started as a state-owned electrical motor factory but developed into a key supplier of starter motors for petrol and
diesel engines in China. But the product samples that Chairman Ni showed me had huge heavy cast-iron casings that would be hopelessly overweight for modern engines. It looked as though we had
wasted our journey. As we toured the factory and saw the dilapidated buildings, bored workers and ancient assembly lines, I thought about cutting the visit short. But towards the end of the tour,
Chairman Ni introduced us to the General Manager of the plant and told him to take us to Factory Number Two.

Factory Number Two was located outside of town, in a field nearer to Jingzhou than to Shashi. The General Manager was much more vigorous than Chairman Ni and displayed a sure grasp of his
business as we sauntered along the walkways between rows of modern machinery.

Chen Haijing was the opposite of Chairman Ni in every way. His round, smooth face betrayed a healthy appetite and he talked excitedly, chuckling all the while, with quick nervous movements. He
was thirty-seven when I first met him; Ni was sixty-three. Chen had graduated in engineering from Wuhan University, in the capital of Hubei Province, about two hundred miles downstream. He joined
the factory, working his way up through engineering and product development before he took over the marketing. He had become General Manager of the factory two years earlier. I realized the
business might be interesting after all, so I started to take the measure of Chen.

He seemed at ease with himself as we strolled around the workshops and he answered detailed questions confidently, without hesitation or notes. He was a man of regular habits. Every morning he
waited by the factory gates at seven-thirty to chat with the workers as they clocked in. Every evening he was there to see them home. In winter he would deliberately gain weight during the cold
months and shed it again in the spring. He drank moderately and didn’t smoke. He spoke amusingly but not boorishly. His clothes were neat but not showy. In short, he had an assured manner and
an even-tempered confidence that gave the impression of understated power.

Chen told me that the designs for factory’s products had originally been transferred to China by the Soviet Union in the 1950s, before Khrushchev had recalled the advisers. In the early
years they sold these ancient electrical motors to a local truck factory up in the hills but they were now hopelessly out of date. High-performance electrical motors are complicated so Chen had
tried to get new technology from an American company. It had taken seven years of negotiations but eventually they agreed to transfer the technology. But Chen didn’t have the money to buy the
expensive new machinery that he needed. It seemed there might be a good case for us to invest. So we arranged a follow-up meeting.

The negotiations to set up a joint venture dragged on through the summer. Each time we went back to Jingzhou, the first day was wasted discussing things that we thought we had agreed during the
previous visit. In September the negotiations fell apart. We were in the process of raising the second fund and we didn’t have any time to waste. Any further interest in Jingzhou was put on
the back burner.

The following January, Chen called. He wanted to restart the talks. He said that there had been some disagreements among the Chinese parties so it had been difficult to progress the discussions.
However, he was now running the shop and he wanted to get on. By April, we had a contract and it was signed on 15 May. Our cash was wired in and, amidst the familiar roar of firecrackers, we became
the holder of a 51 per cent interest in one of China’s leading electrical motor factories.