Mr. China (32 page)

I could gauge from his expression that Secretary Liu knew exactly what I meant. He replied, equally vaguely,
shi chu you yin: ‘
when something happens there is a reason’ and
told me to wait for a week. It was a classic exchange with a Chinese official. They go to great lengths to avoid any directness that might lead to confrontation and use an extreme form of
vagueness, pregnant with hidden meaning. Secretary Liu’s remark said everything and nothing all at the same time.

He ended the meeting and told me that he would instruct the Government to find out what had been going on.

Exhausted, bored and rapidly gaining weight after weeks of sitting around in Jingzhou, we returned to Beijing. I thought we should give Secretary Liu some time to clarify the
facts and come up with a solution to the land but these illusions where broken when a couple of days later Li Wei came into my office and told me that three court officials had arrived from
Jingzhou. They were looking for me. I called Lawyer Xie and he told me that I should meet with them but that I should not sign anything. He would come over immediately.

The court officials were stiff and formal and I tried to relax the atmosphere with small talk. The leader of the group, a woman, wore a green uniform with huge gold epaulettes and a large peaked
hat with badges that looked decidedly military. She got straight down to business. They told me that our joint venture in Hubei was owed a large amount of money by our Beijing office and that it
had sued us. They had come up to Beijing to seize our assets as security and they had already frozen our bank accounts. I couldn’t understand what had happened. The court officials seemed to
be telling me that we had sued ourselves and frozen our own assets. How could the joint venture sue its controlling partner? I looked at the writs and slowly the picture came into focus.

The joint venture did business with a company whose name, when translated into Chinese, was similar to ours. That company did owe the joint venture some money so Chen had found our bank details
in Beijing and filed a claim in the Jingzhou Intermediary People’s Court freezing all our assets in China. This was madness: any claim to the Court had to be chopped by the company seal. Hou
had handed all the chops over to Wang Ping at the Machinery Bureau and when I compared the chop on the court papers to the original on file we saw that it was a different chop. In China, using a
false chop is a criminal offence.

I could see that the fight was beginning to paralyse the whole of our operation, so we put a call through to the General.

The Chinese press, like that of any other country, wields enormous power. Mao regularly used it to attack his opponents within the Government as well as outside. The Government
still controls the newspapers but it has cautiously allowed wider reporting in certain areas particularly in exposing corruption or wrong doing by mid-level officials. The press has almost been
used as an informal police force by the Central Government in its campaigns to root out corruption. But it a dangerous weapon for the journalists concerned; if they attacked an official and failed
to bring him down, the journalist would be finished.

The General came in to see us. He told us that in China there are two parallel systems in the media. One system, which gives the filtered version and concentrates mostly on good news, is for
public consumption. The clearer picture of the Chinese reality is reserved for
nei can.
This
nei bu can kao
– ‘internal reference material’ – is a summary of
the unvarnished truth to be read in private by the top leaders of the country. All the major newspapers produce a weekly pamphlet for circulation to the State Council and the ministries in Beijing.
Local officials do not like their names appearing in
nei bu can kao
in connection with anything scandalous.

‘This,’ said the General, ‘is the weapon you must choose.’ Making a sudden gesture, as if to swipe something off my head, and using a reference to the formal clothing
worn by Tang dynasty ministers, he said, ‘That Old Secretary, he’ll soon back down if you try to knock off his official’s hat!!’

We put together a booklet describing our story in simple terms. The General said that we had one chance only so we had to be absolutely clear. The Chinese partner would exploit any hint of
complication in order to confuse the issue. Over the next fortnight, we embarked on a campaign of saturation bombing. Every day, for two weeks, we sent faxes to thirty or forty officials in the
Provincial Government.

Then Pat arranged a dinner with several journalists in Beijing and gave them our story. It was one of those times when his skills for explaining complicated stories were put to the test; I knew
it went well because the journalists had already heard of Mayor Shang. He had been involved in a case where some investors from Macau had lost a lot of money in Jingzhou and a lengthy and messy
dispute had finally ended up on television. They were non-committal but I was encouraged when they said that the Central Government had recently started one of the periodic campaigns to track down
cases of corruption involving government officials. We finished the dinner and they left with smiles but no promises.

Three journalists from the
Economic Daily
and the
Guangming Daily
arrived in Jingzhou the following week. Whereas we had been kicking our heels in Jingzhou for
six weeks, they managed to arrange a meeting with the Government within an hour of arriving and spent the afternoon with Mayor Shang and Chen Haijing. Chen appeared from the shadows for the first
time, apparently having staged a miraculous recovery. He gave lots of complicated explanations, but no one was taken in.

That evening Secretary Liu invited the journalists to a dinner. When I heard the news, I knew that the fight was drawing to a close. His personal attendance at a dinner meant that the Government
was seriously rattled. The General had been right. Liu was worried about losing his official’s hat.

On Christmas Day at about three o’clock in the afternoon I received a call from Chen Haijing. He had arrived in Beijing and he wanted to meet. I tried to explain that immediately after
lunch on Christmas Day wasn’t an ideal time for a business meeting, so Ai Jian went to see him instead. He told us that they’d like to settle the dispute and wanted to know when Pat
would be back in Beijing.

Two weeks later, Secretary Liu himself came to Beijing in the cold. He sat irritably across the table as Chen and I went through all the tedious details. It was a long haul, but eventually the
land went back in, Chen agreed to resign from managing the joint venture and we sent a new finance manager to Shashi who had to sign every cheque.

Several weeks later we went down to Jingzhou to tour the factory. The trip was uneventful and operations were back to normal. I noticed one of the workers who had been in the
stormy meeting with the Union, on his lathe in the little workshop. I waved at him and he returned a wide smile. It was business as usual.

In the early evening, we shook hands with the new managers and drove out of the factory. The car left the city, passing under the gateways and over the moats, winding its way through the knot of
hooting trucks and ringing bicycles. As it sped along the highway through the marshes, the sun set behind us. I looked at Li Wei and said, ‘Do you really think that Chen was ill, or do you
think the whole thing was staged to try and push us out?’

I couldn’t see his expression as he turned his face to gaze out of the window. He thought for a moment and then said,

‘Ey-aah, jiutouniao, jiutouniao!
Nine-headed birds, nine-headed birds!’

I didn’t know what he meant.

‘Don’t you know the expression? Up in the sky, there are nine-headed birds, but down on the earth there are people from Hubei!’

The saying rhymes in Chinese and has a resonance to it. It went round and round in my head. I’ve never found anyone who could really explain what it meant. But for me, the nine-headed bird
is a potent image of something strange and unknowable, with all the wildness, cunning and unpredictability that I had found in those marshlands in central China.

The fight with Shi up in the hills had revealed a powerful and explosive character. He was a man whom I couldn’t help but admire but the skirmishes with Chen had left a
very different impression. After four years in a joint venture, Shi had felt that we were hopelessly bogged down in problems at our other businesses that were not of his making. It seemed to him
that we had lost the ability to deliver on our promise; the chance to build the leading components company in China. Shi was stuck; other entrepreneurs all around him were raising capital on the
newly opened stock markets, but Shi had already sold a majority of his shares to us so that route was closed. Shi felt that we’d changed our deal, so he came straight out and told us that he
wanted to change his. This brings into sharp focus a core difference between Chinese and Western business: for a Westerner, a contract is a contract, but in China it is a snapshot of a set of
arrangements that happened to exist at one time. When he tried to change the terms, Shi’s mistake was that he underestimated our determination to fight. He hadn’t realized that we had
no option: there was nowhere else for us to go.

Shi had been upfront but Chen just helped himself to our assets. Shi had stood his ground and fought for what he had built but Chen fled into the sidelines and manipulated events from the safety
of his hospital bed. Shi had built something from nothing. Chen just climbed the bureaucrat’s ladder. In that sense, Shi’s fight was more honest.

In the next battle, the final rout with its headlong tumble into chaos, we were repulsed and forced into a tactical withdrawal. The final showdown took place in China’s capital where we
had invested heavily in three state-owned breweries.

Shortly after we bought up three breweries in Beijing, just as the sounds of celebration started to die away I received a note from Xu. It was in poor English but seemed to be
asking for ‘understanding that he had made some urgent payments while Chairman Pat was out of the country.’

Xu was the Factory Director of the Five Star Brewery that we had just acquired. I didn’t take much notice at first, but asked someone to get me a cash balance from the joint venture. I was
told that there were only a few million left in the accounts. It couldn’t be true. We had wired over sixty million dollars into the account in early February so I asked again. The answer was
the same so I called the brewery. Xu was not there, but his finance manager told me that a number of large payments had gone through the account and that there was now only five million left. About
fifty-eight million had been transferred out over the previous three days. I was speechless. How could that have happened? The signature cards lodged at the bank required signatures from our side
before payments could be made. It couldn’t be true. As I tried to understand what had happened, Pat called in from the States. After I had gone through it with him and explained that
fifty-eight million appeared to be missing, there was a long pause and then: ‘We gotta find that fucking money or it’ll be time-out from the investors!’

The beer market in the early 1990s produced a great deal of froth. Multinational brewers piled into China, mesmerized by the prospect of a billion thirsty beer drinkers. The
market was already the second largest in the world and the signs were that it was about to explode.

I knew that China had a long tradition of distilling spirits from grain and sorghum and I had been well trained by Mayor Huang in the art of weathering raucous banquets where the initial
formality quickly collapsed under a deluge of
baijiu.
In imperial times these banquets, with their elaborate drinking rituals designed to push the guests to the point of mental
disintegration, were reserved for the rich and cultured.

Drunkenness was almost considered a virtue. It was said that the best poetry and calligraphy came from artists in a state of deep inebriation. The story inevitably came up at banquets of Li Bai,
a Tang dynasty poet who wrote a thousand years ago:

His wish was shortly fulfilled when he drowned in a pond. Blind drunk, he toppled in during a conversation with the moon’s reflection. His accident was invariably billed as the ultimate
sacrifice in pursuit of art rather than as an idiotic thing to have done. Despite these ancient alcoholic traditions, beer for the masses is a recent development.

The Germans were the first to introduce beer into China at the turn of the last century when they built a brewery at Tsingtao on the Shandong coast. First tastes of the new drink confirmed the
local suspicion that the foreigners were incomprehensibly barbarian: beer was bitter, sent clouds of stinging gas up the back of the nose, and bloated up the stomach painfully before reaching the
head. But gradually it became more popular. The Russians followed shortly afterwards and in 1915 set up a brewery in Beijing called Five Star. They built a strangely-shaped oast house with turrets,
Gothic arches and a kiln for drying and storing hops. An image of the building was still used as the trademark of the beer produced in Beijing the last time I looked.