Mr. China (6 page)

Despite the considerable power that came from controlling land during those times of spiralling property prices, the Land Bureau was in a dilapidated building at the end of the Bund, the
sweeping avenue that looks out over the river in Shanghai. It was squeezed in among the grand colonial buildings next to Suzhou Creek. The contrast between the bankers with their highly polished
shoes and designer silk ties and the bureau officials could not have been sharper. As we were led down a corridor with enormous old-fashioned frosted-glass lampshades like Olympic torches set into
the walls, the bankers noticed a huge gash in the ceiling with lath and plaster hanging through. In the meeting room, they settled on to a lumpy sofa with their knees tucked up to their chests.
Sitting between a pale green plastic thermos flask and a spittoon, they tried not to stare too hard at the torn brown curtains flapping limply in the windows or the suspicious-looking holes in the
skirting boards. The meeting started with the Deputy Bureau Chief offering them some melon seeds to chew on and it got worse from there on in. It didn’t last long; there was no way they were
ever going to get their heads around buying up land in Shanghai.

As they left, muttering under their breath and shaking their heads, they asked what was next.

‘Er, the Rubber Bureau,’ I said.

‘So that’s consumer products, right?’

‘Kind of,’ I said nervously, not knowing quite how to break the news. I spent the next hour sweating quietly in the back of the car, hoping that the traffic would be so bad that
we’d have to call the meeting off. Then suddenly, out of the blue, inspiration seized me.

‘You know, the one-child policy is quite controversial in the West, isn’t it? But I reckon that the population here is so huge that it’d be kind of irresponsible just to ignore
it, don’t you think?’

‘Uh-huh!’

‘You know, in China, even though there’s the one-child policy, there are only seven condom factories. Amazing really, isn’t it?’

‘Uh-huh!’

‘Yeah, only seven in the whole of China,’ I went on.

‘What of it?’

‘Well, the whole condom production of China is only eight hundred million a year. There’s more than a billion people here, so there’s got to be, say, four hundred million
blokes out there all needing condoms. But that’s about two each a year. Must be a huge demand out there – if only we could figure out a way to get at it!’

‘You’re not saying-’

‘Well, you said you wanted consumer packaged goods!’

‘I do not believe we’re doing this’ they said, all exasperated sighs and rolling eyeballs. ‘I do not believe we’re doing this!’

But by that time there was little prospect of escape. The traffic was running smoothly and we were miles from the hotel. As the car drove through the gates of the Shanghai Great Unison Condom
Factory, Madame Tao, who was in charge of foreign investment at the Rubber Bureau, came panting down the steps and took us to a meeting room with a display case at the back. We stared at the
contents. The packaging was primitive: it was poorly printed in slightly garish colours and with a line drawing of a long-nosed couple – who were clearly meant to be Westerners –
embracing against a sunset backdrop.

‘What the hell’s goin’ on there?’ said one of the pinstripes.

It was a classic example of the Chinese confusion towards Westerners: on the one hand, they were a target in campaigns against spiritual pollution at the university, and on the other they were
used on condom packets to conjure up an image of something rather daring that might be secretly admired.

‘Terrible, isn’t it?’ said Maneksh, picking up one of the packets. ‘You know, Mrs Tao, you need to redo all this packaging. It’s far too dowdy. You need to make it
more exciting for the consumer. Back in the UK there’s all sorts of stuff available. Different colours and shapes, even flavours – banana, strawberry, whatever takes your fancy. Maybe
here it’d be shrimp-and-peanut flavour, or spicy bean curd . . .’

‘Er, yes, thanks, Maneksh,’ I interjected hurriedly. ‘Shall we go and see the workshops?’

The machinery that we found at the top of a rickety staircase leading to the first floor of the warehouse at the back of the factory was a botched-up Heath Robinson affair; it looked like some
bizarre homespun contraption cobbled together with bicycle parts and bits of old washing machines. There was a huge sagging rubber belt strapped between two wheels that was pulled slowly through a
tub of melted latex. On the belt, set at every conceivable angle, some of which were anatomically simply not possible, were hundreds of glass penises. As the belt drooped into the tub, the latex
coated each one with a thin layer. Weighed down by latex and by then at slightly less inspiring angles, they clanked onwards into a small chamber that had what looked like a couple of hairdryers
inside blasting away to make the rubber set. At the other side, two colossal women with beefy forearms hauled off the condoms from the legions of approaching penises and threw them in handfuls into
a plastic tray on the floor.

There was a rather frosty atmosphere in the car going back to the hotel. The next day we were due to see a pig farm but that was too much. We parted rather stiffly. It was back to the drawing
board.

After six months of searching in China but still getting nowhere with the investors in Hong Kong, I felt that we were spinning our wheels. I was beginning to lose heart. Then I
had the chance introduction to Pat that was to change the course of my life for the next ten years.

A month or so after our first meeting, I took Pat to meet Ai Jian in Beijing. We found him in his dim little office, poring over a confused mass of handwritten papers in the fading sunlight of a
wintry afternoon. He leapt to his feet as we came in and fussed over some tea for a while. Once he had settled down and Pat started on his introductions, I saw that Ai, unusually for him, was in a
state of great nervous tension. His almost anguished concentration on Pat’s every word was so intense that it looked as if something inside him might suddenly snap at any moment. He had
immediately sensed that this was no courtesy visit but a one-off opportunity that might be lost if he didn’t grab at it with both hands.

I could understand Ai’s desperation; when the ex-Red Guard and forced-peasant-turned-bureaucrat met this Wall Street banker, he already knew that the whole world had tilted in favour of
America and its overwhelming financial power. Mao’s China had never had enough money but after Deng there wasn’t even a clear political creed to cling to, or a hero to worship; just the
Great Chase of catching up with the West. Ai had sensed that this might be his one chance to get off the sidelines and out of the dismal backwater that the cadres had thrown him into. So, despite
his nerves, the first meeting went well and he was in a state of great excitement after Pat had left.

It was understandable. Pat was in a league of his own. I had come across the odd career banker who had learnt the ropes in Hong Kong, but there was no one else who was remotely as convincing
when it came to talking about financing China’s growth. Pat would talk about raising the odd hundred million and consolidating whole industries in a manner that most of us might use to
comment on the weather. This lack of pretentiousness only made his story more compelling. Years later, when recalling that first meeting, Ai had said, ‘I had spent years hoping to find a
chance to do something big. Searching and searching – and then, suddenly, it was as if a film star had walked into my life!’

Pat was an enormous personality. His blue eyes, swept-back hair and J.P. Morgan nose gave him a presence that soon dominated any conversation. He was the archetypal Wall Street adventurer, full
of the financial bravado of the 1980s when Wall Street pushed deal-size to the limit and reputations were made or lost purely on how far one dared to go. He even came packaged up with the pink silk
handkerchiefs and blue pinstripe, an ear-splitting laugh and an insatiable appetite for oysters, champagne and Cuban cigars. Late into the evenings, he would sit around after dinner in clouds of
smoke, with wineglasses strewn about the table, bantering and howling with laughter, all the time fiddling with the enormous red rubies on his gold cuff links. He knew how to have a good time, that
was for sure, and preferred an audience to a good night’s sleep. But it wasn’t just a carefully cultivated image; this was the real thing. An American icon: the steelworker’s son
risen from the bottom rung to the top of the ladder through his wits and force of personality, with plenty of guts and hard work thrown in. By the time that we met him, Pat had become a man with a
mission, a pioneer on a single-minded quest to create a machine – a machine for bringing money from Wall Street to Asia. And like me, but for a thousand different reasons, his focus was
China.

At first I was puzzled. How had this man summoned the courage to uproot himself from everything he knew? Why had he left the security of the top rung on Wall Street, with all the comforts of a
high position, to attempt another and much more hazardous ascent in a totally alien environment? He had certainly aroused my curiosity; and he had my admiration. I could see the drive and
determination, the tremendous optimism and thirst for adventure. But it seemed that the trappings of Wall Street had not been enough. I knew that Pat had money; I guessed that what he wanted next
was fame.

Pat had told Ai to work the phones. ‘I want to see every project you can find,’ he said. ‘We’ve got to think big on this one. There are whole industries
out there that need a ton of money and we’ve got to get there first. In a few months, the whole of Wall Street’s gonna be crawling all over this place, so I want power stations, toll
roads, phone systems, steel, all of that kind of stuff, anything that’s big, and I want it now.’ With that he got on a plane back to the States, and told us he’d be back in two
weeks.

While he was away, Ai called every ministry that he could think of. Although China had started reforming its system of central planning, back in the early 1990s most of the economy was still
controlled by the ministries in Beijing. The Government had a much greater role in running industries than was the case in any Western country at that time, so it was the right place for us to
start. Ai had such a brass neck that he sat for days in his dingy office, cold-calling government officials all over Beijing, pestering them for meetings. By the time Pat came back, Ai had arranged
to see officials everywhere: iron and steel, telecommunications, paper, electronics, chemicals, rubber, building materials, float glass, cement, light industry, power generation, even aircraft
maintenance.

Ai managed to dig out a black Mercedes from somewhere to ferry us around the ministries. ‘It gives us more face and that matters here,’ he said as we left the hotel on the first day
wondering what to expect. As the days rolled on, each visit seemed to merge into the next. As we sat in the traffic in the Beijing spring sunshine, moving from one ministry to another, I mused to
myself that it was amazing that government departments existed at all for half of these industries. The bureaucratic waste was absurd; a whole ministry just to administer the production of paper
and probably a major consumer at the same time. Most of them have since been abolished.

The ministries and the officials we met with all seemed the same. For days on end, we tramped around Beijing, turning down some leafy side street somewhere in the centre of town through a set of
gates with vertical white signs hanging on either side. The columns of Chinese characters showed the work units inside: black characters for Government offices, red for the Party. Then up some
concrete steps into an enormous draughty hallway with high ceilings, creaky wooden floors and spittoons outside the doorways. At the end of some fusty corridor with peeling paintwork we’d
invariably find a meeting room with rows of brown sofas draped with antimacassars and a table in the middle with a bowl of oranges, each wrapped up in crinkly cellophone. It was the same everywhere
we went. Drab colours, the smell of dust and old floor polish, high ceilings, the bowls of fruit, green plastic thermos flasks, wooden-framed windows that didn’t fit properly and the same old
frosted-glass lampshades in the shape of an Olympic torch, just like the ones in the Land Bureau in Shanghai. And at every meeting the opening line from the officials on the other side was the
same: ‘
Xingku la! Chi dian’r shuiguo.
You must be tired after your journey. Do have some fruit!’

The force of Pat’s message to the ministries seemed undulled by Ai’s translation; it was well received. He told the officials that investors believed that China was set for record
growth and would need unprecedented amounts of capital. The only place that could come up with that kind of money was Wall Street and, with his decades of experience in investment banking and his
willingness to come to China, he was the man to get it. Whoever got this money first in China would far outgrow their domestic competitors so we should grab the chance together.