Mr. China (5 page)

Deng was incredibly tough. It seemed as if he was made of an indestructible material, a kind of political tungsten carbide, and, by the time he emerged as China’s paramount leader, he was
well into his mid-seventies.

After Tiananmen Square, the Chinese economy had crashed and businesses everywhere faced very difficult times. Most were starved of cash as the Government tried to rein in State
lending. Whilst Deng was no liberal, he was a pragmatist and realized years before his Russian counterparts that if the Chinese Communist Party was to survive, it had to deliver the economic goods.
Tiananmen Square had shown that he would not shrink from using force, but he knew that in the longer term power grew from rising living standards rather than from the barrel of a gun. Immediately
after the crisis, the Government had slammed the brakes on the economy, but by mid-1991 Deng had had enough of the austerity and wanted to get back on track. Even though he had won the battle for
the top place in the Chinese hierarchy, Deng could not just set policy as he pleased, and when he tried to recharge the economy he faced serious opposition from the conservatives.

The battle raged on behind the walls of the Party compounds throughout the months towards Chinese New Year in 1992. After months of infighting, Deng had had enough and he decided to seize the
initiative. At the age of eighty-eight, he gave China one last shove towards further reform by grabbing centre stage from his opponents. Just as Mao had done at the start of the Cultural Revolution
when he travelled to Wuhan and swam across the Yangtse, Deng achieved a huge shift in policy by a seemingly insignificant event: he went on holiday and planted a tree.

On what is now written into Communist Party folklore as Deng’s ‘Southern Tour’, he arrived at Shenzhen Station in the southern seaside town next to Hong Kong with his family
and went sightseeing. At a theme park the next day, he planted a tree for the cameramen and repeated his old slogan, ‘To get rich is glorious.’ Proceeding regally up the coast, he
toured factories and visited the huge new development zone in Shanghai. Behind the scenes, the struggle intensified and Deng held meetings at Cadre Training Schools and Party Committees all along
the coast. He talked directly to local officials about the need to ‘guard against the left’, and pushed his agenda for greater reform.

Back in Beijing, his octogenarian opponents watched these antics in horror; they knew that Deng had deliberately bypassed all the normal Party structures and had reached out directly to local
officials. They also quickly realized that they were fighting a losing battle; the rank and file liked what Deng had to say and the tide was against them. Although it was several weeks before
anyone dared to publish the story of Deng’s trip in the Chinese press, the news that he wanted more reform and further ‘opening up’ of the economy eventually broke and by April
the country was in a state of great excitement. I remember several meetings of my Chinese work colleagues when they went off to study the latest bulletins. China appeared to be on the move
again.

Deng’s speeches that spring galvanized the whole country into action and officials everywhere set up investment zones and held trade fairs to attract foreign investors. By the end of the
year, the news that China’s growth rates were on the rise had filtered through to the world outside. The New York bankers started arriving in Hong Kong in their pinstripes and tasselled
loafers, intent on setting up offices as a launching pad into China. Specialist investment companies appeared overnight in Hong Kong, all fighting for press coverage. Barton Biggs, one of Wall
Street’s most influential money allocators, arrived in town and told the newspapers, ‘After six days in China, I’m tuned in, overfed and maximum bullish.’ In the next few
days, as his words flashed across the wires in America, two billion dollars sloshed into Hong Kong’s stock market and share prices went through the roof. Investors started to gather huge
amounts of capital to put to work on the mainland and, by the time I went back to Andersen that summer, there were millions of dollars sitting in ‘China Funds’ in Hong Kong all trying
to find a way into the Middle Kingdom.

My job was to help these investors find projects in China so the first thing I did was call up all my old contacts in Beijing. Over the next few months I shuttled back and forth between Hong
Kong and the mainland, visiting Shanghai, Wuhan, Chongqing, Tianjin, anywhere I could get a meeting with officials. Given the overall hype, it wasn’t difficult to find a receptive audience.
At each of these places, I’d go through my pitch, explaining that there were large amounts of money sitting in Hong Kong and that my job was to help invest it in China. Everyone I met seemed
keen to get in on the act and promised to introduce me to good businesses needing expansion capital. ‘If you give me a few weeks, I’ll organize a tour of all our best factories,’
they’d say. But as the months went on, and I went back on second or third visits, they just kept talking, talking, talking. It was the same old story without anything actually happening.
Endless tales like, ‘My cousin runs an aspirin factory in Jilin, and they really want to do a joint venture.’ But I could never actually get anyone to do anything. One man out of all
those I spoke to was different.

*   *   *

Ai Jian was in his early forties when I met him. He was one of the ‘lost generation’, the people born just after Liberation who were swept up in the madness of the
Cultural Revolution during their teens. The universities and schools had been closed for nearly ten years and, just like millions of others, Ai had been sent to the countryside to work in the
fields.

He was born in Jining in the eastern province of Shandong and later moved up to the capital, Beijing. His father, who was well educated, had been assigned to be the Party Secretary of a tank
factory up in Harbin so the family had moved on to the north when Ai was a boy. It was a familiar story: a comfortable, even privileged childhood blown apart by the Cultural Revolution. Like almost
everyone else of his age, Ai had been seduced by the excitement of those first heady days in the late summer of 1966, and he had joined the Red Guards.

Ai had soon been brought down to reality. After his father was targeted, the family fled back to Beijing to hide with relatives. A group of Red Guards from a rival faction travelled the seven
hundred miles back to Beijing to find him and, terrified that the whole family might be arrested, Ai’s father gave himself up. The Red Guards dragged him back to Harbin where he endured years
of humiliation and physical abuse. Ai told me that on one occasion after the Red Guards had ‘struggled’ against him for hours, his father had died.

‘He was beaten and beaten until he died on the floor.’

I corrected him gently; I knew that his father was still very much alive and well. But he was insistent.

‘No, my father actually died on the floor and he only came back when they threw a bucket of freezing water into his face,’ he said.

It couldn’t have been literally true but it was a telling metaphor and I let it ride. The pity of the Cultural Revolution was that Mao had calculated so deliberately, so callously when he
set up young people to humiliate and destroy their elders. In a society where face was everything, the fear and humiliation had literally killed thousands and thousands of older people, many of
whom took their own lives. The shame was so total that for many children, their parents had ‘died’ whether or not they happened to remain on earth.

By the late 1960s the Cultural Revolution had created such chaos across the country that even Mao feared that he might lose control. His main political rivals had been destroyed so he attempted
to rein in the Red Guards. He did this by sending them to work in the countryside to ‘learn from the peasants.’ All forms of intellectual learning were regarded as useless. Only
politics mattered and Mao had hijacked politics to regain control. The campaign to move people to the countryside quickly grew and, in the early 1970s, millions of young people were reallocated
from the towns to the countryside. Ai was one of those millions; he was sent to Jiangxian County in a remote part of Shanxi Province, a few hundred miles to the west of Beijing.

I had been to Shanxi the year before. It lies in the northern part of central China on the banks of the Yellow River where, five thousand years ago, there were the first stirrings of the Chinese
civilization. The yellow-grey loess soil there, which gives river its name, is like powder and is difficult to farm. The whole dusty landscape is pitted with deep ravines caused by rainwater
washing away the light soil over the centuries. I knew that some of the counties in Shanxi were amongst the poorest in China and that many people still lived in caves.

For four years Ai rose with the sun and slept as it set, the daylight hours spent in the fields.

‘The peasants there were very kind,’ he said. ‘But they had nothing. Nothing! They knew nothing, they had nothing, they did nothing except work in the fields.’

There was no machinery, no electricity, at times not enough food. Nothing but the prospect of another day’s hard labour in the fields. But at least Ai was removed from the political
campaigns and the incessant din of the slogans from the loudspeakers in the city. In Shanxi, free from the constant fear that he might become the next target, there was at least a semblance of
peace.

He recalled the one luxury of those years; sometimes on rainy days, if things were particularly good, he would sit inside on the
kang
with his workmates. A
kang
is a big raised
platform used as a bed for the whole family and made out of beaten earth with a primitive wood-burning stove built in. They would sit listening to the falling rain and enjoying the occasional
cigarette rolled out of newspaper.

Once a tractor came to the village, Ai remembered. ‘Some peasants from over the hill had walked ten miles to come and gawp at it,’ he said, ‘and it was all decked up in ribbons
and red rosettes. Afterwards there had been a celebration with speeches about how grateful we should be to Chairman Mao for giving us a tractor.’ But the following day the tractor went to the
next valley and the peasants walked back over the hill with their shovels.

After Mao died, life slowly returned to normal. Ai was accepted at an engineering university in Xi’an where he met his future wife. On graduating, he found a good job in Beijing.

‘The problem was,’ he went on, ‘that at that time in China you had to have a
hu kou.’
The
hu kou
was a rigid system of residence permits that made it
impossible for ordinary people to move around the country without the little red chops, or Chinese seals of approval, from the Public Security Bureau. Ai’s wife had not been able to obtain a
hu kou
for Beijing so she had to stay in Xi’an. Even in the first few years of marriage, they were only allowed to see each other twice a year, at the Chinese Spring Festival and in
the summer. It was nearly ten years before she got a
hu kou
for Beijing and for the first seven years after Ai’s son was born he only saw him for three weeks a year.

I felt that all these experiences might have hardened and embittered Ai, but, years later, as we sat in a bar in Beijing, the strongest feeling I had from him was his burning ambition for his
one son. He had a fierce hope that his son would be spared all the troubles and political turmoil that had blighted his own early life, and that China would be stable so that the next generation
would be free to use their time more constructively. Years later, his boy got a place to study in America.

After coming back to Beijing, Ai was assigned to work for the ministry in charge of foreign investment. Never the diplomat, he got into difficulties after the Tiananmen protests. The Party
apparatchiks, or ‘cadres’ as they are known, decided to muzzle him so he had been sidelined to run a business centre in one of Beijing’s hotels. It was somewhere that they thought
would keep him out of trouble.

I met Ai through a friend. She’d been pestering me to see him for months but our paths never seemed to cross. ‘If you want to get anything done round here,’ she said,
‘you should talk to Ai.’ So I eventually called him and fixed a time to meet. Dumped into a backwater by the cadres and pushed away from the action, he was in a restless, searching mood
when I found him; and as I described what had been happening in Hong Kong, he quickly latched on to the opportunity.

I knew that Ai was different from my other contacts in China when I came back a few weeks later. Whilst the others just talked and talked and made endless promises, when I met Ai for the second
time he reached into his drawer and pulled out a cardboard box full of handwritten letters. He had written twenty-six letters to his colleagues in local governments all over China. He only got
three replies, but that was enough to start.

Over the next six months, we travelled all over China in search of investment projects. At the end of each trip, I went back to Hong Kong to talk to investors. It was
frustrating work. They never quite knew what they wanted and seemed reluctant to come up to China. We found steel-rolling mills and watch factories, power equipment works and lock makers. Every
time we found something that looked promising, I wrote it up and sent it to investors in Hong Kong. But they never seemed to bite.

Eventually I managed to persuade some fund managers from a big New York investment house to come up to Shanghai. It was an important visit, so one of my colleagues, Maneksh, flew out from
London. He’d been in India and brokered a few deals so I was glad of his company.

The trip was a disaster. These bankers, still slightly jet-lagged from Wall Street, stared with disbelieving wonder at the chaotic traffic, gesticulating policemen and the waves of bicycles.
They kept checking their Rolexes, sighing unnaturally loudly and repeatedly looking through their air tickets as we sat sweltering in near-gridlock on Hengshan Road. They had sent me a fax
beforehand saying that they were interested in ‘real estate and consumer packaged goods’ so the first meeting I arranged was with the Land Bureau of the Shanghai Government.