Strange Stones: Dispatches from East and West (P.S.)

by Peter Hessler

  Tony said, “We built a factory outside of their factory, just to fix every car that came out. And in the States the car was selling so fast that dealers charged three thousand over the price, which was thirty-nine hundred.”

  Bricklin said, “GM moved up Saturn into a more expensive market niche, because of the Yugo. And the quality was starting to get better. We were selling a lot of cars, and we were getting a lot of acclaim. Three years later I sold out my share. And then the war started. Now everybody says that the Yugo was a failure.”

  The Guoxin Hotel, like everything else in this part of Wuhu, was brand-new. The bookcase of the executive lounge had been filled with books the way you would stock a freshly dug pond with fish. There were twelve copies of Harvard Marketing Management in Chinese and ten copies of M.B.A. Harvard Business School Management Encyclopedia.

  Bricklin said, “We’re not bringing in a cheap Chinese car. We’re bringing in cars of value and selling them for less. A twenty-thousand-dollar car will go for fourteen; a thirty-thousand-dollar car for twenty. We’re talking about 30 percent of the market.” He shifted restlessly, eyes flashing. “I see the similarities with Japan,” he said. “In 1968, it was the turning point—where people’s perceptions of Japanese products shifted from cheap to good quality.” He continued, “What the Japanese took twenty years to do, the Chinese can do in five.”

  A couple of days before Bricklin and the others had arrived in Wuhu, I had driven there from Beijing. The journey was eight hundred miles; I rented a Chinese-made Volkswagen Jetta and took my time. The road passed through Confucius’ hometown, and it also went by the Stone Warriors of Nanpi, the Iron Lion of Shijia, and the Alfalfa Land of Jinniu. I drove past the Dongguang Iron Buddha and the Wuqiao Acrobatics World. All of them were advertised by big signs that promoted the local specialty. The village of Jinxiang had erected a huge billboard that said, in English: “The Best Garlic Is from Jinxiang in All of China.”

  The highway was excellent—four lanes, groomed medians, well-marked exits. Some sections were so new that they still appeared on my map as broken lines. The Chinese expressway network had doubled in length in the past four years, and recently the ministry of communications had held a press conference to announce plans to add another thirty thousand miles. When asked about the purpose of the new roads, Zhang Chunxian, the minister, mentioned Condoleezza Rice’s visit to the People’s Republic during the previous year. Apparently, Rice had told a Chinese official about the fond memories she had of summer vacations spent traveling in the family car. “She said those trips helped her love the United States,” Zhang explained. “By building expressways, we can boost the auto industry, but that’s only a small part of it.”

  Along the way to Wuhu, I drove past miles of shiny new billboards; they were as blank as unplugged televisions, waiting for advertisers to figure out what kind of consumers might someday pass this way. In recent years, increasing numbers of urban Chinese had purchased automobiles, but it was still rare for them to take long trips, because tolls were high and drivers inexperienced. Most of the other vehicles on the road were transport trucks. That was the first stage of a Chinese highway: first they moved objects, and later the people would arrive.

  The truckers worked in teams of two or three, so they could drive in shifts around the clock. They followed regular routes, and they owned their rigs; any delay cost money and they ate fast at roadside restaurants. Every night, I stopped for a meal and whatever conversation I could catch. Occasionally, I met a trucker with a poetic streak—one man described his trade as “the thermometer of the economy”—but usually we had just enough time to establish the basics before they rushed back out to the parking lot. One pair told me that they had a truck full of bamboo whisk brooms; they had just dropped off a shipment of nonferrous metal. Another pair had unloaded color televisions and picked up processed wheat. These were the alchemists of the new economy, at the center of every mysterious exchange that occurred along the Chinese highway system. One pair of truckers had just dropped off computerized mah-jongg sets and picked up elementary school textbooks. Another team had exchanged radiators from Hangzhou for chemical materials from Shijiazhuang. Shoes from Wenzhou; electric generators from Changchun. Coal from Datong; train parts from Wenzhou. Nobody drove an empty rig.

  In the city of Qufu, I pulled over at the Confucius family cemetery. The local government had turned it into a tourist attraction, with signs posted at the highway exit, but my car was the only one in the lot. The cemetery sprawled through a big forest; for more than twenty centuries, local men with the Confucius family name—Kong—had been buried here, along with their wives. The numbers were staggering: a hundred thousand people had been laid to rest among the cypress trees.

  I wandered aimlessly, looking at tombstones. I saw one that dated to the late Ming dynasty and the sixty-second Kong generation; I took a few steps to the next memorial and skipped three hundred years: 2001, seventy-fourth generation. I was on my way to another tablet when I heard wailing. I followed the sound, picking my way around the tombs.

  A group of women cried and kowtowed beside a mound of fresh earth. They had arrived on a Taishan 200 tractor, which had three wheels and a two-stroke engine. The tomb offerings were simple: oranges, apples, a boiled chicken. The men stood nearby, watching, and one of them offered me a cigarette. He told me that they were burying a woman who had been married to a member of the seventy-second generation of Kongs. The wailing continued for ten more minutes and then it stopped as abruptly as if a meter had run out. Two women came over to chat; they asked me what American funerals were like, and what my salary was, and if it was true that people in the States could have as many children as they wanted. I told them that I was of the fifth generation of Hesslers in America. A man crank-started the tractor and they puttered off into the mist. They left the chicken but packed up the oranges.

  Nearby, the stone memorial above Confucius’ tomb was still cracked from the vandalism of the Cultural Revolution. A tour guide said that Red Guards had excavated the grave and found it empty. He smiled when he told the story; I couldn’t tell if his point was that the vandals had been thwarted or that Confucius had never been buried here in the first place. When I left, the parking lot was still vacant, and so was the highway. The only difficult moment of the trip occurred south of Tianjin, where traffic suddenly slowed and swerved, because drivers were distracted by hundreds of pamphlets that flapped above the road like dying birds. I pulled over and caught one. It was in English: a fourteen-page mortgage application for Woolwich, a financial-services company in Dartford, Kent. Apparently, a truck full of imported recycled materials had come unlatched on the road. There were thousands of the forms, fluttering in the air and skidding beneath tires, and they were as blank as all the billboards.

  There were pieces of cars scattered everywhere around the world, and Malcolm Bricklin tried to find ways to connect them. He searched out bankruptcies and remote factories, because this was often where the opportunities could be found. One morning at breakfast, I asked him to explain in more detail how he had come to Wuhu.

  “Three years ago, I got a call from a contact in Yugoslavia,” he began. “He asked if I would please come and see them, because they wanted to give me a factory. This is a factory that NATO put five missiles in. We went there and spent a year. But the problem was that they have all of these workers, and what do you do with those employees while you’re fixing the plant? Then the prime minister got assassinated, and we said, We’re too old for this.

  “We went to Romania, where there was a Daewoo plant. But it was the same problem—what do you do with the employees? We went to Poland, great place, a fabulous Daewoo factory. They were selling engines to the Ukraine. Don’t ask why. Same problem, though—all these employees. But they introduced us to MG Rover, which was interested in working with the Poland plant. There were too many uncertainties, though. We went to Tata, in India. Really nice people.”

  “Very nice,” said Tony Cim
inera.

  “We go to see the factory, and the factory is OK,” Bricklin said. “It’s not state of the art. They have one model coming out, and they are oversold. We’re trying to figure out which pieces of the puzzle make sense. A Russian we had met, he had come to us for engines to sell to Central America. He said, Why aren’t you going to China? I said, I don’t feel like another trip. He said, You ought to go see them, they are really smart, really aggressive. Then he said, They’re right in Shanghai, why don’t you go see them? We decided to do it. And then right before we left, he said, Oh, you’ll have to take a train to the town. Thank God he lied. So we arrive and take a train to Wuhu, and it’s completely packed; we’re sitting like this for five hours.”

  For the first time all morning, Bricklin is motionless—he pulls his arms close to his body and freezes, as if pinned between other passengers. Then he jumps back to life: “They took us to see the plant, and we were blown away. I pull out a letter of intent and hand it to them. And then we spent seven hours dealing with that. They said they wanted to build a relationship; I said I’m not flying back and forth to build a relationship. That night we met the president for dinner. Everything he was telling us was exactly what you’d want. So we signed a letter of intent. It took forty-eight hours to do the letter.”

  There was a time when the Chinese elite disdained business. Traditional Confucian values meant that any educated person scorned the merchant class, and emperors rebuffed the first Western attempts at trade. But the British were determined to buy tea and sell opium, and they were willing to fight to do so. In 1842, after the first Opium War, the Chinese were forced to sign the Treaty of Nanking, which opened five cities to British trade. It established a pattern: if the Chinese weren’t willing to open their markets willingly, you could always find a pretext and turn to violence. In 1858, after more fighting, the Chinese agreed to designate ten more ports for foreigners. In 1876, after a British consul was murdered by tribesmen in western China (he was scouting possible trade routes to Burma), the Qing government agreed to open four more treaty ports; and one of them was Wuhu.

  The city sits on the east bank of the Yangtze, in the landlocked province of Anhui. In the late 1870s, the British built a pillared consulate on a hill above town, and beside the river they set up a customs house, where opium was processed. French Jesuits constructed a church; the Spaniards ran a Catholic school. American Protestant missionaries built a hospital. And then the twentieth century brought a new series of events—the fall of the Qing dynasty, the Japanese invasion, the Communist revolution—and the foreigners disappeared from Wuhu. During the decades of the Communist planned economy, the central government invested little in the region.

  After 1978, when China entered the period known as Reform and Opening, one of Deng Xiaoping’s key strategies involved export-processing zones—designated areas that encouraged foreign investment through special tax rates. Many of these early zones happened to be located in the former treaty ports, and like the old days, they appeared in waves. In 1992 and 1993, after the earliest zones like Shenzhen had thrived for more than a decade, the central government approved thirty-two more. One of them was Wuhu.

  The city was a latecomer to the new economy, and it was relatively remote. There was no distinctive local product of real value. During the 1980s, Wuhu had briefly become known for producing a brand of sunflower seeds known as “Idiot Seeds” (it rhymes in Chinese), and that was even worse than getting stuck with Alfalfa Land or the Best Garlic in All of China. Wuhu’s leaders wanted a genuine core industry, and they sensed that their obscurity could actually be an advantage in a heavily regulated industry like car manufacturing. Since the 1980s, foreign automakers had been allowed to form joint ventures with state-owned Chinese partners, with foreign ownership limited to 50 percent. The government’s goal was to build an industry quickly, learning from the foreigners while maintaining control. (In China, nobody forgot the humiliation of the treaty ports.) Companies like Volkswagen and General Motors joined with Chinese partners, manufacturing foreign-brand cars while farming out parts production to cheap China-based suppliers. For a time, the strategy was extremely profitable for everybody, in part because the strict government controls limited competition.

  In Wuhu, though, the officials quietly skirted the regulations. They recruited Yin Tongyao, an Anhui native and a trained engineer, who had been a rising star in one of the joint ventures with Volkswagen. Yin had helped move some of the tooling and equipment of a failed VW plant from Westmoreland, Pennsylvania, to Changchun, Jilin. In Westmoreland, the factory had produced Golfs and Jettas. In Changchun, they used the same platform—the car’s basic frame and major components—to build a Chinese version of the Jetta, which eventually became the best-selling car in the country.

  Yin left Volkswagen to become the vice president of Wuhu’s new company. With funding from the local government, he bought manufacturing equipment from an outdated Ford engine factory in England and shipped it to Wuhu. Next, he went to Spain, where he acquired manufacturing blueprints for a model called the Toledo, which was being produced by a struggling Volkswagen subsidiary called SEAT. The Spanish car used the same platform as the Jetta.

  In secret, Yin built an automobile assembly line in Wuhu. National regulations forbade new auto manufacturers from entering the market, so the officials in Wuhu named their enterprise an “automotive components” company. The first engine came off the line in May of 1999. Seven months later they turned out a car. It used Jetta parts, acquired from suppliers who were supposedly exclusive to Volkswagen. VW was furious, and so was the central government.

  But this was a common strategy in the Reform era: push the boundaries first, then ask forgiveness. For more than a year, Wuhu’s officials negotiated with the central government, finally receiving permission to sell their cars nationwide in 2001. (Reportedly, Volkswagen accepted a financial settlement and decided not to sue.) In Chinese, they named their company Qirui, which has connotations of good fortune. It’s pronounced a little like “cheery,” but the English name was spelled without the second e, to indicate that Chery would always be one step removed from the complacency that comes from happiness. By 2004, Chery was selling almost ninety thousand vehicles a year.

  When I met with Chu Changjun, the Party deputy secretary of the Wuhu Economic and Technological Development Area, I asked why Chery hadn’t followed the proper channels for establishing a car company.

  “It’s like having a child,” he explained. “First you have a child, then you register him. We did it the same way: First we made the cars, and then we registered to make cars.”

  Chu was joined by He Xuedong, the deputy director, who added, “If you apply in the traditional manner, you’ll end up waiting for years. During that time, the opportunity may very well pass you by.”

  We were in the development area’s new Investment Services Center, whose marbled lobby was big enough for two badminton nets to be stretched side by side. Some cadres had a pretty good game going when I visited during lunch break. Chu and He gave me a stack of promotional materials in English, which included the mottoes “An Oasis for Investors” and “Investors Are Our God.” One sentence read, “In Wuhu, we have high-quality human resource with low cost.” The next sentence discussed electricity, water supply, and sewers.

  The development area was north of town, on the banks of the Yangtze. With Chery as an anchor tenant, Wuhu had already attracted more than a hundred manufacturers, and new plants were going up all the time. Many of the factories had been moved from the southern coast, where costs and wages had increased during two decades of strong economic growth.

  One afternoon, I visited Baoshun Road, in Wuhu’s second factory district, which was lined with plants in various stages of construction. Empire Hill planned to start production the following month (air-conditioner electrical parts); Shuncheng Electronics was about to add another hundred workers (air-conditioner wiring). Century made four thousand plastic air-conditioner covers a d
ay. At the Wuhu Shijie Hardware Company, when I asked about their products, the gatekeeper opened a desk drawer, grabbed a handful of shiny new nails, and tossed them down like dice. A pretty young woman appeared and handed me a business card that read “Merry Yeh—International Trade Dept. Manager.” Merry served me tea in an upstairs office, where a plaque commemorated the company’s cooperation with National Nail Corporation (“More Than Just Nails”) in the United States. Wuhu Shijie produced sixty tons of nails a day. Three hundred and forty workers. Eighteen thousand square meters. Any other questions?

  “Where did you get your English name?”

  “I named it after Merry Christmas!”

  Downtown, the old British consulate had been converted into the local Communist Party headquarters, and the Spanish missionary school had been turned into a technical college. For years, the former customs house, which once processed opium, had served as a kindergarten, but now it was abandoned. You could still see the faded Cultural Revolution slogans that had been painted vertically onto the hated symbol of British gunboat diplomacy. But small-time traders had erected wooden structures around the base, cutting off the slogans:

  Chairman Mao’s Writings Are—

  In the Midst of Struggle One Learns—

  One afternoon, an American named John Dinkel drove a Chery T-11 prototype out into the Wuhu development zone. Visionary Vehicles had hired Dinkel as a technical consultant, and his specialty was road testing. “You find out how good a car is when you do bad things,” he told me, as we pulled out of the factory. Three young Chinese test engineers sat in the back. None of them wore seat belts.

  The T-11 was a sport-utility vehicle, which eventually would be released on the Chinese market as the Tiggo. It looked suspiciously similar to the Toyota RAV4. Dinkel also planned to test a new crossover wagon known as the B-14, which was scheduled to hit Chinese dealers later that year. Chery was upgrading its domestic product line, in part to prepare for more demanding international markets. The cars destined for the United States were still in the early design-and-development stage, and one of the most formidable hurdles would be meeting American safety and emissions standards. Even though the T-11 and the B-14 wouldn’t be exported, Dinkel planned to evaluate the quality while showing the Chery engineers how Americans road-tested vehicles. He had asked me to come along and help with translation.