Country Driving [30]
In a sense, foreign trade had been tough ever since the days of the Great Wall. Back then, the Chinese had closest contact with northern nomads, and the experience convinced the empire that outsiders had little to offer. This worldview survived until the nineteenth century, when it was shattered by the opium trade. In southern China, British merchants found a booming market for the drug, and at last the Qing dynasty tried to end the trade by force; the result was the Opium War of 1839–1842. Suddenly the technological superiority of the West became apparent: British warships easily defeated the Qing, who were forced to give up Hong Kong and access to other treaty ports. Over the following decades, the British and other foreigners expanded their presence in China, usually by force. For a civilization that once believed it needed nothing from outsiders, it was a traumatic introduction to the world of modern trade.
At the beginning of the twentieth century, many Chinese remained deeply suspicious of anything foreign. Initially, the automobile was criticized as yet another tool of the imperialists, but attitudes began to change as people realized the benefits of better transport. The American Red Cross road-building campaigns of the 1920s were enormously successful, and intellectuals were more inclined to welcome brands from America than Britain, whose image remained tainted by the history of opium trade. In 1924, Sun Yat-sen, the founder of the Republic of China, wrote a letter to Henry Ford, praising his company and inviting him to Asia. “I think you can do similar work in China on a much vaster and more significant scale,” Sun wrote. Ford Motors responded with a form letter—apparently Sun’s note never made it to Henry. Despite this brush-off, and despite the fact that the Chinese drove on the left side of the road, the Ford Company quickly dominated the market. By the early 1930s there were two dozen Ford dealers in China, and the company considered opening an assembly line in Shanghai.
The Japanese invasion put an end to these plans, but war presented other opportunities. In the early 1940s, when the U.S. Army sent jeeps and trucks to southwestern China in support of the Republic, they suffered an inordinate number of traffic accidents. Vehicles had been designed for the right side of the road, and American drivers had trouble making the adjustment. U.S. Army General Albert C. Wedemeyer proposed a simple solution: the whole nation of China should switch over to the American way of driving. Chiang Kai-shek, who had always depended heavily on U.S. support, agreed. The change finally took place on January 31, 1945, after the Japanese had already surrendered.
At that time, it seemed like American automakers were well positioned for China, but the Communist Revolution changed everything. Mao was aligned with the Soviets, and the United States imposed a trade embargo after the start of the Korean War. In any case, the Communist planned economy didn’t create private consumers. There was virtually no market for sedans; Chinese factories turned out trucks and buses. When Deng came to power, China’s auto industry faced the same basic challenge that characterized so much of the Reform period: How do people learn to do something completely new? From the government’s perspective, it was critical to learn from foreign automakers, but nobody wanted to relinquish profits and control of the industry to outsiders. As a result, Deng invited foreign manufacturers to set up shop under strict regulations. In order to produce cars in China, a foreign company had to find a state-owned partner, and outside ownership was limited to 50 percent.
The American Motors Company jumped at the opportunity. In January of 1979, less than a week after President Jimmy Carter formally recognized the government of the People’s Republic,