One Billion Customers - James McGregor [54]
Much has been written in Chinese newspapers—the government’s propaganda machine—
that paints Lai as a devious criminal mastermind. There have been a couple of books by Chinese writers living outside of China that give a more balanced picture. And there are thousands of pages of court documents in Canada that have been generated by Lai’s extradition fight that give both sides’ version of events. My account of Lai Changxing’s saga is based on my close reading and analysis of these often contradictory materials, as well as interviews with Lai and others involved in the case. After watching corruption in China from the sidelines for many years, I’ve made my judgments about what rings true and what seems to be nonsense.
The Ditch Digger
Lai Changxing was born in 1958 in Shaocuo, one of many muddy farm villages nestled in the foothills near the coast of Fujian province in southeast China. Lai is the seventh of eight children, and his education ended after three years of elementary school when the Cultural Revolution closed China’s schools. As a teenager, he worked the family’s tiny farm plot and joined his two eldest brothers in a ditch-digging brigade at a nearby military camp. He served as an apprentice blacksmith for a farm machinery factory for two years. Lai hated the backbreaking work and he hated having bosses. He didn’t want to wear out his body and end up in a hillside grave overlooking a farm field as his ancestors had for hundreds of years.
When Deng came to power and launched China’s economic reforms, Lai seized the moment. He and four friends cobbled together the equivalent of $180 in 1979 and bought forging equipment to make car lug nuts and other simple parts. He soon branched out with his own small car parts factory. His gregarious personality and indefatigable energy persuaded other companies to appoint him as their national sales representative. As he bounced around the country on filthy, overcrowded trains, Lai smelled opportunity everywhere. Everybody in China was starting from zero in the business world, so he had the same chance as anybody to become gloriously rich. Car parts led to textile machinery parts, and then to his first big success. He illegally bought the blueprints for textile machinery from a worker at a state-owned factory in Shandong province for the equivalent of $2,500. He copied the machinery and became a market leader as China built the underpinnings of what would become its gargantuan garment export business.
But the life of a traveling salesman was exhausting and inefficient. Instead of going to the buyers, Lai decided that he would bring the buyers to him. He began to organize his own trade fairs. Buyers loved the opportunity to travel to the coast of Fujian, where sunshine and seafood were abundant. Lai also found it much more efficient to wine and dine buyers in groups instead of doing the nightly banquet circuit with individual customers in whatever town he happened to be in. By the late 1980s, Lai was churning out everything from calendars to garments to umbrellas. But what really intrigued him was the big money to be made in electronics. It wasn’t easy to get into the electronics business. Nearly all such goods were imported into China, mostly by smugglers. With its rugged coastline, Fujian had long been a hotbed of smuggling. Situated as it was directly across the straits from Taiwan, it was rigidly controlled by the military and police; success in the electronics business required good relations with military and police officials. Suddenly, Lai found his niche in life.
The state-run China Travel Service already had set up a lucrative business in duty-free televisions, stereo systems, and household appliances purchased by visiting overseas Chinese for their relatives