One Billion Customers - James McGregor [72]
It wasn’t long before Guo Chaoren, the president of Xinhua, found himself before the State Council, explaining and offering self-criticism. Guo, whose given name translates as “superman,” had significant political clout as a member of the Communist Party’s central committee but no understanding of financial markets. He had made his name as a reporter extolling China’s suppression of the Buddhist rebellion in Tibet in 1959. Now he told the State Council that the directive was intended to protect China from American cultural domination, which he said might make the Chinese forget their heritage. The State Council said they supported Guo’s goals but ordered him to fix the problem. That was easier ordered than done. Guo couldn’t simply cancel the decree. The loss of face for him, for Xinhua, and for China would have been intolerable. But as he found over the next two years, enforcing the decree wasn’t much of an option, either. Both Dow Jones and Reuters had determined that they were neither going to tremble nor obey. The battle was on.
Divide and Conquer
Typically, China’s bureaucrats bring an industry to heel by dividing and conquering. Sure enough, at my first meeting with Xinhua officials to discuss the new rules, they said that Reuters was the real target. They complained that Reuters had too much market share and that Reuters’s news service carried much more political news than the Dow Jones service. It was probably true that Reuters was their principal target. The company had a gold mine in its foreign exchange terminal, through which 60 percent of the world’s foreign exchange transactions took place. Chinese bankers were snapping up those terminals as fast as Reuters could install them.
What the Xinhua officials didn’t know, however, is that Reuter’s China boss, a gentlemanly and intelligent British Sinologist named Richard Pascoe, was one of my closest friends. Both Richard and I were journalists in China before taking over the business side of our respective companies. As a journalist, you see a dark side of China that is usually hidden from foreign businesspeople. We had been forced to live in diplomatic housing compounds where our phones were tapped and our apartments bugged. Our secretaries, translators, drivers, and even our children’s baby-sitters were foreign ministry employees who were required to report on us. In tense times, people we talked to casually on the street were hauled in for questioning. Whenever I took a reporting trip outside Beijing, I was followed by a dozen or more plainclothes agents. The frustrations of living under such circumstances probably added fuel to our urge to fight Xinhua. I was much more emotional and angry than Richard as the battle began. One day I pitched a fit about a particular Xinhua official who was both duplicitous and arrogant. Richard told me to relax and put the matter in perspective.
“Jim, you have a car and driver,” he said. “You live in a big house and take vacations in Thailand. These guys ride bicycles to work in the morning and they live in shitty apartments owned by Xinhua.” I was much less self-righteous after that.
There was a temptation among Dow Jones Telerate executives in Hong Kong to cooperate with Xinhua and knock Reuters from its dominant market position. However, the idea was immediately vetoed. Both Peter Kann, Dow Jones’s chief executive, and Reuters’s CEO, Peter Job, believed that taking a stand against Xinhua was vital to both companies’ global business interests. Kann and Job were both former journalists