One Billion Customers - James McGregor [77]
When engaged in disputes, the Chinese government often tells foreigners that they have “hurt the feelings of the Chinese people.” When I got back to Beijing in May, I told Xinhua officials that they had “hurt the feelings of all Dow Jones employees.” I told them I had lost face at headquarters because I had assured my bosses that the implementing rules would be delayed. As a result, I told them, I could no longer be involved directly in the negotiations; all decisions would now come from “higher authorities” at Dow Jones in New York. Now I could really drag my feet. I felt great. I was mastering Chinese negotiating tactics.
The Endgame
The negotiations, lobbying, and letter-writing campaign seemed to go on forever with little progress by either side. But in April 1997, Xinhua made a fatal mistake. From time to time, both Dow Jones and Reuters had talked about flexing our collective muscle by cutting off China’s news and data feed. Without the constant updating of our screens, Chinese traders would be left with billions of dollars in market positions and no information. It would be like suddenly going blind in a high-stakes poker game. But the idea never got serious consideration from Dow Jones. It was the equivalent of having a nuclear bomb; it gave us perceived strength, but it was a weapon we couldn’t use and still retain our credibility among traders. Reuters executives kept open the possibility of cutting off their news and data feed if China went after Reuters’s immensely lucrative foreign exchange dealing system.
For its part, Xinhua had clearly thought about simply shutting down our businesses if we refused to register. They decided to demonstrate their muscle by closing down one province. Many of our customers had been installing satellite dishes without bothering to get licenses. In Guangdong, a dispute between the provincial Department of Radio, Film and Television and the Radio Management Committee over which agency would collect fees for satellite dishes resulted in a survey of rooftop dishes. Xinhua got the locals to prod our customers to show proof that they were legally registered with Xinhua. The deadline was May 30. One month later, according to the official notice, those who weren’t registered would be “penalized.” Xinhua officials told us this meant that Dow Jones and Reuters customers in Guangdong province would have their satellite dishes confiscated and thereby their signals cut on June 30, 1997, unless they were registered with Xinhua.
The Guangdong threat was part of a carrot-and-stick strategy Xinhua launched to try to force our hand. The carrot that the agency offered was to drop its demand to collect management fees from the foreign news services, which had originally started out with Xinhua seeking 40 percent of our revenue. All other regulations, Xinhua said, “will be rigidly enforced.”
Now we had them.
Consumed as it was with internal political maneuvers, Xinhua apparently never lifted its head to look at what else was happening on June 30. At midnight on June 30, 1997, the British government would hand Hong Kong back to China. Some five thousand journalists were gathering in Hong Kong, many of them looking for stories to illustrate how China would