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sessions that usually went late into the night, Chang would sit in conference rooms adorned with Mao’s photo and brief senior generals on how the Pentagon worked with U.S. defense contractors or answer questions from senior political leaders about the details of American family life. How much was his income? Tax payments? Spending on food, medical care, and other necessities? The officials took copious notes. They were amazed. Decades of anti-American propaganda had left them convinced that in the United States the government controlled everything. Chang was not only making himself a China expert, he was becoming a trusted insider among China’s elite.

Chang returned to Long Beach to report that he had found a potential partner in government-owned Shanghai Aviation Industrial Corporate (SAIC), which had an airplane factory at a World War II–era airfield twenty miles outside of Shanghai. It had little aviation work to do. Many of the factory’s four thousand workers were making aluminum bus bodies. Chang suggested that Douglas start small, testing the ability of Chinese workers with a contract to manufacture MD-80 landing gear doors. The Chinese were befuddled and worried by the five-hundred-page contract that McDonnell Douglas lawyers drafted to seal the $1 million deal. The Shanghai factory director looked forlornly at Chang as he signed it. “I am signing this because I trust you,” he said. At the end of 1979, Chang was promoted to president of McDonnell Douglas Asia/Pacific and opened the company’s China office in two rooms of the Beijing Hotel. He didn’t move to China, preferring to commute from California.

Pounding Rivets

Formal negotiations for the larger coproduction project opened in 1979 and continued for six tedious years. McDonnell Douglas directors worried about the risks of doing business in China. After all, Boeing was selling more and more planes to China and it didn’t have production facilities there. To reassure the directors, Chang told them he foresaw China helping McDonnell Douglas cut costs by producing parts there. He also convinced the Chinese to buy five MD-82s built in Long Beach to show good faith and to give Chinese airlines a chance to get accustomed to the airliner. The initial dream of producing 125 airliners a year shrank to a 1985 contract that called for SAIC and McDonnell Douglas to coproduce in Shanghai twenty-five MD-82s that would compete head-to-head with Boeing’s extremely popular 737. SAIC held an option for twenty-five more. McDonnell Douglas would license SAIC to assemble MD-82 kits. The planes would be produced on the same production lines in Long Beach as all the other MD-82s. But before they reached the final assembly area, the nose, fuselage, wings, tail, and other major components would be crated and shipped to Shanghai for final assembly.

While far short of what had been envisioned years earlier, the agreement, touted as a $1 billion deal, was the largest commercial deal ever between U.S. and Chinese companies. It established a pattern that China would follow for decades: in exchange for market access, foreign manufacturers would transfer technology and produce at least some of the product in China. Chang was an instant celebrity. Fortune magazine dubbed him “The Billion-Dollar Man.”

The factory in Shanghai was a shambles. It had been built to produce a simple jet trainer, but now was mostly idle. The dilapidated building with a dirt floor the size of ten football fields had to be refurbished to accommodate McDonnell Douglas’s high-tech assembly line. Over a period of months the factory was transformed into a replica of Long Beach, right down to the numbered tools and safety slogans. Less than two years after the project began, the first coproduced MD-82 was FAA certified. It was, by any measure, an amazing achievement. The Chinese engineers and production workers learned quickly. Pressured by its Chinese partners, McDonnell Douglas spread its technology around, contracting for some MD-82 parts from other Chinese airplane factories.

Chinese managers gradually took over