U.S. firms hope to land big contracts

August 30, 1994|By Ian Johnson | Ian Johnson,Beijing Bureau of The Sun

BEIJING -- Just his first business trip to China and Raymond Smith is already learning the language. "Yi, er, san, si, wu," says the CEO of Bell Atlantic, counting up to five.

If Mr. Smith's strategic plans come close to being realized, he may have to learn a few more numbers. Along with 23 other business leaders and Commerce Secretary Ronald H. Brown, Mr. Smith has come to China this week in hopes of making some of China's 1.2 billion citizens his customers.

It's a mission full of potential. As events yesterday showed, the trade mission seems to be paying off. While Mr. Smith did not have any major deals to announce, another company with strong Mid-Atlantic ties, Westinghouse Corp., announced a $140 million deal to build a coal-fired power plant in Jiangsu Province.

According to Mr. Brown, those contracts are just the start of a motherlode that the government can help business explore and


"I don't want a level playing field," he said. "I want a tilted playing field. I want the tilt to come from strong and effective advocacy."

But the executives' and politicians' hopes of launching a U.S. investment juggernaut may be as illusory as other waves of China fever in the past. Besides the trade and human rights tensions that bother U.S. ties with China more than its ties with other countries, corporate America still lacks the one tool that its competitors enjoy: easy access to soft loans.

The main tool for helping sway foreign countries with low-interest loans is the Import-Export Bank, but this bank has no significant war chest able to dole out the billions that are awarded by similar programs in Europe and Japan. In January, for example, German Chancellor Helmut Kohl snapped up $4 billion in contracts for German companies -- thanks to nearly $2 billion in low-interest loans.

Some business backers have also complained that Washington's new role as Big Business cheerleader is also hampered by poor planning. The mission changed its schedule several times, unnerving the Chinese bureaucrats who like to have everything set up weeks ahead of time.

For the recent visit of Mr. Kohl, planning started six months in advance. But even late last week, U.S. officials seemed unsure what they were going to have Mr. Brown do on the second leg of his tour, which starts tomorrow.

The confusion even annoyed some of the business leaders on the trip. Some of the much-touted multi-billion-dollar contract signings, for example, had little to do with Mr. Brown's visit and would have been made now anyway. But the Commerce Department urged companies to announce anything they could this week -- and then went about changing the schedule so many times that hardly anyone could figure out when they were supposed to sign and drink a toast of maotai liquor.

Still, Mr. Smith of Bell Atlantic believes the trip is well worth the trouble. Being invited to join the delegation has helped give Bell Atlantic credibility, Mr. Smith said, while Commerce officials have tried hard to arrange meetings.

Mr. Smith met with officials of Lian Tong, the new Chinese telephone company authorized to compete with the government monopoly. He said he hopes some day to sell managerial expertise and software packages to Chinese telephone companies.

"There hadn't been much contact between China and the United States for five years, certainly not on the commercial level," he said. "But things are happening in China. It's right that we're here."

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