I told Chen that I thought it was a pity that progress was so slow on such an important project. Perhaps there was some misunderstanding between the two parties; of course, if he had any suggestions, we would take them very seriously. He was cautious at first and just said that we should continue to talk with Wang. ‘This is a big project,’ he said, ‘so Wang reports directly to General Manager Gao.’
‘Manager Gao.’ I said. ‘I thought Tang was in charge.’
‘Gao is the head of the Shanghai listed company and he pays great attention to this project,’ said Chen.
‘So what does Gao think we should do?’ I asked.
Eventually Chen came to the point. ‘It’s all about the second line,’ he said. ‘Old Gao needs you to take in the second line.’
‘The second line?’ I asked.
‘Mina will know what I mean. Old Gao just says that the second line has to go into the contract.’
‘Well how about price, payment terms, all the other clauses?’
He just pursed his lips and the conversation drifted away. But at least we had the first clue.
I went out to look for Mina and found her sitting dejectedly in the lobby, sipping on a tall glass of chrysanthemum tea. When I told her what Chain-smoking Chen had said, she knew immediately what he meant. Inside the chemical plant at Quzhou, there were two separate production lines. At the start of the negotiations, Mina had tried to get both of the lines into the deal so that IHCF would get the maximum number of credits, but Wang had refused point-blank. The second line was huge; Mina told me that every year it spewed out gases with the equivalent warming effect of nearly five million tons of carbon dioxide. There had been weeks of discussions in the spring, but Wang wouldn’t be shifted and he refused to put the line into the deal. Eventually Mina figured that the carbon from the second line must have been sold to another buyer, so IHCF organized the syndicate to include only the credits from the first line. But now it appeared that Wang needed to reverse his position.
When Wang returned, we raised the issue directly and probed every way we could think of to avoid increasing the number of credits under the contract, but Wang was adamant. His position seemed to have become fixed and he was insistent that IHCF bought the credits from both lines. I switched into Mandarin and tried to persuade Wang to be more flexible. Whenever I asked him why he couldn’t just sell the second line to another buyer, he just said that it would be too troublesome to separate the two. But this made no sense; only a few months earlier, he’d been insisting on the opposite. Mina tried every idea we could think of – taking an option on the second line, cutting the carbon streams into two parts, taking some now with smaller amounts later – but Wang wouldn’t budge. It seemed as if we’d reached deadlock. I became more apprehensive about the phone call to London as the minutes ticked by and we failed to get to the bottom of the story.
At the allotted time, we trooped down the hallway to the little pantry next to the elevators. Mina swore under her breath as she tripped on one of the bumps in the carpet. Bizarrely, the pantry had a fixed line phone with a speaker where we could take a conference call in private. There was no line out, but the phone could accept incoming calls through the switchboard downstairs – but the call didn’t come in on time, so we sat there and waited in silence. The water boiler for tea was still steaming gently on a Formica-topped table in the corner, so it was stiflingly hot and as damp as a sauna. On the wall above the boiler, condensation was dripping down the glass frame of a famous photograph of Chairman Mao relaxing with a cigarette on top of Mount Lushan in a large wooden deck chair. As I leaned over the phone, I felt droplets of sweat gathering on the end of my nose. After a few more minutes, I called down to the operator only to discover that a foreigner had called several times earlier but she couldn’t understand what he wanted and hung up. I asked her to transfer the next foreign-language call up to our extension and after another few minutes we were connected. It wasn’t a good start; the receptionist had already put the phone down on Winchester several times, so he was spluttering with irritation before we even started.
Mina kicked off with a summary of the last few days while I sat on the edge of the table and listened. Once she had finished, I leaned down towards the phone and explained that the Chinese side seemed very fixed on putting in the second line. But Winchester was having none of it.
‘We went through all of that in March,’ he said. ‘We’ve closed the syndicate on the basis of this first deal. We can’t just go back and ask for more money; it would completely ruin our credibility.’
‘Well, perhaps we can do something less formal with the second line and get around it that way,’ I said.
‘What does that mean?’
‘Maybe we can stick to the existing deal for the first line and do something a bit vaguer for the second.’
‘Vaguer!?’
‘Well, often Chinese parties reach slightly vague agreements while they figure out what they really need to do. It’d buy us a bit of time. We can sign up the first line and do something less formal on the second.’
‘Less formal! Vague! Have you completely lost your mind?’ he raged. ‘We’re dealing with some of the biggest institutional investors in Europe. They’re not going to botch together some hare-brained scheme just to keep the Chinese happy. Less formal!’ he snorted. ‘The directors would all have hernias!’
After a few more minutes of haggling, we were instructed to go back to Wang and tell him that the deal had to stay the same. But when Mina explained it to Wang, he just replied calmly, ‘Bu xuyao tan le’ – no need to discuss then – and quietly gathered his papers. We protested, of course. Why couldn’t he just sell the second line to another buyer? We waved our arms in the air and threw papers onto the table; we pleaded and cajoled; we used flattery and promises, threats and excuses, but they were all useless. Wang just stood up and calmly left the room.
When we managed to get through to London to report this latest development, a jumble of voices burst furiously from the speakerphone in front of us, all demanding that the Chinese needed to go back to the original deal. When the clamour died down, one of them said, ‘You’ve just got to go back in there and tell them that they have to go back to the existing agreement.’
‘But we’ve already done that three times and Wang won’t agree.’
‘Do it again. Just insist on it. Don’t they understand that this sort of behaviour will ruin their reputation in the City?’
‘What!’
‘It’ll ruin their reputation in the City.’
‘Right,’ piped in a second voice. ‘Deutsche Bank is underwriting the whole deal!’
‘I shouldn’t think Wang has ever heard of Deutsche Bank before this deal!’ I said.
‘What?’
‘Yeah,’ Mina added. ‘Wang just told me he needs to show a copy of Deutsche Bank’s certificate of incorporation to the local Commercial Bureau here in Quzhou. They want to check out they’re real.’
After a brief moment of stunned silence, a sort of strangulated yell came out of the phone. ‘Anyone who hasn’t heard of Deutsche Bank is a cretin! Don’t they realise that Deutsche Bank was founded under the Treaty of Augsburg?!’
After a brief moment to gather his wits, another one said, ‘They must be out to stiff us. We spent months arguing about that second line in March and they wouldn’t put it in. This has to be about price or something.’
‘Yeah, or perhaps they’ve closed the factory? I read somewhere last week that everyone’s stopped buying fridges in China.’
‘What?!’