‘Right,’ she said, folding her arms on top of the stack of papers in her lap. ‘We’ve got a bit of a tricky situation here.’ She paused, drew a breath, and looked rather intently at me. ‘It’s like this. We signed up to do the carbon deal I told you about in Quzhou. It’s about a hundred miles inland from Hangzhou. Hangzhou is down on the coast, just south of Shanghai near—’
‘Yeah, I know where Hangzhou is,’ I interrupted.
She paused and glanced at me briefly before continuing with the story.
‘Okay, so we found this big chemical factory out in the sticks,’ she continued. ‘It’s enormous – you wouldn’t believe it – something like eighty thousand people stuck in the middle of nowhere. The factory’s behind these big walls and no one can get in or out except through the gates at the front. I think most of the workers live inside. The factory makes solvents, plastics, that kind of thing, and right in the middle, there’s a reactor that makes coolants, you know, for air conditioners, fridges, and the like. The waste product from the coolant line is really bad; it’s a greenhouse gas that’s thousands of times more potent than CO2 and they’re just venting it all into the air.’
‘Well, can’t they get rid of it somehow?’ I asked.
‘That’s the point; they can use incinerators to burn up the gas, but they’re only available in Japan. We’ve signed up to buy carbon credits so the factory can use that income to get loans to buy the equipment. We both initialled the deal a month ago, but it’s huge. Our first fund wasn’t big enough to cover it so we organized a syndicate to come up with the rest of the money. We ended up with about twelve other investors. I can tell you,’ she said, rolling her eyes, ‘getting them all to agree at the same time has been like herding cats!’
‘But why would anyone want these credits?’ I asked.
‘There’s a huge new market for them in Europe and Japan. Under the Kyoto Protocol, governments have capped the amount of greenhouse gases that businesses can emit; if they go over the cap, they have to go into the market and buy up extra permits. Prices are expected to rise as the caps on emissions get tighter. Anyway,’ she said, reverting to the story, ‘they were all about to sign the formal documents, but Wang just called our rep in China and told us he wants to change the terms. Now the syndicate is wobbling and the whole thing looks like it’s about to go belly-up.’ Her nose wrinkled. ‘Fifteen rounds of negotiation, everything was agreed, and now he wants to change the deal.’
‘Sounds familiar.’
‘I was hoping you might say that,’ she said. ‘We’ve been working with a law firm in Beijing and when this all blew up, they gave us your number and said you might help.’
‘Any clues why he suddenly wants to change the terms?’ I asked.
Mina was stumped. Wang was the chief engineer of the chemical plant in Quzhou and seemed to be leading the negotiations even though he had no legal background. But there were others involved as well. She told me that there was a Mr Tang, who seemed to be deputy manager; Mr Yang, who looked after contracts; a Fang, who was in charge of the factory; and a Zhang, who did the accounts. ‘This is ridiculous,’ she sighed, pulling her hair back again, rubbing her eyes, and fumbling around with some name cards. ‘It’s just all so confusing.’
‘Anyway,’ she went on, ‘it’s Wang who’s just called and he wants to change a whole bunch of clauses. Wouldn’t normally matter, but some of them require changes to the financing. You can imagine – as soon as Wang said he wanted more changes, Winchester went ballistic. There’ve been so many different deals along the way that everyone completely lost it when they heard Wang wanted more changes and that they’d have to go back to the syndicate; they’re all terrified that the Chinese side will just walk away from the deal, find another buyer, and leave us stuck with commitments to the banks and nothing left in China.’
‘Well, I can understand that,’ I said. ‘But what do they want to change? Price? Delivery? Any other of the key terms of the deal?’
‘We just got a message from Cordelia in Beijing saying that they want to change the volume under the contract – the number of credits we have to buy – and the investors are all wobbling. There have been so many changes that they’re all starting to think that nothing will stick.’
‘Cordelia?’ I asked. ‘Who’s that?’
Mina explained that Cordelia Kong was a Chinese broker who had introduced her to the project. It seemed that she had established a strong position in the new markets out there. She’d been one of the first movers in the carbon space and had a network of contacts in the ministries in Beijing. But Mina found her to be erratic; after making the initial introductions and running a brief auction for the factory, she seemed to lose interest. She would disappear for long periods without leaving contact details and then suddenly burst back on the scene without warning. Now it looked as though she’d gone down to Shanghai on business but no one could find her.
‘She just sent a message telling us to speak to the Chinese party directly,’ Mina continued, ‘and now her mobile is off. I’ve been calling her office, but they can’t find her, either. I can’t believe it! We’re paying Cordelia a ton of money and she just disappears right when we need her. I heard some Japanese buyers are visiting the factory in a few days; they might even be there already,’ she groaned. ‘If we lose this deal, I’m stuffed!’
‘Okay,’ I said, ‘so we just need to slow everything down, put everything on hold. Try to freeze things where they are now and buy some time till we get out to Quzhou.’
We talked it through for a few minutes and figured that we should send a message out to the factory immediately. If we told Wang we were coming to visit him in a few days, it might stop him from making any final decision to go with one of the other buyers. But it was nighttime in China so we couldn’t just call him. I figured the best thing to do was type out a message in Chinese and fax it over. That way, Wang would find it first thing in the morning. So we trooped upstairs into one of the attic offices. It was crammed with people squinting into computer screens, with electric fans on each desk trying to blow the heat out of the tiny windows.
Mina introduced me to her boss, a pale, wiry New Yorker who tugged at an unruly mop of black hair as he talked about Wang. ‘There’s a standard way of doing these deals,’ he said, shaking his head. ‘I’ve done it a hundred times at Merrill. Just stick to the term sheet, keep the lawyers on a tight leash, and the deal’ll get done. The Chinese just don’t seem to get it!’ he said.
‘I’m not sure it works quite like that over there,’ I said.
‘Why not?’ he replied blankly. ‘It does everywhere else.’
I sat down at Mina’s desk and pulled over a computer but there was no Chinese software to write up a letter. It wouldn’t look right just to send a handwritten message and anyway I hadn’t brought a dictionary. I was stumped. I suggested sending a draft in English to Cordelia’s translator but there was no way Mina was going to agree to that.
‘She’s hopeless!’ Mina said. ‘Last time she dealt directly with Wang, it took a week to sort out the mistranslations.’
‘Okay, so I’ll write it in English but use Chinese-style sentence structures,’ I explained. ‘I’ve done it plenty of times before; that way the translator knows exactly how to put it into Mandarin and we’d be sure that a clear message gets through to Wang by the morning. We don’t have a minute to lose.’
Mina was sceptical but there didn’t seem to be much alternative, so I started typing and two minutes later handed her a piece of paper.
‘I know this looks a bit odd, but it’ll go straight across into Chinese, no