Right pedigree pays off

Hong Kong businessman David Lie is a descendant of feared Manchurian warlords - and looks the part. The tall, burly Mr Lie is a member of the Zhang clan, which once ruled a sixth of China. His grandfather's brother, the late Young Marshal Zhang Xueliang, famously kidnapped Chiang Kai-shek and forced him into an alliance with the Communist Party against the invading Japanese.

Today the Zhangs form a vast extended clan scattered across the world, including dozens in Hong Kong. Although the family's fortunes rose and fell with those of Republican China, the Zhangs are back and able to trade on the memories of their former power.

"People here are always curious to meet you, Mr Lie said. "Guanxi [connections] still count a lot in China. A lot of people from the United States make a mistake in thinking that the World Trade Organisation is going to change that."

Mr Lie and his mother arrived in Hong Kong as penniless refugees in 1964 and later, aged just 20, he launched himself in business on the mainland with next to no capital. He is now a multimillionaire.

"For me, the mainland after 1979 was akin to the Wild West," he said pulling on a big cigar.

His grandfather, General Zhang Xueming, was mayor of Tianjin and head of its public security during the 1920s until forced out of power for resisting the Japanese takeover.

Mr Lie's grandfather was one of the eight sons of Zhang Zuolin, the Manchu warlord and sometime ruler of Beijing who was assassinated by the Japanese in 1928.

Zhang Zuolin's vast palace in Shenyang is being restored and his house in Beijing has been preserved but moved to Chaoyang Park where it is open as a public museum.

Zhang Zuolin was fiercely anti-communist, but his eldest son, Zhang Xueliang, is regarded as a hero by the communists. After he inherited his father's armies, Zhang Xueliang pledged allegiance to Chiang, but kidnapped him in 1936 and forced him to enter a coalition with the communists.

After fleeing to Taiwan, Chiang kept the Young Marshal under house arrest for decades. He died in Hawaii last year at the age of 103, mourned by both sides.

Mr Lie's grandmother was the daughter of Zhu Qiling, a top-ranking Mandarin appointed by General Yuan Shikai as the republic's first prime minister and who strongly opposed her marriage to the warlord's son, Zhang Xueming.

"It was a love match. They eloped, a rare thing in those days," Mr Lie said.

During the war, the couple eventually drifted back in Tianjin, still under Japanese occupation. Zhang Zueming narrowly escaped being shot after being arrested in Shanghai as a former Kuomintang officer, but fortunately he was recognised by a Japanese officer, who had been his roommate when they attended a Japanese military academy together.

After 1949, Zhang Xueming was given some honorary positions after undergoing re-education, eventually ending up in charge of municipal parks.

"Although he arrested many communists, he also let many of them go and this stood him in good stead," Mr Lie said.

Yet his grandfather was arrested during the Cultural Revolution and spent five years in solitary confinement at the notorious Qincheng Prison outside Beijing before being released in 1972 weighing a skeletal 60kg.

His arrest was linked to the case against one of his brothers, Zhang Xuesi, a top-ranking naval officer in the PLA who founded the submarine division and eventually died under interrogation in Qincheng Prison.

Zhang Xuesi was in turn close friends with Liu Huaqing, China's top admiral and later chief-of-staff. Among the other links through birth and marriage was the fact his grandfather's nephew was a private secretary to premier Zhou Enlai. This was Zhang Wenjin, later first deputy foreign minister.

As Mr Lie talks, listing names and connections, he unveils a picture of how the fate of so many of China's leading families remained interwoven despite a century of war and revolution.

Mr Lie's father, who survived the campaigns of the Mao era and moved to Hong Kong after 1979, had separated from his mother soon after his son's birth.

"We lived with my grandparents, then in 1964, my mother decided to escape to Hong Kong. I was sick, and she was sick."

First they went to Guangdong, and then to Macau where the father of Edmund Ho Hau-wah, the Chief Executive of Macau, helped them get on a jetfoil as an illegal migrant.

"I still don't know how it worked, but we went through immigration without any documents," Mr Lie said.

His grandfather on the maternal side was Chum Tung-ling, one of Hong Kong's premier red capitalists, whose trading activities during the civil war were immortalised in a several Chinese films.

In Hong Kong, Chum had made a fortune distributing goods made on the mainland and pioneering compensation trade though which manufacturing equipment was provided in return for a share of the final products.

He sent his grandson to a boarding school in Cornwall from where he went to finish a diploma at art school in England.

"Actually, I wasn't much good at sport or at exams, but it did me a lot of good," he said.

Afterwards, he started to work in his grandfather's firm, but was soon bored and decided at the age of 20 to start up on his own just as China was launching its open door policy.

"I wanted to show that I could do it, although I knew nothing about business," he said. "It was very tough at first.'

He found a Swedish company, based in London, which was interested in using him as an agent to sell its cable-making equipment in China. His grandfather, who by then was paralysed in a wheelchair, was willing to back him.

"I thought he would give HK$200,000 to get started but he wrote a cheque for only HK$10,000," he recalled, adding that his grandfather instead devoted time to explaining how to do business in China.

After his grandfather died, the family spent 15 years in legal disputes over the immense fortune left in the will.

After two years, Mr Lie had failed to make a single sale and was on the point of giving up when he managed to get four orders. That was enough to launch him, at the age of 22, on the road to making a fortune.

The company he founded, Newpower Group, has sold more than 500 production lines to mainland enterprises. His mainland investments, totalling more than US$100 million, range from gold mining, property and consumer products to private clubs and catering.

"These businesses run themselves almost. Now I concentrating on developing my consulting company, China Concept Consulting," Mr Lie said.

It has 20 employees and 250 advisers he can tap for introductions and information. In 1993, Beijing chose him to join the People's Political Consultative Conference and in 1996, the selection committee for the first SAR government.

He is hoping that many big multinationals will inquire about the mainland market after it opens up further in accordance with the rules laid out in its World Trade Organisation agreement. "Despite the regulation, it still matters that people know you personally," he said. "You need to know who to go to solve the right problem."

by JASPER BECKER  South China Morning Post    28 Jan 2002

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