Luring Investors : The China Connection: New Phones

Welcome to Xiamen, the direct-dial city.

This sleepy old port on the East China coast, formerly called Amoy, prides itself on having the best telephone system in China. In a nation where wrong numbers, crackling static and busy signals are the norm, Xiamen residents call overseas easily and quickly on a modern, program-controlled phone exchange.

There are no grumpy operators, no forms, no delays. People in Xiamen let their fingers do the direct dialing, all the way to Singapore, Hong Kong, Japan, the United States and countries in Western Europe. The connections are clearer than those for local calls in Beijing or for calls between Beijing and Shanghai.

Official Purpose

Of course, the fancy phone system has an official purpose. Officials in Xiamen (pronounced Sheeah-mun) earnestly hope that at least some of the callers will direct-dial their way to dollars, yen, or deutsche marks. The idea, city spokesman Wu Yiqi said, is “to assist in the basic construction of Xiamen and to attract foreign investment.”

In a sense, Xiamen’s phone system stands as a symbol of the way that cities throughout southern China are trying to make use of their ties with overseas Chinese in order to modernize.

About 7 million overseas Chinese and another 700,000 Chinese in Hong Kong and Macao come from Fujian province--more than from any other part of China except for Guangdong, Fujian’s neighbor to the south. Many of them come from Xiamen and the surrounding area in southern Fujian. Authorities would like to encourage them to send or invest money where their ancestors grew up.

Several other Chinese cities have begun to introduce international direct-dial phone systems, but often on only a limited basis in tourist hotels. Xiamen’s IDD system, bought from Japan and introduced in 1985, covers 1,500 phones, including 150 for private use in apartments or homes.

Calls to Friends, Family

Xiamen’s phone system also permits direct-dialing to other cities within China. By all appearances, Xiamen residents are making use of this service to call their friends, relatives and business associates around the country. As soon as the work day begins, the lines from Xiamen to Beijing and to Canton are tied up.

It is not clear how many new investments in Xiamen can be traced to the phone system. However, the figures show that the three main sources of foreign investment in Xiamen so far are all locations with communities of overseas Chinese from Fujian province: Hong Kong, Singapore and the Philippines.

According to Su Jinzhui, deputy director of the bureau of foreign investment for Xiamen’s special economic zone, Hong Kong investors have been involved in about 70% of all the enterprises set up with foreign capital in Xiamen. Singapore investors make up 11%, the Philippines 4.5%, and the United States 3.7%.

Su said Xiamen would like to attract more capital from the United States, Japan and Western Europe. However, investors from these countries remain reluctant to put money into a city where there is still a severe shortage of trained and reliable personnel.

Vanishing Materials

Officials at two foreign enterprises in Xiamen said they had serious problems with materials mysteriously vanishing from their inventories.

At one of the firms, Celestial Yacht Ltd., which makes pleasure boats for export, production manager David Edinburgh said the company has found that it “can’t leave anything lying around for half a day. It’s not just petty thieving. It’s important stuff--shiploads of teakwood and resin. We’d get a shipload in, $2,000 worth, and a day later, half of it would disappear.”

Edinburgh also said that after Celestial paid the costs to send some of its workers to Japan and the United States for training, at least six of them were removed and sent to work in the Chinese shipyard next door.

“Instead of us being able to use the experts we trained, they took them away to work in their shipyard,” he said.

Su, the official from Xiamen’s special economic zone, disputed the number given by Celestial, saying that no more than five people trained by the yacht firm were moved. But he did not dispute the fact of the transfer.

‘Borrowed’ Workers

“The Chinese enterprises were quite busy, so they borrowed the workers (from Celestial) for one or two months,” he said.

He said Xiamen is making special efforts to improve the supply of trained personnel for foreign enterprises.

“We have done a lot of work in these areas, but we have a long way to go,” Su acknowledged. “We were so isolated from the outside world that we cannot make everything perfect in a day.”

For the short run, at least, Xiamen may have to rely upon overseas Chinese to get the foreign capital it needs. The direct-dial telephones are merely one of several efforts that the city makes to help attract Chinese back to Xiamen.

There are even special “summer camps” where overseas Chinese, or their children, can vacation in China and thus renew ties with the mainland. (These summer camps compete with similar camps run for the benefit of overseas Chinese in Taiwan.)

Like many other cities in South China, Xiamen has a special office for overseas Chinese affairs, which helps to arrange trips home for Chinese living abroad.

Visitors ‘Seek Roots’

“Almost every group is the same,” sighed Wang Shunliu, the office’s vice director. “They want to go to their hometown, to search for their relatives, to seek their roots--and also to look for some business or trade. Many of the overseas Chinese have become businessmen.”

Xiamen’s Overseas Chinese Affairs Office is also responsible for helping Chinese living abroad to get back homes that have been improperly taken from them.

Wang said about 800 houses seized during the Cultural Revolution (1966-76) have been returned to overseas Chinese owners or their relatives. But he acknowledged that approximately 100 other houses taken from overseas Chinese in the years immediately after the 1949 Communist takeover have still not been given back.

Some of these houses are now occupied by peasants for whom there is no other housing. Others are enmeshed in legal disputes over ownership. And in a few cases, Wang said, “some landlords did a lot of bad things to the peasants, so the peasants are not willing to return the homes to the owners.”

The telephones dial like magic. but virtually everything else in this city with the fragrant, salty, Mediterranean tang seems to go more slowly. Speaking of the efforts to return houses to overseas Chinese, Wang said, “It takes much time.”