Doing Business : How Beijing Changed for Those Who Stayed : The June massacre put a damper on U.S.-China trade. For one Rockwell executive, it’s meant new challenges in an already difficult market.
Robert Yeager fled Beijing reluctantly last June, after Chinese soldiers crushed pro-democracy protests centered in Tian An Men Square and shot at foreigners’ apartments.
“I left only because the U.S. Embassy advised all American citizens that the situation was now, to quote their words, ‘life-threatening,’ ” Yeager, Rockwell International’s chief representative here, recalled in an interview at his 21st-floor office in the China World Trade Center.
Virtually all Americans except diplomats and journalists were gone from Beijing by the time Yeager’s flight touched down in Hong Kong.
But after just four days in the British colony, Yeager, 56, who has been based in Beijing since 1978, decided that the situation ad stabilized enough. While many other foreign business people took summer vacations or waited longer outside China, he returned to Beijing.
“I was the first one to come back, and all my Chinese customers were just delighted to see me,” he said. “I think it was good from a business standpoint.”
In the months since the violent June 3-4 crackdown, Washington and Beijing have traded harsh words, with the United States imposing economic sanctions, including a ban on military sales, and China condemning this as interference in its internal affairs.
Of approximately 160 representative offices of U.S. companies in Beijing, no more than four or five have closed down operations and departed. But dozens have cut back staff levels, sending some expatriates back to the United States or Hong Kong. Those most affected include companies exporting consumer products to China and those involved in military sales.
Rockwell, too, has lost potential military deals worth about $20 million as a result of the downturn in Sino-U.S. relations, Yeager said.
“We had not done any military sales, but we had been romancing the PLA (People’s Liberation Army) and were very close to getting business from them when June 4th happened,” he noted.
But the El Segundo-based firm has traditionally provided China with items such as printing presses, aircraft avionics and industrial automation equipment, and such non-military sales held steady last year at about $50 million, Yeager said.
The gray-bearded Rockwell representative, whose appearance and soft-spoken but confident manner remind one of a university professor, said that little has changed in his daily work routine.
“It’s absolutely the same--as a matter of fact, it’s a little better for us,” he said. “They (the Chinese) are paying their bills more quickly. . . . The relationships are very warm. I think they’re paying more quickly to make us realize that ‘things are good here, things are OK.’ ”
The quality of life for expatriates in Beijing, however, has suffered.
“Before June, we used to get about every three months a major, major cultural event,” he said. “The Stuttgart Symphony came, the Pittsburgh Symphony came . . . Luciano Pavarotti and various other singers of note. There was always something to look forward to. But that has dried up completely. . . . Now we’re back once again to acrobat shows, jugglers, magicians.
“There’s virtually nothing for the expatriate to do here evenings except work. The only thing you have for entertainment the past 10 months is videos.”
Yeager maintains two homes. One is at the Lido Holiday Inn in Beijing, which includes an apartment complex, supermarket, delicatessen and sports club. The other, where his wife, Joanne, spends most of her time, is in Seoul, South Korea, where he also has business responsibilities.
The Yeagers’ children are grown now, but the two youngest lived with their parents in Beijing for two years in the mid-1980s.
“It’s rough when you have children here--really rough,” Yeager commented. “I don’t know how the families with younger children make out. There’s nothing for them to do.”
While some foreigners manage to develop purely social friendships with Chinese, most business families mix little in Chinese society.
“I never meet the wife of the guy I’m doing business with or the husband of the woman I’m doing business with,” Yeager said. “They just do not socialize with foreigners. That was even true before the June turmoil.”
During 12 years in China, Yeager said he has been to a Chinese home only once, and no Chinese has ever come to his place on a purely social visit. “They have to have a specific reason and permission from their work unit to visit me,” he said. “This has always been true.”
While expressing satisfaction with Rockwell’s position here, Yeager said he understands the frustrations of some. Many firms have found sales to China a tough business in recent months.
“Hey, no one ever said it was easy doing business in China,” he said. “It’s one of the most difficult countries in the world to do business in. They are superb negotiators. They do their homework. They know all about your competitors, and the products that your competitors have, and the prices, and the quality.
Yeager indicated that from his point of view, the general reaction of the American public to last June’s violent crackdown was strongly influenced by unrealistic hopes for the pro-democracy movement and naivete about China.
“June 4th didn’t come as any surprise to me,” he said. “We shouldn’t forget that China is a Communist, repressive society. They can only react that way.”
Tourists and short-term visitors, Yeager said, are routinely misled by the friendliness of their tour guides, the banquets and the excitement of visiting sites such as the Great Wall.
“People think of China and think it’s one great big Disneyland--that the people are smiling and very happy,” he said. “The average visitor doesn’t realize he’s in a Communist society.”
But whatever the differences, Yeager said, Americans should be here.
“You can’t isolate China,” he said. “My god, it’s the largest country in the world, and we don’t want China to become insular once again. We want to keep as much business-as-usual as possible. It’s a people-to-people thing.”
U.S.-China Trade
How much America bought from and sold to China last year.
Source: U.S. Department of Commerce
Foreign Investment in China
The number and value of new contracts for direct foreign investment in China over the past two years.
Source: Chinese Ministry of Foreign Economic Relations and Trade
