Chapter 23

Part One: Turbulent Waters of Officialdom. Chapter 23: The problems with a family business

Zhang Ke rode in Li Yijiang's car to Xinhai Court, where senior officials of the Provincial Party Committee and provincial government lived, arriving just as Xie Wanqing's car was entering the gates.

The woman driving Xie Wanqing was dressed in business attire and looked thirty-four or thirty-five. She wore a short-sleeved striped blouse, a cement-gray skirt suit, and gold-rimmed glasses on her fair face, giving an impression of brisk efficiency.

Both cars stopped in the courtyard. Zhang Ke stood on the steps and watched Xie Wanqing approach.

Her complexion no longer had the rosy softness he had seen at their first meeting. Her face looked increasingly snow-white, without a trace of color, and her eyes were very tired. At the sight of Zhang Ke, she seemed to relax a little. "You're here too, Little Ke."

"Zhitong wouldn't eat, so I came to keep her company."

Xu Xueping's wife, Zhou Shuhui, came out and said with apparent relief, "Good, you've all made it back. That little madam has been throwing a tantrum. I was worried sick. You haven't had time to eat yet, have you?" Seeing the woman behind Xie Wanqing, she added, "Feijuan, since you drove Wanqing here, stay for lunch before you go."

"I was afraid Zhitong would cling to me all afternoon and I wouldn't be able to get away, so I asked Sister Cai to come over and discuss company matters," Xie Wanqing explained.

"If dealing with the mess Zhiming left behind is too hard on you, just withdraw your shares and concentrate on raising Zhitong..."

"Zhiming trusted Third Brother and the others with the company, but they've made a complete mess of its management these past few years. This time, Zhiming took Zhitong and me to Haizhou because he wanted to see exactly where things were going wrong down there. Who could have imagined..." Xie Wanqing bit her lip, unable to continue. Her eyes reddened, tears brimming in them.

Zhou Shuhui sighed. "You can't blame your Third Brother and the others for that. Who could have known something like this would happen?"

Xie Wanqing pressed her lips together without speaking. Zhou Shuhui sighed softly, knowing she could not persuade her, and stepped aside to let everyone into the house.

They seemed to be discussing a family business, which puzzled Zhang Ke. Xu Zhiming was the son of the provincial Political and Legal Affairs Commission secretary, so how could he be doing business within the province? Xu Xueping did not look like the sort of official who acted without restraint, and even after he stepped down, there had been no unfavorable rumors about him among the public. It really was strange. After all, the central authorities had introduced rules restricting officials' children from engaging in business back in 1985.

Zhang Ke entered the house and saw Zhitong coming down the stairs barefoot. She stepped onto the floor and stood there hesitantly, staring at him without blinking, like a frightened little animal that dared not move.

Zhang Ke crouched down and looked into Zhitong's eyes, whose expression was unsettling. "Don't you recognize your Brother Little Ke anymore, Zhitong?"

Only then did Zhitong walk over. She grabbed the hem of Zhang Ke's shirt with one hand and reached for her mother's fingers with the other. Yet she did not dare show even a trace of a smile on her young face. It was heartbreaking.

Zhang Ke could not understand what kind of fear the car accident had left in the mind of a child as young as Zhitong. Once she caught hold of his shirt, she did not let go all afternoon. She held Xie Wanqing just as tightly, leaving her unable to get away.

There was nothing they could do about Zhitong, so when Xie Wanqing discussed company matters with Cai Feijuan that afternoon, Zhang Ke got to listen in as well.

Xie Wanqing and her husband, Xu Zhiming, had founded the Haiyu Trading Company in the province before Xu Xueping was transferred there as secretary of the Political and Legal Affairs Commission. Xie Wanqing's family had a solid business foundation in Donghai Province, and the Haiyu Company had achieved some success in its early years. After Xu Xueping's transfer, Xu Zhiming handed management of the company to Xie Wanqing's paternal cousin, Xie Zhan, and put all the company's shares in Xie Wanqing's name to circumvent the policy then prohibiting officials' children and relatives from engaging in business.

The Haiyu Company, whose main business was buying and reselling goods, had established an extensive distribution network throughout the province. In the 1990s, when modern logistics systems were not yet fully developed and manufacturers had to rely on agents and middlemen to deliver products to end markets, Haiyu's province-wide distribution network was a highly valuable resource.

Of course, the distribution network had a sprawling array of branches, and managing it well required considerable managerial and financial expertise. With Xu Zhiming managing the company through Xie Wanqing's cousin, a succession of management problems began to surface at the Haiyu Company.

After listening all afternoon, Zhang Ke realized that Haiyu's management problems were far from ordinary. They were serious enough to threaten its survival.

For instance, headquarters assessed its branches and offices solely on the payments they collected, while imposing no strict controls on expenditure. There were no uniform standards for reimbursing expenses of any kind.

Zhang Ke remembered when he had first joined the Longyu Group after graduating from university. Its financial management had also been chaotic. Whenever he traveled out of town on business, his first stop was the station to buy a few invoices he could submit for reimbursement when he returned. The Longyu Group was primarily a manufacturing enterprise, so the occasional parasite like Zhang Ke could not bring it down. But most of Haiyu's four or five hundred employees were salespeople. Without sound financial controls, the sales staff's constant petty skimming alone would be enough to give Haiyu serious trouble.

Zhang Ke now understood why he had never heard of the Haiyu Company. No company managed so chaotically, however strong its resources, could survive the fierce competition in the later stages of the mass-marketing era.

Zhang Ke had met Xu Zhiming only once, briefly, on North Street, and had not even gotten a good look at his face. Yet from that fleeting impression, Xu Zhiming had seemed like an intellectual. Under his direction, Haiyu's management should not have been this bad. It seemed the problem lay with Xie Wanqing's cousin, Xie Zhan.

And he was family? When relatives started sucking your blood, that was what really killed you.

People like Xu Zhiming and Xie Wanqing, who came from families of highly educated professionals and senior officials, could hardly have been poor judges of character. If Xie Zhan had possessed no management ability at all, Xu Zhiming probably would not have entrusted the company to him. Yet Haiyu's current management really was unimaginably bad.

With chaotic management, even if a company could barely keep going, it would make little profit, and its rank-and-file employees would naturally receive few benefits. For certain managers, however, it was an opportunity to make a fortune.

Haiyu had such excellent resources, particularly Xu Xueping backing Xu Zhiming, that it could at least be kept limping along. And every day it kept going was another day Xie Zhan could line his pockets. Zhang Ke suddenly felt that Xie Wanqing's cousin really was one hell of a character. Yet from Cai Feijuan and Xie Wanqing's discussion, neither seemed aware of Xie Zhan's sinister intentions. They simply kept complaining about his poor management skills, his obstinacy, and his refusal to listen to anyone else.

Cai Feijuan had been Xu Zhiming's classmate and was one of Haiyu's founding employees. She had considerable insight into business management and offered several suggestions addressing Haiyu's current problems, asking Xie Wanqing to press Xie Zhan to implement them.

Zhang Ke almost laughed aloud at that. Unable to hold back, he said, "Sister Wanqing, I actually think Haiyu's biggest problem lies with its general manager."