Pushing On: Conversations With Chinese Intelligence Officials

"Let me tell you why I dislike the French," she said. "I'll start with the French because to me they are particularly loathsome. Then I'll tell you about the others -- Americans, the British, the Israelis, the Iranians, the Iraquis, the Thais and the Vietnamese. But first the French because I know them well. And they are the worst. Did I say I dislike them? Well, that's not entirely true. I can tell you quite honestly, that from the very depth of my soul I hate them."

We were in the coffee shop of the Mandarin Oriental Hotel in Hong Kong. It was hot and humid August morning. She smoked an American cigarette slowly, and as she spoke in a low level tone with only the hint of a Beijing burr to her English, she watched for my reaction. "You won't believe some of this," she predicted. "And much of it is, to be sure, incredible. But it's true. Every word of it. You can check it out, in time. You'll find people, documents, evidence. " She flashed a quick, courteous, confident smile and then continued. "Then you can write it down. And we'll see who believes you. My employer will, you can be sure of that. They'll recognize the truth. They'll know I was there."

"Let me give you some advice. I've been to America a dozen times and I've listened to your scholars and your China watchers. Genrally, I can tell you, they are full of shit. They have seldom been right about China. Look at Tiananment. How many predicted what the PLA would do? How many? None that I could find. And you know why. Because they study bullshit. They analyze the words of Deng Xiaoping and of other party leaders, they study the People's Daily and they spend their lives deciphering meaningless details. They are all like the blind man and the elephant. Only in this case it is not an alephant they are fondling, it is a dragon. I know one thing from living and working in China all my life -- and my involvement in the arms trade. If you want to understand the drago -- if you really want to know what he plans, his nature, his character, his soul -- then you must look the dragon in the eye. That is no easy task. Few people want to do that in the West. They love their illusions. They cherish them. They see movies -- "The Good Earth" and "The Last Emperor" or "Iron and Silk" and they conclude that this is China. Well that is not China. All of those stories are fairy tales. So listen to me. I'll tell you some things, tell you waht I've seen and done. And I'll introduce you to others and ask them to tell you also what they've seen and done. We'll lead you to the tiger and let you look him in the eye. You write down what we tell you. And then we shall see. Then we shall see what happens.

Let me begin with the big party -- the celebration -- on the night of June 3rd, 1989, in Beijing. Forget the massacre for a moment. Everyone remembers that. But I also will never forget that party. The toasts, the smiling faces. The party. Then the bloodbath.

There are 72 critical intersections leading from the outskirts of Beijing to Tiananmen Square. Block those intersections and you stop all traffic in the city. Block the intersections and no army can get to the square. Well, at the end of May, that happened. Buty it wasn't the students who blocked the intersections, it was the workers. I saw this. They knew what theyw ere doing, the effort was coordinate. The people had risen up. That is what scared the government mosts. They could deal with the students. But the people, they could not face all those people. There must have been 100,000 people participating in those efforts to stop traffric. And they succeeded until the night of Juine 3rd, when the dragon showed his real nature.

All of them were blocked by workers, students, citizens of Beijing. They drove buses, taxis and cars into the intersection. They pulled concret dividers from the middle of the street across the throughways, and they stayed there all night, preventing the flow of traffic. The truckloads of troops that had come into the city could not move. And so.

I felt something serious was going to happen that night. You could sense in the air. A friend went out at nine, my brother, that night. Despite warnings. Along the way, the intersections were filled with people, stopped tanks, trucks. There was martial law from mid-May to June 4th and until the end of the year. 300,000 troops were out in Beijing, I was later told. I cannot prove that figure. And at least 200,000. 21, 37, 38, 67th armies were all there, I know. The 28th I saw there, too. The 27th.

On May 19th they were around the city, but they could not enter the city. All the people were heroes from that point on. The people rose up. This was the story. The people, the common people, not just the students.

The troops had to crash through the barriers and remove them. Before that, the peopel tried to prevent them from entering the city. After 10:30 we could hold them back no longer. There was a battle at Mu Xudi, west of Tianamen. There was a battle there. The civilians kept an eye on the troops. They didn't move during the day, they dare not. And at night about 6 we blocked the intersections. There are 72 intersections on the way to the center of the city. Seventy main intersections. East and West north and South. And they were blocked each night, about 7, the people, the local residents came out of their houses and into the streets.

With stones and cement. Then they stop the trucks, the drivers were persuaded to stop their cars and trucks at night in the middle of the streets. These were all workers. Not the students. I would say that there were at least 200,000 civilians also, in the streets at night. Crowds. They stayed all night, until the morning, sleeping in the trucks or staying up all night and talking and arguing about the future of the country. They talked, they complained. This is the first time since 1949 they said, when they were really free, when they could do or say whatever they wanted. They could criticize the government for the first time. They were not afraid any more. The first time.

The Dinner

And now if you pay a visit to the Chinese and the PLA naval fordce, you will find one thing for sure: We have Dolphin helicopters, because we purchased them from the French and now we have a stream lined production of them in Harbin. For the Dolphin helicopters, but just to make very short story. June 4th of 1989, was the day that the Tiananmen Massacre took place. On June 3rd, when Beijing was in Chaos, and everyone was out in the streets, there was no public transportation and no policemen in the streets, and everything was out of control, in our office on the 5th floor of the Citic building, we signed another contract with the French of $45 million for an additional for another four Dolphin helicopters. On the night of June 3rd, after 5 o clock. Then we had a banquet. That night, and that is why I had a lot of problems on getting home that night. The banquet was on the 28th floor of the building, in a restaurant that we call the Window of the World, a lot of people say thqat is the best restaurant in Beijing. The Window of the World. A big delegation of the French was there, the head of the Aerospeciale and the general manager of Thompson CSF were there in a signature ceremony. Because that is where the weapons system was produced for some platforms for helicpoters. In the restaurant we could watch everything. The restaurant was well illuminated and so it was difficult to see what was happening in the dark streets below. So at five o clock oin the afternoon we signed the contract in the afternoon. Later we told our British and American Friends and they all laughted. They said, "Oh, sure, that's the French." "That's the French people," they said. "They are just money oriented." They were never surprised. Money and no political considerations. No surprie at all. And they knew on that day that the French helicopters were flying over the Square. And they were just pleased by that. And for the whole day they staid in our Citic building. We were all there for the final stage of the contract and we were all very busy. And later on employees from other companies, on the 6th and the 7th stormed the offices of Poly and God only knows where the came from, they broke the windows and they shouted up and down the corridors and if you were coming ont there on the elevator, they pointed their fingers in your face and they yelled at you and questioned you as to what you had done. OK, they said, look what you spent your money on, all those stupid things, they said, accusing us of what had happened in the square. And that is why we moved to the fifteenth floor later on. There were other businesses in the building, and the security guards, two of them, for the building, in stupid uniforms, they were no longer there. On the 3rd, the whole building was virtually unguarded and anyone could get in. I don't know why that happened and we were so preoccupied with signing the contract. We wanted to sign in the morning, but because of some techinical problems we were postponed in the afternoon.

So we signed the contract with the French for four helicopters. $45 million for four helicopers, Dolphins, with avionics, with two equipped with avionice systems, something inside the cockpit and the other two were empy and didn't have the high tech stuff in them. The people who were present were worried, everyone was worried, and they didn't talk about it. Who was not worried at that time. Who. We didn't know what was going to happen. No one left in the middle of the dinner. Everything was going on as normal before that. I had watched with my own eyes what was happening in BEijing, I was for the students, but I could not leave work. I couldn't go to the square. I had to prepare the contract for the signings. I had to work hard in those last days and I had to perform my job. At that time, from what I saw, when I saw the contract signing, all I could think of at that time was that I really hated the French, from the depth of my soul I hated them. I thought, the French, My God, I will never have respect for them. I'll never have a friendship witht hem again, never in my life. I'll never speak to them again. They are filthy. They knew, they knew what they were doing. It was not as thought they just arrived in Beijing on the third, and they didn't know what was happening. They had been in Beijing for one month, and they knew everything that was happening. That is why eeryday when they came to our building theyhad a lot of trouble in their transportation. Someties they were held up. Sometimes their hotel, the car that was supposed to bring them to us, refused to carry them to Citic. Because the taxi drivers were on strike too at that time. They stayed in the Great Wall hotel. In the citic building we didn't have facilities for them.

I felt disillusionment with the government, too. That is why I left the company after that. I saw from the inside how the whole system was funcitioning, I knew the deals that were made with the Thai Royal Navy and others. This is not the end of the story. This is just the beginning of the story. Other than that. I was not talking about arms expeorts at this time. Exports was the other aspect at this time.

That sort of thing never stopped. We dealt also with the General Electric Company, American companies.

Negotiations, 1985-86, party June 1989. Many contract s were signed with French Aerospeciale in the meantime. The Dolphin helicopter was only part of the deal. Apart from the helicopter project, which was proably the biggest one. Thee were some other projects that were going on, too. Such as int he importation of the French Gazelle helicopters. And China imported that, like 30 of those. And helicopters and from French Aerospeciale too and it was exactly this type of helicopter that flew over Tiananmen Square. That was 1988. The beginning of 1988, if I remember right. And that helicopter was particularly oriented for China's Army Aviation Corps, newly formed. And that was stationed in a remote suburb of Beijing, in specially designated airfields for the Army Aviation Corps. In Tungzhin. It was form that airport that those airplanes took off and flew over Tiananmen Square. Some of the pilots for the GAzelle had been trained in France, but the French also came to Beijing to train them. And actually to fly that kind of helicopter, you don't have to train pilots very long since it is very easy to haldndle and is very small. It is only enough space for two individuals inside, a pilot and a passnger. But still it is equipped with anti-tank guns, rockets or even missiles if that is required for the mission. And China imported some of those for the tank killing purposes.

The scholarship letter of 1989 was the one with the bribe for $300.000, during Beijing's Aeronautical...the showing and the demonstrations were constantly going on, the exhibition purposes were always theere. Probably the British, French and the United States. The French were the biggest contractor for the Chinese military in the past several years. And Dolphin Helicopters were part of it.

It was announced that the contract would be signed that afternoon. Before that, the preparatory period took a long time also in prparing for the signing, in the Citic building on the fifth floor. Because, ont he fifth floor if you come out of the elevaotr you make a left and then a right. If you make a right, all of the offices belonged to Poly Technologies. Right in frong of the entrance we had se3veral negotiation rooms that we called them. They were large rooms, about twenty by thirty feet with a long table. and in another oom would be a group of sofas. I don't think those rooms were bugged. That was never out intention. We don't nned to. Whenever foreigners are in a room our guys are there.

Actually, what is funny about the signing is that the ceremony was performed on the last day, June 3rd, Saturday. Before that the finally preparatory stage of negotiation had gone on for a couple of days, like, as afar as I can recall, for as long as seven days. So June 3 would be the last day, and then seven working days ahead on this. Tiananmen never interrupted events. Never. Never. And the French knw what was going on all along. ABsolutely. And it never bothered them, as far as I could see. They stayed in the Beijing Hotel and sw eerything, saw their own helicopers fly over the square. We saw the helicopters in our own building trhogh the windows. Very clear. My God, they flew so low, you know, someties made their passes around the Citic building just to get into the square. And itw as painted with the army and the airofrce sign, August 1st, The Air Force insignia. That was the day the arnmy was formed in Jing Danshang, in 1921. So, you know, ever since that time, August 1st, on eery Chinese aircraft, the same inisgnia. And thee was this on it, drawing. YOu could not see the faces of the pilot, on once occasion, there were two helicopters that flew so low and so quick, we did manage to catch a glimps of the piloe, but never so clear. But still when negotiations were conducted for seven working days, and so before June 3rd, starting from the 26th of May, when the studnets were already in the Square, the Frenchy saw from our negotiation room, and we saw that too. And very clearly. But stil you could near the noises through the glass. The windows were not tinted. Whenever we hada break and had coffee or whatever, you could stand by the window. And the French stood close tothe windown overlooking everything. Whenever they talked among themselves, when they spoke with us, they spoke in English, and when they spok e among themselves they spoke in French. Once guy who was in charge of the project, Mr. Chun Kungmin, and he was kind of a good guy, working very hard. Sometimes he stayed in the office overnight, typing up paragraphs of a letter or whatever. He seemed to have the habit, he runs to the office every day, he lived very far from the Citic Building, but he chose to run every morning, and when he got off work, he ran home, because he used to serve in the air force, he was the chief French interpreter of the Air Force for ten years. He was the chief French interpreter of the air force for at least ten years, and he traveled in France and in Britain. He ran, by foot, in tennis shoes, kind of a straqnge guy. He kept all of his clothes in a locker in the office, while he ran in his shorts, even when it was very cold. He was famous for that. In the winter, he swam outdoors. He was a kind of a health nut. He was in his early 40s. Medium sized, and looked like an intellectual, wore wire-rimmed glasses. Seldom smiled. SErious and somber. Didn't smoke cigarettes and he didn't seem to be interested in women either. He was married, but he never spoke of his wife. We constantly spent time together, and from the 26th of August, or the 25th of May, negotiation phase started. And finally the navy made up its mind saying that we did need those four helicopters, because of what happened in the Spratley Islands. The Spratley Islands were pretty heavy on naval minds, of course, the kind of controversy and the claims of various countries were still going on, and the navy was really at the stage of building up for that purpose. And so the French delegation finally arrived, but they had their, what was so special about the French is that they always had support of the government. The French government, under the government had a defense ministry, but also they had something called DCN, it is avery influential group, like a Science and Technology commission of national defense, and it supervises all of the defense orinted rresearch and production, for either domestic applications or for export purposes, very powerful, all the famous army generals and navyal admirals, when they retire from the military, they serve in DCN. I know what it means in Chinese, it means Defense Supervision Council. Military Supervision Bureau. Very powerful, and they had people present in Beijing constantly, and have their office there. And the French Aerospeciale, they also have their office in Beijing too. But the French delegation was really from Aerospeciale, when they arrived they stayed in the Beijing Hotel, and around 15 people, present at the negotations. The delegation was headed by Mr. Samuel, because we constantly called French names in English since we never knew how the names were pronounced in French. He was director of the overseas marketing division of Aerospeciale. He was director the oversears marketing division of the company, and he headed the delegation and it was composed of a lot of experts, either on technical specifications or on quotations or on commercial aspects. So finally, the Navy also sent their representativews in civilian clothers, the Chinese Navy. And the guy actually was Mr. Xie Tie-Niu.(means Iron Ox). He was a captain in the Navy, in charge of the, eqivalent to an army colonel, he was newly promoted, and fairly young, about mid 30s, but very powerful. Also, a womanizer, with several beautiful mistresses -- all of them are very beautiful. They were individuals and he didn't have to support them all. He was unusually god looking, and he seemed to look like a guy from an important family, with beaitufully cared for nails, soft skin, rosey cheeks, very polished hair, impecabbly attired, wore neither glasses nor smoked. But drinking and womanizing were no problem. And he was an excellent dancer, and a romantic guy. He had a beautiful commanding voice, also, Director, of the naval technical international procurement division, so he was there too. And of course with a couple of other men from his division. And there was another there, the son of the late and very influential marshall from China, a senior general, a four star general was his father, his name is Xiao Bo Ying, and he was the son of the founder of the navy, the Xiao Jing gua, that was his father and the first naval admiral and the first commander in chief of the navy, actually, he was handpicked by Mao Zedong to head the navy. Actually, Mr. Xiao joined the communist party earlier than Mao Zedong did. He was one of the very early leaders of the communist party, in the early 1920s. He was very old and very repsected in military circles, But his son was with the technology and equipment division of the Navy in charge of aviation aspects of the navy, and actually he worked for the helicopter sector. That is why he was present. He was also a captain, Xiao Boying. In China, whenver there are foreigners present, at an occasion, Military personnel are supposed to be in civilian cltoehs. They don't loike many people to feel that the navy purposely chooses to deal with foreigners directly. There is a subtle difference. They were present and from my company, and actually I was the interpreter at that time, and the general manager, He Ping, son in law of Deng Xiao Ping and He Datong, who was the vice president of our company, together with Mr. Chung Kuming, the individual who ran to work in his shorts every morning. In Beijing we call it the chocolate building, because it looks like chocolate, either the color or the shape. And altogether, probably, six people from the naval side, while there are five people from my company. The French had about 15, so altogether about 25 strong. A big occasion. The first day we compared notes, and we exchanged our views on preparation of the final document, which was preparation for forming a contract. And while the discussions broke into two groups, one was for technical final discussions and the other for commercial, like the price negotiations, the final stages. The navy was serious and believed that they were in a real bargaining table with a foreign competitior, and the people from the navy who were on the comercial side really pressed the French, saying that this time we are serious, to buy your helicopters, so please make some further concessions on your prices. While the French held firm during this. Said there could be no further reductions in our quotations. They said, because, before the negotations started, the French had already contacte dus, Poly, because we were so influenced by the Aerospeciale, and so were the naval admirals, who were not present at meetings like this, but they always had a hand behind them, and they had a good intelligence system. They knew that we had $45 million US in our pocket and that we had to spend it. The problem was that the French knew this, that no matter how hard we were going to press them we would give in because they knew that we had to buy the helicoperr and that we had to spend the money before the end of the year, or otherwise we had to return what was left of the money back to our superiors, and that was the General STaff, and then there would be no profit at all for us. The General STaff didn't really care how much we spent. We just told us how much we needed and they alotted us the money. And so the French knew everything, and so the guys from the navy before they came to the negotation table they had their own meeting among themselves, and they said tha this time we are going to press the French. This time we are serious. We will let them know we are serious. And once the customer lets someone know he is really serious, it is always the case that the seller will make further concessins, just to make the deal go through. This is always a common practice. And the guys from the Navy knew that. But one thing that they did not know was that the French knew also what they were talking about. There were leaks, important ones. The French knew everything. And so on the one hand we wer saying that if you don't make further concessions there will be no deal. And they knew that wasn't true at all.

The admirals who were the ones who knew and were affected by the French. They had been bribed. But not their subordinataes. By affected I mean that products manufactures by the French are cheap and not trustworthy. The quality isn't good. We have signed so many contracts with the French. I don't know in this case what the special considerations were, the special gifts. But I do know that to us the French were the numbe rone Western merchants, they knew how to do business with the Chinese much better than the Americans and the British. The absolute worst, of course, would be the British people. They are just too sincere, just too naive when it comes to China. But the French never were that type, never fell into that category. And so before they haded to the negotation table they knew exactly they thought what our position and our arguments would be. So behind the scnees the final negotation phase was not every meaningful except in technical terms, you have to explain to the customer how to interface your product with other, system coordination and so on. And system integration because you will also be putting on board materials made in China. Like part of the avionics are from China, too. So they did spend a lot of time explaining things like that to the Chinese side. And so finally on June 2, everything was finished, everything was done. And then we were ready to sign a contract on the next day.

And so on June 3rd, time was running short, because judging from the situation in the street an d in the Square, those guys who were in the company who were well connected militarily, they knew what the army was going to do that night. They knew. So they wanted to make sure that the contract was signed, that the deal was done, before the killing started.

The student marchers came by our building on Chang`an, it seemed every day. And then on June 2 and June 3 were the biggest marchest I had ever seen in the city, perhaps the biggest marches ever made in Chinese history. At least one million people poured out into the streets on those days. And the intersections were all blocked, all blocked, all 82 of them. And so it was nearly impossible for me to get home in the night. And some evenings I chose to stay in the office rather than go home, and I stayed in the office and stayed in the standby bed, but there was an ability to walk between the Beijing Hotel and the Citic Building. The French had to walk during those days. When the taxis were forced to stop[ and the French had to get out and walk. The days were hot and humid, very hot.

The building was airconditioned, so that was no problem. At three o clock, the previous night we didn't finish work until 2 in the morning. So tomorrow we have to get re3started at 3. So the French arrived, and they knew that after the signing ceremony we would have a party. At that time, the building looked almost abandoned, a ghost buiding, it was neglected. Still some Chinese staff showed up, but ver few. Becasue they couldn't make it to the office. The guards at the door did show up, they were civilian security guards paid by the companies. The elecvators had to be operated by the riders. The French arrived at 3 and we put them in a room with a long table, and we had the national flags of France and China in the middle of the table, it was all well draped. The front desk receptionists, pretty girls from the company, and they served champagne, that was a must for an occasion like that, so Mr. He Ping and Mr. Samuel and the guy from the navy stood close and we had photographs taken and enlarged later on. But it was a very solemn occasion, since everyone knew what was happening in the square, outside. Everyone chose on the occsaion not to smile, and that was unusual for an event like this. When we said "Gen Bei" then people would flash a smile for a moment, but it was forced, and it was over in a moment. Because everyone knew what was happening outside, what was coming down, and it was going to happen quickly, and soon. Because on that day, before when we wee in the negotiation stage, a lot of people, we heard some noises from outside, and just, some just employees from other companies, they were very symapthetic with the students, once they realized that those damn helicopters, circling in the air and coming over our building were actually purchased and imported through Poly, they leaked this story out to the students, and a lot of employees then mixed with the students, they sort of stormed our office and they were on our floor and the like questioning everyone who came into the office or through the office. The guards couldn't sop anyone at that time, everyone was affected. On a cuple of occasions, but hearing from the receptionists, they told us that a lot of people stormed into the reception desk and told the girls profane things and told us what kind of a fucking company we were, they said. And at that time, some people, came from out of our offices, and they were going upstairs or downstairs and they were all stopped and questioned. And these people would actually grab them and shout, "What kind of fucking company are you anyway? |:You are spending China's treasure, her hard earned foreign currency to buy shit like this, like these helicoptes." And a lot of us were embarrassed and we really didn't know what to say. Yes, we didn't know what to say. We weren't afraid at those moment, but we were profoundly moved, and we were embarrassed really. We knew that the French had sold us the helicopters and they were now flying and they were indeed the helicopters from Aerospeciale and the Poly did indeed spend a lot of time and money buying them for China. But believe me the last thing we expected the helicoptes to be used for was this application. But the people in the Square they didn't know where the helicopters came from. They made a lot of noise and pulled paper to the floor and that was all. But later on, Poly was forced to move from the fifth floor to the seventeenth, after the massacre, becasue this was immediately reported, because almost all of the mplyees of the building, different companies, inte4rnational companies, like AT&T was in the building and Yugoslavian company and west Germans and a couple of Chinese businesses, but it was still called Citic Buiding. And one of the things they were always talking about was oaur company. And they all said, we always wondered what kind of company you were. In the past we didn't know that. But know we know what you guys are doing. And whenever we had to share an elevator with other people, I personally experienced that. Cause whenever they saw the door open on the fifth floor, the people glared at him or talked about the company openly to us, and against us. And they stared at us and tried to stare us down or they would be absolutely quiet. The company reported that immediately to the General Staff and so the General Staff finaly made the decision that Poly would move to the seventeenth floor. At that time the seventeenth was renovated, and was in kind of a reparied interior and so it was uninhabited at the time. At the time, I didn't know who came in and took the fifth floor. But now we occupied the whole seventeenth floor. So that was a larger space. We used to spare one room, and now we had two. That was double the space that we had before. Our reward. And I prepared some of the documents myself, we printed them out, and put them on file. The documents were always in English, English only. That is the lingua franca of the arms trade. The official copy, was signed, only by two people. By each representative from the sides. On the French side it was Mr. Samuels and on the Chinese it was He Ping. And the special appendxes, which the technical sides of the contract, and the commercial side of the appendenx, like personnel training and the payment advance payment appendix, all of these were signed by respectively the individuals concerned. So a lot of people signed, and the entire ceremony took about two hours. They were a good deal of discussion and individual swere constantly standing up to have their pictures taken and to shake hands and to chat. And then on the 28th floor was a dining hall, and we called them and reserved part of the hall for a big party, we said, for about 30 people. And they said, OK, and it was because at that tie the restaurant was virtually empty. The whole bilding was not crowded now, not many people there, on a Saturday, and it looked fairly abandoned for a couple of days. So about 6:30 we had a short rest period, and then we moved up to the restaurant, it was nice and cozy, called "Window of the World," very famous and they served really nice food. "Windows on the World," they had glass windows, large. But they were just normal windows. We had half of the restaurant that night. The, few guests in the restaurant because not many people show up in those days. So we were the only guests that night. The waitresses didn't care as long as they made a profit. No waiters that night. Just waitresses. A head waiter who showed up only when something important. We ordered the standard banquet for 30 people. There are A and B and C levels and we ordered the A level banquet. The French paid for the banquet that evening. They always paid for the food. That is part of the way for doing business in China. Because we reserved many tables, and we called up all the people in the office, the receptionists girls and the public relations sector. And they were present. There were about thirty people there. It wasn't a formal occasion, but on this occasion, nobody bothered too much about what you should wear, since there were other things to worry about at that time. You could see out over the entire city from that floor. The Citic building is some distance from Tianamen, but the shootin was about to commence at that time.

There were dozens of toasts that evening. We ordered Mao Tai Liquor and Wu Danwei too, very expensive ones. Once we told the French that we wanted a banquet they were very happy and said, oh we were thinking along the same lines. Please, let us have the bill from this. And from that point on we ordered everything that was most expensive. A very nce banquet after all. Thee was candlelight, and we told them that we preferered that. They turned down the big lights. It was a very cozdy restaurant and avery nice banquet. There was a sort of nonstop background music, classic. As it darkened, we kept looking out toward Tianamen. We couldn't resist it, of course. The important people sat at one table, according to their rank. And they were serious people involved deeply in conversation, eating and drinking. But for the rest of us, at the less important tables, we felt less obligied to speak formally. And we could speak about whatever we liked. And the French wanted to know at that time about what we thoughta bout what was happening outside. Mr. Chen was the translator at the most important table, he was very fluent in French. I was at another table. And what was so funny is that the French never bothered to ask too many questions. But they knew what was going on. It was the Chinese around the table that were talkaing and sharing our worries and talking about what we had seen and predicting the future. It was us.

Why should I bwe worried. If the party was finished, then half the people would be very happy, U guess. But they would not be depressed. Cina was going to be more democratic and they thought that would be b etter and they would have a better life. And that, then is what we talked about that night. The impending death of the Communist party on the one hand or the impending death of the democracy movement led by the students on the other. We talked with the French and we talked about life and how many times have you been to China and are you satisfied with the contract and so on. We chose to stay away from Politics in talking with them. But, with the Chinese, among us, we shared our concern, because we all knew what was happening. And some, in fact, knew that the army had been issued orders to crush the movement that night. They knew that the army was on the move that night. So the banquet was finished before 10:30. Some individuals began glancing at their wrist watches later that evening. And probably a little more than one hour later the shooting started.

People at 10:30 took the elevators down. The the frence that night headed for their Embassy rather than their hotel, an indication that they perhaps knew what was going to happen. Outside the building their embassy people were waiting for them, so that had dispatched their own cars for them that night. They chose not to take taxis that night. And that night I was the one who chose to go home. I took a round about way on my bicycle. I was, kind of a, on a bicycle, and I saw the situation was so incredibly tense that night, but it was quiet. Where our office was was already some distance from Tiananmen. More than a kilometer, four of five, but still, you could see the lights and you could see the serach lights, and everyone who was not stupid knew that night athat something was going to happen. But efore the shootingstarted you saw the army vehicles. But before that time no one was afraid of the army vehicles because knobody thought that army was going to shoot anybody. When you saw the trucks driving around you weren't afraid because the feeling was that the PLAS might do something but certainly they would not shoot anybody, not indiscriminatnly, scertainly, that night. The nly thing I saw that night were the vehicles, not Apcs, only the trucks with soldiers loaded in them, camouflaged, and I thought something serious was about to happen. The trucks were filled with soldiers. The soldiers were quiet and weren't talking to weach other when I went by them. The only time when the people from Beijing could get close to the soldiers on the truck, where they were stranded, were after the shooting. The soldiers were still on the streets and still surrounded by people. These people from Poly had their own cards, and they could go wherever they wanted. No problem. The traffic was moving that time, but the important intersectins were blocked by workers with conceret and with buses and cars and taxis and they knew the army was coming i. But I always had the feeling that this was something relatved to Chinese politics but certainly not to Chinese business. This was a Saturday night, and I was too preoccupied that night. It was horrible, acutally. I took the roundabout way. I went through the back way around Beihai park, and I bicycled to my aprents home that night. The girls sfrom the restaurant also rode their bicycles home too and there was no pblic transportation that night.

At the back of the Citic building, a short distance away was a bicycle rack, some distance from the bilding proper. So, that was the occsation and the nice food was served, and the next day was not a work day, and who dared leave his home at that time. The armny moved in and they shot anyone and everyone. I heard the shots at first. and I thought, what kind of accasion is that, it sunded like fircrackers. and then I looked out my bedroom windown toward Mu Xudi and I could see that the sky was all light up lie a celebration or a huge fire was burning at that time at some distance. Half the sky was red when I saw it and there were flashes like lightening.

I came to work again several days later(says one week), and that last contract was signed with perfect timing, to be sure, the timing was perfect. The next day, the 27th floor, the army just shot into the building, the army shot it up, the windows, and on the 27th floor was an office of a Yugoslave company, the soldiers thought they saw snipers in the building, they said, and the other, the security agents saw some tapes that they thought were taken from the building, and so they wanted to intimidate people from taking pictures of that advantageous building, Yuogslave industrial Engineering Firm SNELT Global Project Management, and that office faced west and you could see soldiers moving in a shooting their weapons. And later this was the explatinon that I heard, later on, they said that they should not only the building, but some of the foreign residential area and diplomatic compounds. The British and the American army attache offices, the windows facing the west, they were all smashed, and all of this was done to intimidate them. The reasons they should out windows was because they thought movies were being made from those buidlings. They thought that someone was fimling from those windows and so when the army was in firm control, they shot out the windows, randomly, here and there, and a lot of windows were smashed and broken. And when I went back to work. No problems with the files. We had our own security and there were people who were always there and everything was locked.

We moved about one month later, to the 17th floor. The 27th was also the ATT&T offices in Beijing. A lot of windows on the west side wer just smashed, and this was the most serious.

Beyond that the mpact on Poly, the mpact was, normal in no way. Everything looked normal, but everyone knew what happened and not everyone supported what the army had done. But nobody dared to say that. Nobody dared to express his own opinion. We dare not do that. But still we could not talk, express our opinion, that was dangerous. We chose to stay quiet. And besides. Poly was poly and nobody questioned the people, bothered to do that. But what was interesting about the contract was that later on, because of the Tiananment incident, the French government joined the American government in posing economic and high-techn sanctions aginast China, so the contract failed to get approval of the French government.. So the system was never delivered and the contract not finalized. The first part of the dealivered to the navy, but as far as I knew, the French Aerospeciale worked closely with DCN to persuade the French government to rectifiy ratify the contract. Of course, high technology, military technology was involved, so the French government had no other coice but to not ratify the contract. But finally it was ratified, because, well, you know the French. They, when they have no choide they do something,

The French commerical firms were never affected by Chinese domestic political affairs. They were very good businessmen, veyr money oriented. And besides they knew pretty well how to do business in China.

Disruption of the Citic Offices.People were not coming back to work. Some never left the building, they had no where to go and all the transportation stopped. And so later on, in the aftermath of the massacre, a lot of the employees of the other offices who were also in the building, some of them talked about what happened, and some of them were really infuriated. They had seen the helicopters and they knew that we had purchased them. And later on they kept talking about the unique position of poly technologies. Not because they just saw the helicopters, once they saw the helcopters, they had something else on their mind. They said, Poly is in this building, and these fucking guys have nothing to do with us, no wonder they are high up there in the building under no one's control. they were always under that impression towards us. In fact, anyone who came into the Citic building, or who was going to business with Poly, they were always stopped by the security guards at the lobby, and they were required to sign their names. A kind of procedure. They couldn't stop anyone, but people coming to Poly, were more required to sign their names, a sort of unfair and hostile tratment toward us, to show their grievances toward our company. You guys are special, right. And so we will give you a hard time. And on a cuple of occasions. They sort of came into the office, gathered at the reception area near the front desk, they questioned the girls who didn't know what was going on, spread ink, shouted and they didn't break glass or anything but just shouted insults. And whenever there was an officer coming out of the office they stopped him or pointed their fingers in his face and cursed him, and threw a lot of accusaitons at them. They questioned the girls who knew nothing of what was going on, spread ink, shouted, and generally were a nuisance and they were embarrassing. They stopped people who came out of the office, or pointed their fingers in his face and cursed him. Incredible, a lot of vague as well as specific accusaitons. Poly moved soon after that.

The reason Poly moved from the 5th to the 17th floor was a coincidence with Tianament. It was not because of Tiananmen. They had been thinking about getting more office space for a long time. and this provided the pretext for it. They never said openly that the Tiananmen incident and the harrassment that we received after that caused us to move. They would never say that. But it is an interesting coincidence, isn't it. What happened in the office areas was one of the things that facilitated the move. That makes more sense. In Chiese politics, anything that happens is never based solely on one thing. there are usually many factors contributing to the final result. That iks a more rational way to look at China. But others might say that the storming of Poly after the massacre, was the final push, the final element in the decision to move to the 17th floor.

Take the elevator from Poly to the top floor. There is no musak in the elevator. There are two on each side that go up to the restaurant. Everyoine could not go on one elevator. The most important people always walk before the entire group. That day, though, everyone knew what was happening outside, so there was not a good mood, we were just pretending. French Aerospetial said that they were pleased, but they were pleased more with what they could achieve at this critical moment in Chinese history and especially of the Communist Party than with the specifics of the deal itself. That means they were incapable of breaking through the Chinese ice from those days. That's right. The, we all knew, that the Communist regime was basically against the will of the people. Just look at the numbers of people in the streets. People were pouring out of their apartments. You saw the banners and the slogans every day. Everything looked white in the streets from the shirts of the marchers. And along the sides of the streets were small campus up and down the streets for university students from other provinces. They could not get into Tianamen because the squaare was restricted to students, primarily, from the Beijing area. And those who couldn't make it in were on the sides of the street. Sometimes they slept in buses and never left the parking places. Some stood on top of the buses waving flags. And they stood around the army trucks, and tnheyy were full of army personnel and they could not mood and they were stranded by the masses of the people, day and night. And so nobody wa sin the mood to do subsiness. Except for the French arms traders. Only the Fench. I wanted them to just go home and let these things unfold. At first they came. When we first received the fax telling us the approximate date of arrival of the delegation. actually, we were not very sure that they were serious. Were they just going through the mtoins, or in the midst of this were they really going on to negotiate this deal. When I was reading this fax, I couldn't believe my eyes. "What?" I remember saying. This isn't true. Can you guys be sure that the delgation is coming and that final stage preparations are going to take case int his atmpshere. This is impossible. This is incredible. I just couldn't believe it. That was at the beginning of May. At the end of April, if I remember it correctly, about ten or twenty days berfore the arrival of the delegations. And negotations didn't start until the 26th of Masy. And the 27th was the day that the helicopters flew over the square and eveyrone could see these - Gazelles, sold to us by the same company, by the French. And so, sometimes, when I was, or when were we in the negotations room, I looked at the faces of my seciotn director, the deputy and the general manager of the company, and they were just stone faced. They smiled very naturally. But there was no enthusiasm and no sincerity in it. They smiled when they needed to smile. They controlled everything beautifully. It was as though nothing was going on outside. It was incredible. It was like a pathetic play. everyone was nervous and glancing out the windows and then during the second day there were the helicopters fllying by. Incredcible. Nobody was in the mood to do business. I was not in the mood to do sbusines.s And the only reason I was there was not because they needed me, but because at that time I was not translating, there were people there who were younger than me. So I was not doing that job. So I sat through the negotiations and observed them. I was one of the few who kept looking out the window to see what was happening. A lot. I never believed that the PLA was actually going to fire on the students. I couldn't believe that. I wondered of course what the solution to this problem was going to be and what it would mean for the party. It might be the end of it! I was almost convinced at the end of June that the end of communism had arrived. But still I looked at the deputy managers and ours ection chief, and my God, you could detect any disbelieve in the communist party or the communist control. they looked very confident, if you judged only from their official expressions. Then you could draw the scientific conclusion that nothing was happening, business was normal and everything was as usual. Can you believe that. When you are sitting there in the building, looking at what is happening. Of course you could not see clearly into the square from where we were. You could see the treetops. And you knew what was happening outside. We could see down to the Beijing Hotel but not into the Square.

The French wore just short sleeved shirts inside. But they wore their business suits outside. And judging from my talk with one of the delegation members, they were watching too what was happening. But they cherished one thing, above all else, they believed that no matter what happened, the Chinese government was going in the end to control it. Nobody is going to change the course of communism in China. They believed that those in power would remain in power later on. They were very confident of that. Judging from their attitude and especially from their casual response and their behavior during the negotiations, I was convinced, my goodness, it was not the kind of expression you saw on foreigners wandering around the streets at that time. Everyone was sort of nervous, in a state of high excitement, and they were looking around to see who was following them. But not the French. No, not the French. And that is why the signiture itself was more significant in the timing than the deal itself. So you must just hammer that home in your story. That is very important. That is the highlight. That is much more important than the kind of diner we had and the wiatresses and so on. I don't believe there are a lot of people who could behave like that. I don't believe that. that's the French, as I saw them.

I didn't know that much about them personnally. they were representatives of the company, and that was it.

I never liked the French much. And I like them even less since Tiananmen. I dislike them now, intensley.

The elevatoors were modern, the bjilding modern construction. You step out of the elevators and you are facing the other elevators, and you can go right or left into the dining hall. and you see the designated tables already reserved. Already there were about 9 or 10 reserved tables. Candlelight thjat night. That was special. Candles in a glass. The waitresses wore a traditional Chinese costume, what we call Chi pau, red with high collars. And some in gree and some in black. There were not many waitresses that night. A saturday. But they had difficulty getting there and so they were understaffed that night. We ordered champagne for toasts. Shark fine soup was the opening course. The service was slow, I recall. Because obviously they were understaffed. So there was more time to talk, more time to worry actually.

Strong flavored spicy food served that evening. There was beer and wine on the tables. The dinner didn't last that long, not as long as usual because of the situation outside. YOu watch the maintable and when they are finished, you are finished, even if you are not.

We called the girls at the front desk and the drivers, and we reserved two tables for the what we call the staff members. We mean hostesses and the receptionists and the drivers. It was very dark when we finished, but some lights could be seen in the distance, off in the west toward Mu Xudi. The building was lit around the base. Around 10:30 the shooting started. And the dinner ended shortly before then. We made a point to make it very short that night. We left by 9:30, between 9 and 9:30. I stopped at the office on the way down, and collected some papers that night. And then had to see the guests off. And then took the elevator down. We said goodbye to them at the front entrance. They had embassy linousines that night as their transportaiton. Later on they changed hotels from Beijing to Kunlung. I had a bicycle parked nearby and rode home in the darkness. I could feel that night something in the air. It was humid. The soldiers I passed on the streets look so serious. But at that time I was preoccupied. Crowds of people were gathered all over the area. They were talking, smoking, laughing. Predicting the future. Sometimes there were many as a dozen. And they would be standing in a circle, arguing or listening to someone speaking. Some said that Communism was finished. But nobody believed that army was going to shoot. I even stopped my bicycle and listened to one of the conversations. And there was a many there, a veteran. And I remember him arguing, "The army may shoot. but they will shoot in the air if they doo. It is the People's liberation army and they will only shoot into the air, they will never shoot the people."

Later, I don't know what happened to the French. I don't even kow if they made it back to their hotel or if they stayed in Beijing. I didn't go to the office for the next several days. And not many of the staff members made it back to work.

The restaurant floor was hard wood, and you could hear the clicking of the shooes as the crowd scrossed the floor. they had curtains on the windows. They have a separate room with a bar on the other side. The dining room is separate from the bar.

IOt was just a normal banquet. Everything was normal except the way that people were feeling. You could hear your feet click across the wooden floor.

The most expensive restaurant in Beijing, Maxims, ordinarily not affordable for Chinese. And we don't like the food there. They have music and serve escargot, but I dislke it and fresh steak, rare, with blood on it.

Windows of the World.(She Zhr Jichua). Only a dining place. Well known place for businessmen in China. Basically Chinese cooking. Mixture of Chinese styles.

The French couple who helped the Chinese arms deals. They had worked for the French Aerospeciale for about five to six years, starting in late 1982. Man and woman worked in the same unit, and they belonged to the Signal Corps of the PLA, an dindependent organization, but later on the corps was incorporated into the general staff, and now it is a department of the PLA. The man's name is Mr. Wang and his wife name is Mrs Wang, but her last name is Li. Influential couple, heavily involved in the French deals with the PLA.

The signal corps had some of the first deals with the French. Before he retired, Wang was promoted to the rank of regimental commander. That is the rank of major, two ranks are around the same level. But at that time he wanted to be promoted further, but the chances were not good for him. So, he thought seriously of retiring, but he was not permitted to do so. Later on he became more and more involved in foreign negotatgions, not only with the French but with the British also, especially when it came to some of the communication equipment, that was his speciality, so he was constantly involved in technical discussions and evaluations of this sort, including the deal from the air force and the navy. In terms of the communication field, the place that he was working for was high level, technologically speaking. He was very good at communications and signal transmissions. Laer on the French, while they were dealing with the Chinese military, the air force or the navy, this guys name came kept coming up. And so they knew he was important and they discovefed also that he was a well connected guy in the military, he was from a Chinese senior family but not military family. I am not sure what his family was about, but definitely not military. He refused to talk more about it, and so no one really knew. I dfon't know for sure how the French recruited him, but all of a sudden he beame very interested in the French. He spoke some French, too, and taught himself, and so did his wife. In 1983 the couple decided to really help the French make their deals in Beijing. They were well connected and well informed, and they knew exactly what sort of equipment the military was looking for and what the details of their budget was. Now this was critical information. For foreign businessmen in Beijing. He was able to provide all of this inside information to the French. So the French began to cooperate with him while he was still in the service, initially. He was very intimately involved with the French attempts to make their sales in Beijing. When there was commercial discussion, technical evaluations, discussions based on French firms in the equipment field, this couple constantly showed up. So, that was in 1983, they decided to retire from the military, and then they had tos tart looking for their own jobs in the civilian field. So the Frfench came forward at that time. The French made a proposal to them. They said, "We want to hire you and to let you stay in Beijing as consultatns for us." The guy was reluctant initially, because at that time the reform atgmosphere was not very favorable, especially for people who just retired from the military, and if you worked for fireigners, you were in trouble, at least you are very suspicious. So the guy decided to go to France and to tour the facilities of French Aerospeciale and to gain some first hand experience with the company. The French agreed to this, and the couple obtained their passport and visa, and they flew to Paris, and stayed there for about one year, or alittle longer. And during their stay in Paris, their daughter and son were transfered to France and were admitted to French universities. And the children still today are there. So, starting about 1985, when China firtst held the defense exhibition show, what was we call the Asian Asiandex, and the first was held in the mid 1980s. And that was the time -- but beforfe that show, the couple moved back to Beijing and moved into an apartment. And later on they just stayted. They did not stay in a hotel, they still had their own homes in Beijing, but they were heavily committed now to the French and promoting deals for the French.

The first time I met him was in 1986. Iw as introduced to him them. And he was unusually cordial. he was well connected with everyone from Poly and it seemed to me that everyone knew him. So in case there was one new individual that he didn't know, that individual would be introduced. Everyone had to know him. And he was always very busy touring all the stands on the French side, the French and the British were always side by side in these shows. It was held at the China Exhibition Center, newly built.(held at the China exhibition center) and so he was very busy traveling around that day, a very pretty day and a lot of foreign guests and he was busy traveling around introducing vips to the people, so it was he was pretty successful that time. But whenever the generals came from the air force or the admirals from the Navy came, he was constantly presentg. I don't know for what. But on a couple of occasions when I was with General Lin and the Admiral, and I traveled with them and interpreted for the,too, he was around. He was always willing to pay for dinner and this kind of thing. And he was always asking, "Oh, and where is the general going later." It was already 11 pm, and he kept glancing at his watch, and this sort of thing. And the personal assistant to the admiral, his staff officer, said, "Well, they have no where to go and they don't know where they will eat." So he invited us out for dinner and took us to the Great Wall Hotel, which was close to the exhibition center, several kilometers away, and we had some very nice dinners, sometimes lunch, there, in the great wall hotel, very luxurious dinners. Of course, it was always his treat. He paid. And he smoked, always very nice Chinese cigarettes, his famous brand was Red Pagoda, Hong Tashan, Red Pagoda Mountain, I noticed that because I think he did it for show purposes. He just sat side by side with the admiral and with the genrtal of the airt force, and he seemed to sadvertised, "You see, I'm still patriotic. I refuse to smoke foreign imported cigarettes, these are the ones I prefver, despite the fact thatg I stay in France and I work for the French. I styill smoke Chinese cigarettes. Only he smoked them. He wore stylish, grey western business suits and silk ties. Beyond that there was nothing unusual about him. And his wife wore god wire-rimmed glasses, she looked like a techniciain, very severe. And she was, of course. And he just said, they talked about friendship always first. They knew each other wel. "How is your son," he asked. "My son is in France, too." And they know each other, and so on, and then they would toast their children, to the general, to the admiral. And finally, just as the dinner was ending, or at least near the end, then he would bring up business. And he would say, all right, this time the French have this or that, and his presentations were wonderful. He would speak abouty his children and then in the same breath bring up the French had superb, the thermal imaging system, and so on, and he said, I just spoke with them and they will reduce the price fo ryou, they are making a point of it. TYhis is a good deal. the generals of course were not very well educated, and once they heard something like that, then they were interested. So they are, really, is thaty tyher case? Make, sure. Don't help the French put an infoavorable price on us. You are the guy who knows the bottom line. So don't deceive us. And he said, You can count on me. No problem. But of course I knew what he was doing, every time he talked he was advocating business for the French. My God, if he wasn't valuable to the French, they wouldn't pay him the way they did. He lived in an apartment in Beijing in the signal building. A compound. The signal corps, they had their own individual assigned apartments. He knew where the wweak points of the French were and where the weak pooints of the Chinese were too and that is why he was successful. I talked to him and we talked about business. He talked of Poly and asked if I was happy with the work and so on. what could I say on an occasion that is official. I found out more about him when I talked to staff officer of the admiral. He was on very good terms with the guy, and I asked about him. And he said, "Oh, Mr. Li. Very helpful. He travels back and forth all the time. Whenever there is an important occasion he goes from Paris to Beijing. He has a citizenship of France. He is a permanent resident of France and now his children are there. I asked what was so special about him. They said, Don't worry. He has money. He pays for nothing out of his own pocket. The French pay for everything. I saw what he was then. The Got between betwen the sides in the negotiations. If he had a lot of money, and I believe that he did, then he made a point not to show it off. The cigarettes were a case in point. Whenever he smoked, he smoked maybe half an inch from the cigarette, just the end, and then put it out. He was a chain smoker, but only smoked the ends of the cigarettes. He was medium sized, not good looking at all, really, dark skinned, tan, not very masculine.

Other French Deal with the Bribes

The first deal that I was associated with, was the discussion of the Lynx Helicopter, anti-submarine helicopters, ASW, Anti Submarine Warfare. That was the first negotiation I was direclty involved in. That was in 1986. This was a legitimate buisness deal. In the end we didn't purchase the helicopter, although it was a much better system than the one that we were to purchase later ohn. This was really a stupid deal. Let me describe it to you.

We were shopping around at the time, for this specific sort of shipborn ASW helicopter. And at that time, we had no shipborn capabilities at all. So we actually, this was at the end of 1985. So the British came to Beijing, two groups, the British came and we arranged for them to stay in a hotel, and then the French approached us and we made arrangements for them to stay in another hotel, but the negotiations were carried on at the same time with the two groups. The French were in the Great Wall Hotel. Normally, they paid for their own accomodations. They were in Beijing to introduce their own items.

They were in Beijing purely for business purposes. I dealt with the French at that time. They were private corporations. The British Naval Attache in Beijing was involved at that time, too. His name was commander Farr. There were about a dozen people in each delegation, and this to us was a big delegation. Anything more than ten to us was a big delegation. The group included one for sonar, one for underwtaer torpedo and so on, one for avionics for helicopters. They would each then make a presentation, they would run through a technical seminar for about one week. Seven business days was taken up by each group to present what they wanted to sell us. Each morning we traveled to the hotel ands tayed usually until the evening, and there were banquets involved also. On our side were individuals from the army, the navy and the air force. These were very official and very technical. These were big occasions. There was a lot of talk about us being old friends, and the friendship between the two countries and so on. Nobody ever mentioned price, of course. That comes only at the end of the seminar. But at first you have to tell the Chinese side how advanced your system is. NOw the British at this time knew that the French were conducting the same negotiations with us at the same time. They did not like it, but they knew it. And they confided to us privately that they knew this. Sometimes they would run into each other drinking late at night in one of the hotels.

Personally, that was the first time I was involved in a project. And I was familiar with the technological terminology and I understood the system, too. The British company was for assembly, the Lynx helicopter was built by British Aerospace. But the avionics aspects, which is what we were really looking for, we were not looking for the helicopter frame, but we were looking for an airborne torpedo system, the night imaging system, we were looking bor sonar buoys, and for sonar, and this sort of thihng, and the MAD system, Magnetic Abnormality Detection. Anything that is not normal. These were not associated with staellites in any way. They were purley shipboarn ASW helicopters.

This was just business. China is still socialist, you must remember, so officially no women were provided to the individuals as part of the negotiations. If there were women in the hotels, this is not run by the government or the company, of course. Sometimes it is impossible to control.

They gave us a quotation at the end of the seminar. This was a deal worth over more than $100 million for one. That was a non recurring price. But if we purchased two then the price went down. This was a lot of money to us. Actually, all we ever wanted to do was to just buy one and then dupiclate it, reverse manufacture. We sometimes try just to import the technology. The foreign businessmen of course are not that stupid. And so the technology always cost more than the hardware. Sometimes, they wanted us to buy more than one and this would be a requirement. I do know that at diplomatic occasions everything would be tape recorded, openly. Then, after the two offers were made. The top experts and technicians from China were utterly convinced that the Lynx system was the best one for us, and it was the one that we were looking for. So we were all mentally prepared, actually, we hinted to the British, all right, this time you guys have a deal. But, it turned out not that way at all. Because of bribery.

Atg that time, remember the French were attempting to sell us their type of ASW helicopters. But they were, they were called Dolphins, naval version helicopters. These were also called ASW.

The French were more clever than the British in this. The British were businessmen and the French were businessmen in this. But the British were also business gentlemen and the French were not, of course.

The British were just not clever enough. They spoke whatever was appropriate for the occasion. We liked working with them very much, really. But they just didn't know how to make a deal with China. They were, unfortunatley, just too honest. Very honest. This is my own personal observation.

The french were more clever. They knew, of course, that their system was not as advanced as the British. But they knew how the Chinese business system works. And they approached our flreet admirals. They approached our three star generals in the army, during the negotiations and after that, they brought from France many very valuable gifts, (I want to be sure that my security is guaranteed when I tell you this story. Don't play this tape for broadcasting or anything.)

At that time the admiral in charge of the Chinese Navy, in charge of this operation, his name was, now he is Lt. Admiral, but before that, he was chief of the Naval FleetAir Arm, Li Jing. These helicopters, later on, would be used by the Navy, so the Navy had a final say in the negotiations and the purchasing. So they rbrought precikous gifts for us. They would give us a small helicopter, made of copper, but it is not a piece of copper on the table, but the way they made it, it was high tech technology, it was so beautiful. And the other gifts, I don't know, I didn't open them. This was just a model. The admiral himself also received a letter from the French. Only the admiral. All he saw was a letter that said we are looking forward to a successful deal that we have with the Chinese Navy and we hope that this deal will work out between us. Nothing more than that, of course. And attached to that letter, the second page The second page, was a bank draft, a bank certificate. For a lot of money. It was for $300,000 US, but that was not much, really. But that was not the biggest that I'd ever heard of. And the draft was on a bank in Zurich, in a numbered bank account there. This was a certificate stating that the money had been deposited. And it meant that only he could go to the bank and get the money. Only you and nobody else. And nobody is going to question you concerning this. This is safe for a deposit for its security. And the third page oif the leetter was a letter of admission for his son from a French language school. The letter was a scholarship. The letter said that based on our academic evluations of your son, we are happy to inform you that our school has admitte dyour son for the fall semester. And of course, he is an undergraduate(if he was a graudate, nobody would be surprised) and this meant he had a fujll scholarship for the next for years. Now the interesting thing was that they said thag based upon the son's performance in the French language, he had been granted the scholarship. But the interesting thing here is that I knew his son, and his sond did not speak a single word of French. He had served in the army at the time, and I knew this guy very well. But they granted this Mr. Li a full scholarship covering all of his living expenses. The British of course offered nothing more than dinner. So the British were stupid. The French knew how the system worked. For the French, Aerospeciale, they had actually hired a couple from China, as middle men for them. This couple was from Beijing, from the general staff's communication corps. They had served previously as colonels in the communicastion corps and later on they retired. But because of their guanxi, because of their personal connections and their influence, their nowledge of the military vips, they were now hired by the French Aerospeical, and they of course successfully got their osons and daughter sinto universities in Paris,m and they had a very nice life in Paris. I knews this couple personally. Their job, they spent most of the year stationed in Beijing. They lived in a big hotel, part of the year. They had a permanent office, in the Beijing hotel. And they stayed there permanently. their job consisted of nothig more than try to bet more personal information about the generals, the admirals and the high ranking officials in the military. These could, in a sense, grease the weheels of the deals. They would then supply to the French, sometimes to Thomson SCN(Special Commercial Organization.)They would just find out about the personal backgrounds of the individuals who were influential, who was promoted, who wanted to be promoted, who was the boss in a particular deal. they mainted a list of the people who were constatnly on the top, and they were to know the personal habits of individuals. When we were sent off to France, that is another story. Becuase of their funciton the French company knew that the Admiral had a son, and on one occasion, he even went so far as to express intereste in getting foreign schooling for his son. And the French were so smart as to record this in their memory and to underline that in their converstaiton.s And so God knows how much money the company was going to spend on this kid, actually, to send this kid to school and how much tyhey paid this school. Actually I could recall the name of the school. Now what is so funny is that this letter was translated. Everything was translated.

The decision was made promptly, one month later. In a country like China, one month is prompt. We were involved in the negotations, and our advice was completely forgotten and the French got the deal.

The British of course questioned us later about this, about not getting the deal. Of course they were concerne.d And they cautioned us and said that the French. didn't even use their dolphin helicopters on board their own ships. The French Navy never used these. And China ended up as one of the very few countries in the world that actually used Dolphin helicoperts for shipboarn helicopter defenses. It is first of all a pretty big helicopter. And for ship borne purposes,, there are space limitatrionyts, and you have got to have a hangar, and yhou have got to have a landing pad, on the ship, on the aft of the ship. And once the helicopter is big enough you have not much space left for anything else. Becuase a ship is only a ship, especially when it is a war ship. And limits arfe very severe. But the French were smart at the time, they made all quotations in Swiss francs, of the price. And of course not in US dolars and the British quote was in pounds sterling. And later on they said, don't worry, these are only Swiss Francs, and it ends up that their quoation is less than the British, because they give a special converssion rate and they give us a good deal.

The vice admiral was concerned after that as to what had happened. He sent a letter to the Admiral and he approachced the generals on the general staff, and the training and the arms purchases, and it is under.

The admiral would be able to use this, his son and daughter in France can enjoy that. They can go to the Swiss bank and withdraw the cash and the son may buy a home for him there, a resort hideway for him. The father himself, who is a true revolutionary, he personally really could not care less for that sum of money; Like Deng Xiaoping, of course, he personally did not want moneyh. He cannot be bought. But this is for the children and the relatives. Now this is one of the reasons why the old hared linesers are relucatnat to get away from power, the China they realize , once the power is gone, your whole life is gone. In your system here in America, the president of the Us retires, and he may serve as the head of a private organization or a research insittute. But in Chine this sort of thing doesn't happen because once you are on top, it is impossible for you to receded from the top and to settle down to aq secondary position happily. It is absoltuely impossible and psychologically it is impossible for the people to asccept that fact. Once you are ma military commander and now you are in a positoin of runnikng a factory, people would consider your credibility. People would ask what happened to this individual. They would say that you could not make it, you could not handle responsiblitily or power and they owould then lose respect for you and you would lose face in the country. As long as I have power, I can have anything. Or rather, if I have power I can have access to everything. And sometimes access to things is much more import ant than actually having things.

There was a big celebration after the signing of the contract. The parties waited around Beijing waiting for a decision to be made. Both parties waited, and immediatley after the trip, China made a reciprocal trip, with a lot of dignitaries and milirtary personnel from the general staff, including the equipment department, to Aerospecial in France. I did not accompany them on that trip.

They were there to make a survey of the manufacturing facilitites and firms of the helicopter. And the systems attached. But this was just a symbolic trip, since they knew already that the deal was made. The officers from the department were convinced by individuals from the top, or bribed in one way or another, and once the top was in the bag, so to speak, then everyone went to France to pretgend like they were interested in making the deal. They stayed for three days, and then they said as a matter of course that based upon their survey of the manufacturing firms.They were even more convinced than ever that the French had an advanced ASW system and this was exactly the thing that they were looking for.

This was only one of the deals that we made with a foreign firm. How was I treated when I went to France, might serve as a good example. We flew to France on Air France, but not first class. The head of the delegation flies first class. These were the section chiefs of the equipment department of the general staff, and they were colonels, only, and they went in plain clothes. Nobody would ever see them in uniforms. No one was to know that they were in the military, but the French knew. Now then they resided in luxurious hotels in Paris, and sometimes they were just shown around the city to the night spots, and they were escorted to the southern cities at that time. They were taken to Toulon to see the French Navy and they stayed there for a time. But they were looking then for small helicopters, these were the helicopters that were actually flown around Tiananmen Square. They had private helicopters fly them around then when they were there.

The founding of Poly

III

Vietnam War and American Cooperation, Project 85

Profits of the Drug Trade

III

Torpedo Deal with Whitehead in Italy

The Shangri La and Doing Business with Americans

Americans buy the Torpedoes they Want

Pushing On

Saturday, July 2, 2011

Conversations With Chinese Intelligence Officials

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