China Dawn: The Story of a Technology and Business Revolution [NOOK Book]

With Rice and Rifles

It is the summer of 1998, when the futuristic Capital Airport is under construction across the tarmac, so our 747 parks at old Beijing Terminal, a blocky warehouse with the unmistakable design flair of Stalinist China: emaciated green. After maneuvering through immigration, I am met by a chauffeur. As instructed, I follow him outside to a scuffed charcoal Buick. He holds open the rear door and speaks a rehearsed greeting in English: "Welcome to China. Fasten your seat belt."

Rarely have I received advice that is more prescient. The driver, like the mass of Beijing drivers, attacks the gas pedal and horn with equal glee, untroubled by lanes, one-way signs, or roadway shoulders. A small jade charm, like a glass Life-Saver, dangles on a red string from the rearview mirror. For safety. Over the course of the harrowing drive along tree-lined highways, we narrowly miss a man on a rickshaw, a van that transports people and split pork carcasses, a truck spilling green melons, and hundreds of bicyclists, including one who is balancing sheets of corrugated metal on his head.

The car speeds by a building-long sign of the times, a mural depicting a farmer with a hoe alongside a technician soldering an integrated circuit. The title painted in slanted red lettering: agriculture, technology' hand in hand working for the country. Mottoes like this one, ubiquitous on billboards and banners, are as stilted as the slogans from the Cultural Revolution that implored the Chinese to embrace Mao Zedong Thought and denounce the imperialists (us!), "capitalist roaders," and their running dogs.

Pedestrians leaping for their lives, the car tears into the financial district of Beijing with its wide boulevards lined by buildings shimmering in the sunlight. (They are sparkly on this ultra-bright, almost luminescent day. I will see them soon enough in their more normal state, clouded by grimy brown Beijing haze.) The car skids to a stop on -- that's on -- the curb of a crowded street lit up with megawatts of street lamps and blinking ads for noodles and dot-coms (click and get sick reads an inexplicable billboard). I jump out and duck into a traditional restaurant with red balloon lanterns with yellow tassels and a round doorway. Inside, there's Bo.

Facing three men around a cuneiform dining table in an undecorated private room, Bo sticks out among the gathering. He has a fresh buzz haircut, titanium-framed glasses, and an improbable Nike ensemble, while the others wear short-sleeved shirts, dark pants, and black shoes.

Bo introduces me. Sitting at the corner of the wedge is Edward Tian. Next to him is Liu Yadong, a slightly taller and thinner man with high cheekbones and a pinched face, a pale complexion, and a floppy pompadour. Bo says that Liu is Edward's old friend and his company's chief operating officer. The other man is Gong Hongjia, youthful in his mid-twenties with a broad face and a thick broom of jet-black hair. Gong, I'm told, is the founder of a successful start-up. He founded Dekang to market software he developed to bill telephone calls just as the wireless boom began in China. He has 30 percent of the market and sales of $6 million. "Gong Hongjia's company is the leader in its field, but there is growing competition from abroad," says Bo.

Gong looks up and half smiles. "Yes," he says. "We are fighting harder. We are fighting with rice and rifles."

Mao once said that the people of China would persevere against the far better armed forces of Chiang Kai-shek's American-backed Kuomintang army "with rice and rifles." At Gong's appropriation of the Maoism, the group laughs heartily.

"That's us fighting the West," says Gong, now solemn. "But make no mistake. Intel, HP, Microsoft, Oracle, and the others assume that China will be theirs, but they underestimate the Chinese entrepreneur."

Bo adds, "Most foreign companies hire a group of highly paid executives who live in $10,000 a month apartments in Shanghai. A lot of U.S. companies send over a sales-and-marketing team and think they'll nail China. They don't have the awareness or the drive that the Chinese entrepreneurs have. There's no comparison between entrepreneurs who run businesses in China and U.S. companies that have outposts here."

He orders dinner and we watch a young waiter stick his hand into a glass case that is teeming with vipers and "eye" snakes. He snatches one tightly below the head and carries it, its body whipping and writhing, away into a back room. The snake appears later on a platter. There are crispy bony chunks grilled and painted with sweet vinegar and shallot sauce. The snake's skin, thinly sliced, has been tossed with cucumbers in a salad. Each person is presented with a pair of tulip shot glasses filled in turn with crimson red and cloudy yellow liquids. One holds rice wine mixed with the snake's venom and the other is rice wine with its blood. Bo lifts his glass and the rest of us follow him. "To China," he toasts, and we drink down the bloody elixir, which travels simultaneously down my spine and straight to the backs of my eyes, which tear up. Bo has an enormous smile. "Now you are Chinese," he says. The others laugh uproariously and Bo says, "You'll have wild dreams tonight."

Alongside upholstered Nokias sit plates of the snake along with lobster sashimi (the lobster is still moving) and baked tortoise. Chairman Mao once said, "The Revolution is not a dinner party," but this one appears to be. It is a feast fit for heads of state, or in Bo's case one of China's first dedicated high-tech VCs.

It strikes me that this meeting would have been inconceivable only a short time ago. Venture capitalists may be a familiar breed in the West, but Bo is still a rarity in China. For most intents and purposes, Bo is like his brethren in Silicon Valley. Like them, he provides key resources -- capital, advice, and leadership -- to promising companies for equity and fees that, if all goes well, lead to an "exit" (read that: a killing, preferably an acquisition or an IPO on the Great Wall Street) for his investors. However, unlike most Stateside VCs, Bo speaks both as a player and a patriot...