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Chapter 1: "Call Me Jackal"
Meeting in Dotcom Heaven. The scene is set
By Graham Earnshaw

 

Introduction Chapter One: "Call me Jackal" Table of Contents Contributors The Dotcom Cast Reviews

"Call me Jackal."

A grin of relief spread across the gritty, weather-worn face of Stone Daw. The Texan had been struggling with people's names since his arrival in Hong Kong the day before. Any recognisable first name, even a rather strange one, was welcome news.

"Well, thank you kindly. I am Stone Daw III," he bellowed, grasping tightly the hand offered by Jackal Gao. But the Chinese man's somewhat greasy smile quickly collapsed into a pained grimmace. Jackal wasn't accustomed to the full-on, oh-so-sincere vice-like handshake of the all-American business community."

I hope this guy doesn't exert this much pressure on the company if he invests in us," Jackal couldn't stop himself from thinking. Releasing Jackal, the Texan venture capitalist strode further into the room. Wearing cowboy boots and jeans, and a comfortable shirt and jacket of a cut and colour that said money, confidence and new economy power, Daw was confidence personified.

They were meeting on the 198th floor of Get-Rich-Quick Square in Hong Kong. On the table in front of Stone Daw was a business plan outlining the proposal to launch a Mao memorabilia e-commerce website for Greater China - a Mmortal, as the industry would call it. Jefferson Huang, the newly-appointed Chief Executive Officer of the company, started to explain the idea.

"What about the intellectual property issues related to Mao memorabilia?," asked Daw.

Lao Zhang, Jefferson's uncle, the manager of the Shanghai Number Two Mao Memorabilia Factory, intervened. "No problem. This is China," he said. Those words would come back to haunt them all later.

"And politically, isn't it sensitive?"

"I am well connected. I have obtained permission," Lao Zhang reassured Daw. But he was lying.

"OK. That sounds good," said Daw. He was a tough Texan businessman, but he did not understand China. To him, Lao Zhang, sporting one of the world's worst ties, seemed like an entrepreneurial Chinese guy, trying to change the system.

"This dating service, though, isn't there a risk of lunatics coming in and raping and murdering women?", asked Stanley Chen, the angel investor.

Jefferson waved the question aside. "Not in China," he said.

"The other feature of MaoPortal.com is the Mao news service," Jefferson continued. "And the whole thing will be WAP compatible".

"A news service," said Stanley slowly. "But there are regulations prohibiting websites that provide news from sources other than State-sanctioned official media, aren't there?"

"Look," said Lao Zhang. "Just don't worry about these things. I am the manager of one of the largest State-owned enterprises in Shanghai. My best friend is the Vice-Mayor. I am the Party Secretary of my factory. It's all under control". He was beginning to get anxious about the questions that were being asked. Fortunately, however, the foreigners did not push their questions any more, at least for now. To their later regret.

While this conversation was going on, Jackal thought about his plans for the future. His vision was not necessarily in tune with that of Jefferson. He dreamed of being the guy at the top of the table giving the PowerPoint presentation. Watch and learn, be patient, strike when you spot the chance, he told himself.

Jefferson may have the credentials for this business - born in Shanghai, college in California, MBA, job with McKansey Consultants. But, Jackal thought to himself, Jefferson is really a naïve amateur. He doesn't know how to run a business. He hadn't got the guts.

Jefferson ended the PowerPoint presentation. "We see MaoPortal.com as a real fun project," he said. "We hope you will join us for the ride."

Stone Daw leaned across the table and stabbed him with a look filled with silicon daggers.

"Son, I am not here for the fun," he told him coldly. "If I give you my money, I want to look after it, and grow it. Business is serious, and don't you forget it."............

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Portal power - what can a portal do?

A foreign-invested enterprise (FIE) is only allowed to engage in activities within its scope of business. Portal business models can involve combining a range of products and services. This raises the question of whether the FIE is permitted to engage in these activities.

News - A portal may create its own content or may source it from various content partners and aggregate it. Restrictions exist on websites publishing original news content and hiring cyber-reporters. Websites can only source news content from approved State media. Websites in the PRC are not permitted to provide links to foreign news content. 

Advertising - A portal usually carries banner advertising and hyperlinks. The State Administration of Industry and Commerce (SAIC) and its local AIC branches is now organizing pilot projects looking to regulate online advertising.

E-commerce - This covers online shopping (including virtual storefront agreements with traditional bricks and mortar retailers), online auctions, business venues (such as matching buyers and sellers of commodities).

FIEs are restricted from engaging in domestic trade. A portal can act as a principal (i.e. it has purchased the goods and is selling as owner) or as an agent (in which case the sale is made directly between the seller and the customer). The portal takes a commission from the sale. Where the portal acts merely as an agent, it could be argued that the FIE is not engaged in domestic trade. However, as Seung Chong of Freshfields in Beijing argues, "it is not clear whether this distinction is realistic in this context. For non-FIE websites engaging in online business, the SAIC (or the local AIC) is the relevant approval-body."

Recruitment - Job listings and other recruitment services online require licensing by the labour bureau.

                                                                   - Asia Law & Practise

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AsianConnections thanks Asia Law & Practise, publisher, for providing excerpts of The Life and Death of a Dotcom in China. Order your copy from Amazon.com today!

Order your copy of The Life and Death of a Dotcom in China today!