March 14, 1995

Cut The Red Red Tape Or I'll Do Me Communist Block, China

ERIC ELLIS, Dalian

GRAHAM Baldock doesn't speak a word of Mandarin. But he reckons he's got a better form of communication for doing business in China's inhospitable north-east provinces: "Good old fashioned Aussie body language."

Bogged down for four days just to get a conservative cadre to sign an unimportant paper, the St Arnaud-based former railway clerk did what every "touchy-feely" China trade adviser says is strictly taboo. "I did me nana," says the plainspeaking Baldock - and with some pride. "I stood up to this bastard and told him in no uncertain terms that I wasn't going to f--- around here forever waiting for him to make up his bloody mind.

"My (Chinese) assistant didn't need to translate."

The cadre got the message, Baldock got the deal, and his grandly named Sino-Australian Enterprises is now the proud partner in three joint ventures in China's grim Liaoning province (part of Manchuria), all of which service the region's growing demand and changing tastes for Western-style products.

One of Baldock's deals puts kangaroo and Australian camel meat on the dinner plates of the Manchurian provinces' smarter restaurants, which makes him an obvious favourite of imageconscious Australian diplomats.

Born in Robert Menzies' hometown of Jeparit, Baldock has taken a unique road for his pioneering stake in China's boom.

Unlike almost all his fellow China traders, Baldock is no big-city operator, directing his China business from the remote Victorian country town of St Arnaud, south of Mildura, where his family runs a trucking business. "I'm the only bloke in St Arnaud who's ever been to China, let alone done business there. The boys at the Rotary Club just sit there with their mouths open."

Baldock's aversion to big cities has kept him out of the main Chinese centres like Beijing, Shanghai and Guangzhou and led him into the Chinese heartland.

His efforts are focused on three smaller cities in Liaoning: Jianping, where he is in joint venture with the city's biggest abattoir; Chaoyang, where he has a skins and leather operation; and the capital, Shenyang, formerly Mukden, with a wool scouring operation.

His big connection is the Chaoyang vice-mayor, and Baldock claims he's not had to produce the proverbial brown paper bag of hei qian (black money) anywhere, although he has been a victim of it.

Baldock became interested in China in mid-1993 after a contact in Brisbane put him in touch with a Chinese-born Australian (CBA) from Shenyang.

The CBA and an Australian colleague promised Baldock the world, and the first venture got rolling with a $US60,000 transfer to a bank account in Dalian and a good-faith shipment of product. The joint venture ground to a halt, the CBA middle-man claiming to both sides that the other was having second thoughts.

Finally, Baldock twigged. The middle-man and his mate were waiting until the joint venture closed down completely so they could walk away with the money staked in the Dalian bank.

Baldock came up to Liaoning, went around the middle-man and mended fences with the Chinese directly. The middle-man and his partner are being eased out of the venture, the money retrieved and the product that was stuck on the Dalian wharf is now on its way. Austrade was fully briefed of Baldock's case and has warned other operators to stay away from the dubious duo.

The experience fitted with Baldock's no-nonsense, bushie's realism about China.

"We're not going to make a lot of money out of here for a fair while, but I'm convinced we will eventually. The wool scouring operation will be worth $A20 million in two years.

"What China is giving us is volume and we can make enough on the margins in Australia to keep things going here. But we need the volume and there is virtually unlimited demand here." The places Baldock visits have rarely seen foreigners, let alone done business with them.

"They're bloody amazing," he says. "I could do 10 times the amount of business here if I had the resources.

"The people here have been let off the leash and they don't care about anything that happens in Beijing.

"I don't even know who the bloody leaders are there. I just keep my eyes open."