Huan Hsu - The Porcelain Thief

Eventually I gave up my search for an English name, but I did acquire one of sorts, as I became known around the company as Li Xiao Long, or Bruce Lee. I learned of this from another ABC at the company, who told me that the entire human resources department referred to me as the kung fu movie star, owing, I supposed, to my shaggy hair. In fact, he said, my given name usually elicited blank or confused stares. But when he said, “You know, that ABC guy with the long hair,” everybody smacked themselves on the forehead and said, “Oh, you mean Bruce Lee! Why didn’t you just say so?”

EXCEPT FOR THE final afternoon of my orientation, when Richard had given a short presentation to the new employees on the differences between a mercenary and a missionary (“I hope everyone here will be a missionary, not a mercenary, ” he said), I didn’t see my uncle much. I sometimes encountered him in the hallways, dressed in his usual work outfit: loose-fitting black pants; a light-colored short-sleeved dress shirt with his identification badge clipped to his collar; a chunky multifunction metal wristwatch one or two links too large, requiring him to constantly shake it back up his right arm; and black leather shoes with round toes and rubber soles. His only sartorial concession was his hair, which he dyed black, a popular practice among aging Chinese executives and party officials. A retinue of important-looking people dangled around him like eager accessories. If he noticed me, he’d wave and remind me to “be a good boy.”

Despite having told Richard from the beginning that I was coming to China to look for the family’s porcelain, he seemed to consider it a waste of time, aside from the filial component of talking to my grandmother, disbelieving that I could possibly be more interested in that than in all the opportunities his company afforded. Whenever I brought up the subject of the porcelain, he got so annoyed that I stopped talking to him about it. Still, I understood and respected his sensitivity to any appearance of nepotism and was happy to be just another employee, especially when I saw the way some people would react—sensing an opportunity, shying away, or projecting their animus toward him onto me—when they found out I was Richard’s nephew.

For all the money behind Richard’s company, it was hamstrung from the start. Because he had hired many employees from the major competitor, TSMC, which had acquired his first company, TSMC sued him almost immediately, claiming that he stole intellectual property via its former employees. It didn’t help that the name SMIC—which Richard insisted be pronounced as an acronym and not as a word—had a certain Even Better Than Movie World ring to it. In 2003 SMIC paid a $175 million settlement. But a year later TSMC sued again, claiming SMIC had broken the terms of the settlement and alleging more intellectual property theft; that suit remained unresolved when I arrived. The party line at the company was that the lawsuits were frivolous and the cost of doing business; being targeted by the top dog was a kind of honor and Richard was noble for settling in the first place to avoid a protracted battle. Some Christians at the company even cast the lawsuit in terms of spiritual warfare, a tribulation that would eventually be triumphed over by faith and good works.

Amid the legal wrangling, the company went ahead with a much-anticipated IPO in 2004; the demand for shares was 272 times what was issued. On the day of the IPO, Andrew and a group of expats gathered at his apartment to rejoice—they were about to become rich. But as soon as Scarlett helped ring the opening bell on Wall Street, the stock price dropped 15 percent, and what should have been a celebration turned into a wake. The stock price never recovered. “It was one of the worst days of my entire existence,” Andrew told me. “If anyone should be pissed, it’s me. I’ve paid a huge price. I’ve taken years off my life by living here.” At the time of the IPO, he had transformed himself into a marathon runner. Then he caught a cough he couldn’t shake, began coughing blood, and was diagnosed with tuberculosis. He spent half a year convalescing and didn’t run much after that.

By the time I got to Shanghai, the stock options that my other uncle, Lewis, had once castigated me for turning down were trading at less than a third of their IPO price, an all-time low. Despite Richard’s ambitions, the company had only a handful of profitable quarters since its inception, and his investors—the Chinese government among them—were growing impatient. Yet for the prohibitive start-up costs—a single fab could run upward of a billion dollars, and SMIC operated half a dozen of them—and the crushing pressure to consistently produce more for less money, chip making was paradoxically a long game. I often wondered why Richard chose to take on such an endeavor. The easy answer was that he knew something others didn’t, that the conditions were right to fill a vacuum, and that he, perhaps due to some kind of Christian exceptionalism, believed he could succeed where others couldn’t. I guess that part ran in the family.

Unable to win big high-margin orders, the company relied on cutbacks to help balance its books. Richard never passed up the chance to remind people that the reason a rival foundry in the technology park, backed by the sons of Taiwan’s second-richest man and China’s former president Jiang Zemin, respectively, had floundered even worse than SMIC was because it spent too lavishly, citing the widespread provision of company cars and laptops as prime examples. So at SMIC the bathroom taps gave only cold water, the paper towel bins were empty, and the soap dispensers usually were, too. Workmen went through the office suites and removed every other fluorescent light from the overhead banks. They turned off the hallway lights and air-conditioning and disabled the area thermostats. Only facilities management could activate the air-conditioning and didn’t dare to even on the most sweltering days; one meeting room had its thermostat set at 88 degrees in the middle of summer.

Like many Chinese, Richard didn’t equate time with money. His assistants spent entire afternoons trying to save a few dollars on airplane tickets. (Unless someone else was paying, Richard flew coach.) Purchase orders for as little as fifty dollars had to wait for his approval first. Even the supply of company tchotchkes was kept in his office, and only special occasions warranted their gifting. The entertaining budget for the sales department was capped at thirty RMB per person, or roughly four dollars. That was typical Richard, noble in his unwillingness to wine and dine or dirty-KTV (the karaoke with “companions” that highlighted many Chinese business trips) his way to business deals and unconcerned how it was perceived.

Had I not been related to Richard, I probably would have found his habits endearing. And I did feel a certain protectiveness when disaffected former employees criticized him. He certainly didn’t fit the profile of a CEO, especially in China, and visitors almost always found him disarming and refreshing. While other CEOs traveled by chauffeured luxury car (Communist cadres favored black, German-made sedans), Richard drove himself to work every morning in a white Volkswagen Santana, the same model as the Shanghai taxi fleet. He didn’t have a designated parking space because he didn’t need one—he was always the first to arrive. He also tried to minimize the environmental impact of his company with schemes befitting an eccentric genius—as soon as he was old enough to manipulate small tools, he had dissected every electric appliance the family owned, studied their innards, and reassembled them in perfect order. He spun off an energy company that used scrap wafers from the fabs to make solar cells. The factory rooftops housed solar panels, wind turbines, and a rainwater-recycling system. Instead of lawn mowers to trim the company’s grass, Richard kept a herd of goats, which he never hesitated to mention had the added benefit of excreting odorless fertilizer. An American technology reporter based in Shanghai told me that he always enjoyed talking to Richard, whose inner nerd and disdain for bullshit frequently led him afield from carefully prepared talking points; the reporter described him as a small-town diner owner who just happened to be running a billion-dollar tech company.