Businessmen Are Cautious About Returning to China

MOST American executives are waiting for evidence that they can do business as usual in China before renewing the trade that they still view as profitable in the long term. Take Gustel Fischer, the president of TriHawk Corporation, for example. He flew into Beijing on June 4 during the massacre in Tiananmen Square. He planned to exhibit dental drill bits at China's largest medical trade show, anticipating a repeat of a successful venture a week earlier in Beijing at the World Dental Congress. He flew out June 6 and canceled TriHawk's booth at a Shanghai Sinomed show scheduled for this month.

``I always believe you should not mix politics with business,'' he said from his Los Angeles office.

The medical trade show never opened in Beijing. It has been rescheduled for next April.

Dismal immediate marketing prospects also led Cahners Publishing of Newton, Mass., to suspend printing 24,000 copies of Electronics Business, China Edition.

``It's not a good time to take the lead in China business,'' says Xiong Xiaoge, managing editor. ``Some think if you return you might make a big fortune, but to the best of my knowledge this regime will not last very long.

``There's a lot resistance. People are going to work, but not doing much. They don't even have enough willing hands to publish an eight-page paper. The media have changed a lot in China. They don't want to lie to the people.''

Over the past decade, the United States, Europe, and Japan have invested $11.5 billion in China. US managers of China operations have invested $3.5 billion alone and American high-tech trade is worth $1 billion a year.

The US-China Business Council continues to field 25 to 30 calls a day from companies concerned about China investments and the danger of sending back expatriates. The council advises patience.

``The Chinese government is promising companies business as usual, but we're waiting to see the deeds,'' says Richard Gillespie, vice-president of the US-China Business Council. ``The dimensions of the Chinese purge are not yet set and are still being expanded.''

Government authorities have executed as many as 27 people and arrested more than 2,000 others labeled ``counterrevolutionaries,'' a term used during the 1966-76 Cultural Revolution. President Bush banned defense-related sales to Beijing earlier this month and urged international development agencies to postpone loans to China. Most US companies are abiding by a State Department advisory against a return to China until dangers abate.

Neil Weigel, president of Beijing Washington, an agent for US mining companies, made a brief visit to Shanghai at the end of June.

``The Chinese are doing a lot of talking about how things are normal,'' he says. ``They aren't.''

Even if the hard-line regime gives way to reforms, Mr. Weigel says it will take a long time for economic relations between the US and China to mend.

``Businesses will look at China considering the possibility of losses, rather than wins,'' he says.