New hotels for Canton, China: Hong Kong is the key

Almost exactly two years ago, several of the biggest international hotel companies excitedly announced they had reached an "understanding" with the Peking government to build a series of luxury hotels throughout the People's Republic of China. The room count ran into the thousands and could at last open up china to real tourism.

But then nothing more happened. With embarrassed mumblings, the managements of the big US hotel chains had to excuse away the fact that they really didn't have the contracts they though they had. A shortage of foreign exchange and a need for other, apparently more important projects under the sweeping Four Modernizations program were among the reasons offered

Yet, On Shamein Island, site of the French and British trading concessions in the late 19th century, constructionis under way on the White Swan Hotel. The island is in the Pearl River in downtown Canton.

The $40 million, 28-story property will have some 1,000 guest rooms and many design features resulting from the efforts of the Los Angeles-based Hirsch/Bender & Associates. The hotel is a joint venture of Hong Kong interests. A tall, bamboo fence surrounds the job site with a sign scrawled in english reading "Inspection Declined," which politely translates to "Keep Out." Pilings are now in and a bridge to link the island with the adjoining Yanjiang Road is well along.

And in Peking, site clearance is ready for the Great Wall Hotel, a 21-story, 1,000-room affair that carries a $78 million price tag. Becket International, a wholly owned subsidiary of Welton Becket Associates of Santa Monica, Calif., is half owner and architect for the project, and construction management is being done by another of its subsidiaries.

How come? What have these folks done that the giant hotel corporations didn't? Outsiders don'tknow all the details, of course, but one thing that might be viewed as important is that these two projects -- and other industrial efforts -- all employ what may be facetiously called the Hong Kong Connection.

Chinese companies based in Hong Kong play a role, it seems, in virtually every successful international commercial and industrial activity involving China. In many instances the Hong Kong organization is solely involved with the Peking trade agency. In others, management, technology, and finances come from a third country -- the United States, Japan, or some European nation -- but a Hong Kong enterprise is a partner.

This all makes good sense, experts say. "Dealings in China are based on common sense and goodwill, plus a full understanding of what the Chinese want, need, and the way they operate," says Theodore Piastunovich, an international businessman in Hong Kong with long experience in the Far East. "The spirit, not necessarily the letter, of a contract is what counts."

A Chinese who speaks the same language and even precise dialect as the government officials with whom he is dealing has an obvious advantage. More important, he probably has family connections and friends within the Peking bureaucracy, which can't help improving prospects of success.

There may be literally hundreds of companies in Hong Kong engaged in business and industry with China. Some may be individual entrepreneurs dealing with some little community where they have goods processed. Others are giant concerns with their eyes on the almost endless number of projects that China will require in the years ahead.

Peking is obviously eager to have foreign technology, management know-how, and badly needed capital to speed along its modernization programs. But the Chinese want to retain control over their own economy and are still understandably wary of some fast-talking foreigners.

Far better, they feel, to deal with their fellow countrymen who live abroad, know the ways of the foreigners, and yet understand and probably sympathize with the economic and social aspirations of the communist Party.