Pig iron contract; signing of our first deal with the Chinese

Dinner diplomacy by the Chinese authorities led to the signing of the first deal for pig iron supplies from China. This is the sixth part of the series describing the travails faced when setting up an international business in the seventies

As we were planning for the big meet, we tried several times to get through the operator to get our call through, and even made an attempt via the reception. All that Amanda was told that some atmospheric disturbances are preventing our calls.

Vijay and I had long discussions on the quantity, price and delivery aspect and we were determined that we should be the first importer of pig iron from China. We were hoping that if the deal goes through, we could invite their people to visit our plants in Agra (some of them had read about Taj Mahal) and then persuade if we could somehow manage and get their agency for booking orders for them. Our ideas and hopes were really running wild.

The discussions began in great spirits. They bargained very hard, for even a dollar reduction per tonne, they had to have private consultations and so on. When it came to delivery commitments, again, they would go into animated discussions first, refer to some higher authorities in the factory before they could come to some delivery/shipment projections. When they raised the issue of shipment delays, we had to put our foot down and ensured that all related banking expenses for amendments and extensions will be to their account. 

Then our meetings came to an abrupt stop and they had received some urgent messages and some of them were called for overall consultations. Once this was over, came the bombshell that they wanted to finalize the contract on that day itself and be provided the Letter of Credit (L/C)details,  In India we could arrange to open the L/C with proforma invoices and application to the bank, and best of the banks would still take a few hours before opening an L/C for a million dollars or (a little) more. We were momentarily in a fix.

Since their price was attractive and delivery promise in line with our own requirement pattern, we agreed to have the L/C opened from Dubai, and even provide a banking confirmation by telex. This sort of negotiations were going on, back and forth, we were tired and feeling hungry, but we wanted to complete it before we took off for lunch. Just then, some deputy came rushing to say that he was able to get the phone/telex lines through to Dubai and asked if we wanted to make a call or send an urgent message. Since our office knew the basic details, I asked them to get the bank to send a brief L/C opening confirmation.  A little later, we had a banking confirmation that the L/C had been established and will be couriered down to Beijing in a few hours. I had also given the quantity, grade of pig iron and delivery schedules.  Other standard conditions would be apply, as usual.

We returned back to the hotel with the basic contract of purchase and, on the whole, elated with the deal we had made. Since meeting the minister involved diplomatic protocol, we were having a general discussion, and Amanda confirmed that necessary information had been passed on to their liaison man, about choice of food, preferences, etc, as they had sought this information, Only one was a pure vegetarian, and I was a ‘restricted’ non-veg. And, we were looking forward to meeting this high official in the evening.

In good old days, way back in the 1960s, there were many Chinese restaurants in Calcutta. We used to regularly visit the one in Park Street. These were run by Indians from Chinatown (they are Chinese origin, alright), but I suppose one cannot compare Chinese in Calcutta to authentic Chinese in Beijing, and their cooking. We were anxious and apprehensive of what was in store for us. 

For me, the next real Chinese meal came when I was a visit to Hong Kong, a few years ago. The Indian contact of mine had met me at the hotel and taken me to a restaurant called the "Green Cottage Restaurant", in Queens, where everything was vegetarian. My host, apparently, was a regular visitor, and was well received and the hostess gave us an immediate table. I could see a couple of glances exchanged between the two, and, in no time, she had removed my chopsticks and replaced them with spoon, fork and a knife. Well, I wanted to learn and eat with the chopsticks and requested the hostess to get me the chopsticks and also a small quantity of green peas. Both looked surprised, but, she readily brought them. My host explained how I should hold these and in the next 15-20 minutes or so, all I did was to learning to use the chopsticks to pick peas by peas and eating them. Initially, many fell in the plate; some in mid air and so on. Since I stayed in Hong Kong for a few days and then on to Taiwan before returning back, I managed to eat a meal or two wholly with chopsticks.

However, during my current visit, I did not exhibit my ability in front of Amanda or Vijay because I was truly not very sure, but yet, I had to urge to expose my capabilities at the right time.

Around 6pm we were taken in the coach to meet the high officials. I do not remember the names, and hardly any of them gave us business cards, which, again, were in Chinese. The discussions and exchange of greetings between our two great nations continued for a little while, before being ushered into a large hall, where, right in the middle was a very large circular dining table.  Seating was done by them, and names displayed in Chinese. The minister sat, let us say, in the centre; to his right, Amanda sat; to her right, I was located; to my right Vijay and to his right Chinese lady who spoke English and who had met us in the first three days.  To the minister’s left, sat Lam; to his left, four Chinese officials, three of whom we had met in the last several meetings.

We were offered both locally made beer and imported scotch; Vijay and I had scotch and the minister joined us; but he hardly had a sip or two during the whole evening. The food was nice, and the minister kept assuring Vijay that all that he was being served were vegetarian items.

He was happy that I was using the chopsticks in a reasonably acceptable manner and was hoping that the food was spicy enough for Indian tastes. General exchange and conversation followed in a very pleasant atmosphere, and, once in a while Amanda would look and tell us about the items/delicacies being served.  

It is not very easy to hold spaghetti with chopsticks; they were always sticky and slippery, besides being long. I have enjoyed these while in Rome and Milan in one of my European trips, but never had pasta which looked like it was fried and spicy. I looked up Amanda for her comments. She mumbled: the minister is watching you just eat it, you will find it nice and tasty.   Well, with her assurances, I pushed it through and to be honest it was nice.  As the minister was looking at me still, I smiled at him to say that it was nice and tasty. He beamed.

At the end we wound up our dinner with a Chinese liqueur, which was nice, and thanked the minister for his hospitality, co-operation and generosity for sparing his valuable time, and hoped that this would be a breakthrough in our relations when the pig iron start arriving in the country.

The next day, we spent some more time in the Handicrafts Centre, Great Hall of the People, Ming Dynasty palaces and so on, before we caught our flight to Hong Kong.

Upon arrival, we collected English newspapers of the day, and even before going to our rooms, sent a telex for Dubai office to call us by phone.

The first shock was that the government of India had stopped the import of pig iron under OGL, and the notification was effected on the very day we reluctantly signed our contract because of the firm deadline for acceptance that the Chinese had given us. But because of the protests from the trade and industry, there was hope that imports would be allowed if the L/C had already been established. This was very upsetting.

When Vijay raised the issue as to what happens to the L/C that your office has established? Well, I said, I took the precaution of putting an inspection clause; in that either you or me should visit, inspect the goods before shipment. So, simple we won’t go for inspection, because I became a little suspicious when they forced the issue, gave us short notice and suddenly claimed that phone lines were working. I have a feeling that their embassy must have got the information first thing in the morning and because of the time difference, passed on the same to Beijing,

At the Kai Tak airport, we had checked in our baggage and waiting for the flight announcements, Vijay was returning to Agra, and I was on a direct flight to Dubai. Amanda was with us showing us some photos that she had taken. Mr Ram, how did you like the spaghetti? Why, it was nice.  Well, you know, you had confirmed your choice of fish, sea food and chicken; so what you really enjoyed was not spaghetti, but baby octopus!

I laughed all the way to board my flight.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at [email protected].)

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