DOPE DEALERS IN THE MONEY AGAIN

To the untrained eye, it was no more than one of those so-what stories that
show up on newspaper business pages.

But if you know the background so far, it is the latest development in a
kind of corporate grand opera that has been going on for more than a
century, and a tale of high drama indeed.

The newspaper story said that a company named Jardine's Logistics is close
to establishing a major joint-venture logistics centre in Shanghai, to
service the municipality's booming high-technology industry.

Now, before the rest of the story gets told, it's probably best to answer
the question many readers must have at this stage, which is: "Just exactly
what does a logistics company do, anyway?"

Frankly, I don't know. So I looked it up in the Oxford Dictionary and it
said: "Logistics. n. pl. Art of moving & quartering troops (cf. STRATEGY,
TACTICS), & supplying and maintaining a fleet."

So now I still don't know-unless the Chinese are hiring a private company
to run their army and navy, which I really don't think they're doing. The
story I read hints at similar activities in the civilian world, but doesn't
specify any of them. You see stories like that on the newspaper business
pages all the time.

Boring, right? Well, maybe it is if you don't know who Jardine's is.

Actually, no-class dope dealers is what they started out as. Two Scotsmen
named Jardine and Matheson, covertly ran opium into China from British
India-which started the Opium War (in which Britain miraculously defeated
China)-which in turn led to the breakup of the Chinese Empire and the
ceding of Hong Kong to Britain as a Crown Colony.

Hong Kong was founded on behalf of Jardine Matheson and a rabble of other
drug smugglers whose companies still form much of the city's economic backbone.

Eventually the opium business was outlawed, but by that time, both the city
and Jardine's were so well-entreched it didn't matter. For 100 years and
more (excluding the Japanese occupation during World War II,) Jardines
truly held the power in Hong Kong. More power, some said, than the colonial
governor.

Throughout those years, China had an attitude about Hong Kong. In the dying
days of the Ch'ing Empire it was merely one of a multitude of problems; in
the days of the freewheeling Treaty Ports and extremely weak Chinese
administration, it was either a bothersome foreign enclave or a great place
to plot against the government.

After Chairman Mao's communists took over the mainland in 1949, both Hong
Kong and Jardine's (officially, anyway,) dropped right off Beijing's social
register. (Though Beijing did keep in touch with both. At the depth of
Chinese isolation from the Western world, the country was making 40 per
cent of its foreign exchange money from Hong Kong. You don't mess with that
kind of arrangement.)

From the official Chinese viewpoint, however, both Hong Kong and Jardine's
were considered beyond-the-pale, hopelessly decadent capitalist
organizations run by white-skinned pigs who definitely required re-education.

That's what it was like when I first went there. And then two things
happened: After Mao died China started moving toward free enterprise, and
Britain made a deal to let Hong Kong revert to China in 1997.

And, unthinkably, Jardine's moved its official corporate headquarters out
of Hong Kong and into one of those Caribbean tax havens.

And were the Chinese sore about that, or what? I mean, there goes the
MONEY! Within hours there were bleats of complaint from Beijing and
thereafter for many years, Jardine's was officially treated as if it was
still peddling opium.

And now this. Jardine's is not just back in China's economic picture, it's
at the centre of it all. The company's 250,000-square foot distribution
facility will be located in the Pudong district, home to many of China's
attempts to further open up its services sector.

Furthermore, the company last year announced it would move the headquarters
of its China operations from Hong Kong to Shanghai, a consistent growth
engine and emerging logistics centre. So it would appear that Jardine's is
once more solidly in favour with the folks who run China, and we can do
nothing but wish them well with this Jardine's Logistics endeavour.

Whatever it is they do.