Chaozhou, Guangdong: Doing business in China
In 1904, successful Teochiu Hakka businessman Cheong Fatt Tze from Malaysia and his cousins Tjong Yong Hian and Tjong A Fie from Indonesia embarked on a journey that would showcase some of the difficulties of doing business in China for an overseas Chinese.
The men invested an initial USD 300,000 into the building of a 24-mile railway between Chaozhou and Shantou. The project was the first to be entirely financed and managed by overseas Chinese businessmen.
The Swatow Railway
Using existing business ties, construction of the project was outsourced to a Japanese company. The locomotives and train carriages were imported from Japan and the United
States. The railway’s senior operations staff were all Japanese, including the drivers and guards, with Chinese staff hired for less important functions. It did not take long before the problems started.
Where to start…?
First, conflicts arose over land acquisition rights. Then, after the construction company had started building the line, discontent grew among local villagers over the lack of compensation for their demolished houses. Tensions were raised considerably when ancestral graves of local villagers were removed. On top of it all, the Japanese workers were accused of harrassing local Chinese women. It was a time when China was already sensitive about being dictated to by foreign powers, but of all the foreigners, the Japanese had a particularly bad reputation. In the 10 years to 1904, the Japanese had committed numerous offenses and invasions in China.
As a consequence, the project incurred huge cost overruns, triggered nationalist student protests and led to the brutal murder of two Japanese workers. While the railway was completed many years later, it continued to run into difficulties and eventually was taken over by Chinese National Railways in the 1920s.
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