Helmetmaker Must Hew to Party Line

BEFORE becoming one of Beijing's richest men, Liu Xiang sometimes rode at dusk with a motorcycle gang out of Tiananmen Square and rattled the carved wooden windows of Communist Party headquaters with a roar. Mr. Liu has forsaken the camaraderie and freedom he found amid the thunder of engines and the rush of rubber and chrome. Since building China's leading company making motorcycle helmets, he has fallen out with his fellow ramblers.

Motorcyclists left one of the most rousing images of the 1989 ``Beijing Spring,'' speeding from Army camps outside the capital to warn residents manning barricades of oncoming troop trucks.

But Liu says he supports the jailing of the ``Flying Tigers'' and other bands of leather-clad Paul Reveres. And in a symbolic repudiation of his rebellious days, he now makes riot helmets for the People's Armed Police. The change in Liu's outlook is more than the Yippie-to-yuppie political compromise of some '60s American rebels. His turnabout illustrates how, particularly since the crackdown last June, entrepreneurs in China must work within the narrow bounds drawn by the communist regime.

The protesters last spring ``could have had their demands satisfied without taking such radical steps,'' says Liu, sipping tea in the office of his company headquarters. ``China needs a stable environment, and the government took steps to put down the turmoil that I think were correct,'' he says.

Regardless of what he may truly believe, Liu must betray his wild ways and walk the official line if he hopes to protect his burgeoning business, Soaring Corporation, Ltd.

China's leadership, which once hailed mavericks like Liu as heroes of market-oriented reform, has soured toward entrepreneurs since June. It has closed hundreds of thousands of private firms, stepped up its taxation and control of those that remain, and accused entrepreneurs of evading taxes, selling pornography, and creating vast disparities in income.

So, Liu must cultivate official favor as he launches a bold, multimillion-dollar plan to sell his helmets abroad. By the summer, he plans to open a new $424,000 workshop to more than double the company's output value to $2.1 million and raise the quality of his helmets to international standards. By the end of this year he plans to start delivering the 100,000 helmets he has contracted to make for KAP International in Bellevue, Wash.

Liu ``intuitively understands issues in China where so many people are limited in their scope. Intelligence and intuition are part of a lot of great industrialists, and I think he's one of them,'' says Bob McLinden, director of overseas operations at KAP.

Liu began his street-to-suite climb fresh from high school in 1978 (See June 22, 1984, Monitor), making helmets by hand on the roof of his father's home. The helmets were so popular that he gathered four friends and put them to work in two back rooms of a peasant's house in 1983.

Liu says he now holds more than 15 percent of China's motorcycle helmet market. But, with sales slumping because of the nationwide austerity scheme, he is restless. Once he has a firm toehold overseas, Liu plans to diversify into polo, riding, construction, and bicycle helmets.