Overseas Investors Spark Praise And Protest in Fujian Province

THE small band of demonstrators shuffled uneasily on the sidewalk, watching giant cranes swing high above the construction wasteland that used to be their homes and stores.

Every Sunday for four months, residents and shopkeepers had gathered in Fuzhou's Riverside Park opposite the 15-acre building site to oppose the loss of their neighborhood to a commercial development called Yuanhong City.

But this protest never got off the ground. As pile drivers resounded across the prime downtown property, police moved in to block the embarrassing outburst against developer Liem Sioe Liong, an Indonesian and one of Fujian Province's foremost native sons.

``Some residents say Liem Sioe Liong has come back to take his revenge on us,'' protest leader Dong Youdi bitterly says, complaining that residents have gotten poor compensation and had to relocate in remote parts of the city. ``Others say this is one of the downtown centers. Why should we let a foreign businessman develop it?''

Two hours' drive southeast of Fuzhou, Mr. Liem's home village of Niuzhai has also been transformed.

The Indonesian - regarded as somewhat of a local deity - has built schools, hospitals, sanitation plants, and power generators.

He has literally moved a small mountain of earth to build a medium-sized seaport on the coast 11 miles away. And he is developing a 30-square-mile industrial zone, China's largest, to draw overseas investment.

``The difference is like that between heaven and hell. Before the people were in rags, They didn't have enough to eat,'' recalls Zhen Xueqing, a primary school principal who was born in the village. ``Now you can see televisions, watches, refrigerators, and bicycles everywhere.''

Yet residents still look askance at Liem's land dealings, which have netted him 2,000 acres ``for virtually nothing,'' an Indonesian partner says.

The one-time farming and orchard center now has less than 1,000 farmers, who nervously watch officials give large tracts of land to overseas businessmen for bribes and favors.

``There are many complaints about Liem in the village because he got the land so cheaply,'' an area resident says. ``The people here call our local officials `the betrayers of China.' ''

Amid simmering local resentment, Liem and other overseas Chinese are reshaping the economic landscape of southern China. Fujian, the ancestral home of 8 million overseas Chinese, including most in Indonesia, was one of China's poorest provinces as economic reform began in the late 1970s.

Now, in a pattern repeated along the eastern Chinese seaboard, the economy is growing at more than 25 percent annually, and Fujian has become second only to its larger neighbor, Guangdong, as a destination for foreign investment.

According to the official Economic Daily newspaper, more than 11,000 foreign joint ventures totaling $17 billion have been approved in the province in the last 15 years, although less than one-quarter of that amount has been invested.

Most overseas Chinese still have larger investment beachheads in the United States, Australia, Hong Kong, and Taiwan. But with opportunities declining in their adoptive countries, these multinational conglomerates turn increasingly to China, where they utilize their regional networks of capital and clan contacts in the backroom dealing that has become their signature.

``One major misconception is that overseas Chinese ethnic links are the main motive for investment in China. That's not true. The main motive is to make profit,'' says Nyaw Mee-kau, economist at the Chinese University of Hong Kong.

Liem is one of Asia's best-known dealmakers. Son of a Fujian peasant, the petty trader moved to Indonesia as war was breaking out between Japan and China in 1937.

He started selling peanut oil, expanded into coffee and cloves, and laid the foundation for his business empire by smuggling arms for Indonesians fighting for independence against the Dutch. One military officer he came to know was Suharto, the future president of Indonesia.

Today, Liem's Salim Group is inextricably intertwined with his patron, Suharto, and members of Suharto's family.

Known by his Indonesian name Sudono Salim, Liem is the biggest private sector player in Indonesia and the center of controversy over ethnic Chinese dominance of the economy.

And just as he curried favor and influence in Jakarta, he is now doing so in Fuzhou and Beijing. When he makes his occasional visits, he is accompanied by Fujian's top officials. Senior Chinese leaders have inspected his industrial park.

But officially, Liem's investment in Fujian does not exist. Officials disavow any Indonesian investment here, deferring to the businessman's fears of a backlash at home. Some of Liem's family use pseudonyms when investing or donating to home villages.

At his renovated ancestral home in Haikou township, a cousin was asked about the magnate's childhood in the village and shook her head: ``I can't say anything. Family code.''