Money Machine

Chapter 17Window of Opportunity

There is a Chinese saying that when a vehicle reaches the foot of the mountain, there must be a path through it. The Japanese carmaker Toyota became a household name in China through a multi‐decade advertising campaign by cleverly paraphrasing that saying: There is always a path through a mountain, and there is always a Toyota if there is a path. We did not know, however, where the path was for our share reforms.

About a week after our share reform plan was voted down, I received an invitation for a meeting with the chairman of Ping An Insurance Group (PAIG), the second‐largest insurer in China, about the possibility of a joint investment in China Southern Airlines. On July 28, 2006, I drove to Shenzhen, arriving about noon to meet with Peter Ma, PAIG's chairman and CEO, and Louis Cheung, its president and CFO, at the company's headquarters.

Ma was a paragon of Chinese entrepreneurs. Tall and straight‐backed, with close‐cropped hair and a slight tan, he looked more like a retired soldier than a businessman. He had founded PAIG in the late 1980s and grown the company rapidly. He had brought in Morgan Stanley and Goldman Sachs as early investors, and by 2006, PAIG was a publicly listed company on the Hong Kong Stock Exchange with a market capitalization of about $15 billion.

Ma greeted me warmly. After pleasantries, we began to talk business. I was interested to hear what they had in mind. It soon became clear, however, that the airline was a smokescreen; ...