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'We've really toughed it out, I tell you' In more than 10 years in the wild northeast, Adrian Kuypers's business dream has survived several near-death experiences. His story is a classic, warts-and-all example of what the nation has to offer investors.

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But that venture went through some near-death experiences. Mr. Kuypers says he relied too much on the verbal assurance of local bankers and partners that the funding was in place. "We should have had financing lined up in black and white."

At one point in late 2000, "we were wondering if we were going to stay alive" because of a financing impasse. He made it known at the Team Canada mission in 2001 that he might have to announce the collapse of the Shenyang project.

Suddenly, the government of Liaoning province stepped in and unlocked some money, giving Shendor a chance to live again. Within a week, the funding was in the joint venture's bank account.

It showed Mr. Kuypers that he had to work directly with local governments, even if that meant bypassing his state-owned partners. He has made it his mission to understand the lattices of power in China and to keep powerful bureaucrats on side. But, he adds, he has never participated in bribery.

He does, however, believe in the value of guangxi, the traditional Chinese emphasis on cultivating connections. "We work at it all the time," he says, alluding to an elaborate lunch earlier that day with a senior official in the foreign affairs department of the City of Shenyang.

On two occasions, Mr. Kuypers has helped to orchestrate the replacement of the joint-venture company's top management. He has learned that managers who come from the ranks of the Chinese partners tend to favour their former companies in decision-making -- often at the expense of the foreign partners.

Again, he relied on political connections to get the top managers replaced. Following the second coup, he felt that to salvage the project he had to take up the on-site role of general manager, which keeps him in China for three of every four weeks and away from his home in Oakville, Ont.

After the first executive change, he found management was dotted with relatives of his business partner's senior managers. He relocated the beneficiaries of this nepotism back to their original companies and brought in new blood.

He told one manager to go fishing for three months on the company's payroll while he found him a position elsewhere. But now, he says, he gets along well with his major partner's leadership and has been able to pick and choose his senior team.

Mr. Kuypers has often managed business relationships with a bluntness that belies the conventional wisdom that the Chinese, above all, need to save face. "The new China is not about saving face; the old China was about saving face," he says. "The more direct you are [now], the better."

At the moment, the factory is operating at only 30-per-cent capacity, still short of the 45-per-cent at which he figures he can make money. The plant has an intermittent production schedule, producing for a week or so and then shutting down as inventory is sold.

But Mr. Kuypers has hired new production and sales managers, whom he hopes will move the product faster. He has also contracted with the Canada China Business Council to provide space for his salespeople in five of the council's Chinese offices. At this point, up to 60 per cent of output is exported.

Mr. MacDonald, who owns several Ontario companies that produce industrial machinery, has not abandoned his dream of using the Shenyang operation as a springboard for other Chinese plants. The continuing boom in Chinese construction and house building has firmed up his interest, he says.

He recently made an offer, subject to financing, to buy out the 49 per cent of the joint venture owned by Shenyang Heavy Machinery. Or the Canadian company might still sell its interest at the right price, Mr. MacDonald says.

Meanwhile, the door-panel factory, which had been the property of Shenyang Heavy Machinery, remains a monument to the potential and the problems of China.

Vegetable gardens and rental homes remain on site, relics from when state enterprises looked after workers' cradle-to-grave needs.

Mr. Kuypers shudders at the sight of broken windows in a neighbouring plant building. But he also finds things to buoy his optimism.

On an earlier visit to Shenyang, he had found sand scattered on the cement area used to store wood chips. Some of the dirt had shown up in finished door panels. Today, the storage surface is clean and he makes a mental note to praise the manager in charge.

It's a small victory but he takes a moment to savour how far he's come. "It's nearly there," he says. "I can feel it."

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