
How a Chinese businessman became the largest supplier of pyrotechnics in the US - acdanger
https://www.washingtonpost.com/graphics/2018/business/the-largest-supplier-of-american-fireworks-is-from-china/
======
Kagerjay
I have worked with many manufacturing companies in china. One of my vendors
grew from 1 container a day to over 5 right now in thr course of 3 years. I
know this because i have seen the US port data.

He is perhaps the most cutt throat person i have ever met in my life. When i
read this article about Mr Ding, he reminds me of him

One time i had a meeting with him at a covention. We talked about different
specs for products for an 40 foot container order. As we started talking,
another one of his clients who did 2xs or more business we did stopped by at
the booth.

I kid you not but he told me to go fuck off right then and there in mandarin.
There was only one extra seat and I occupied it. He had the most dead pan
serial killer eye expression i have ever seen. We were just having a nice
light casual conversation in english talking about spec clarifications one
second before.

We still did business with him because you cant argue with the quality of
goods he brought. His trade records were impeccable and spoke for themselves.

I've worked with high level execs before in the states. But I have never seen
someone stab me in the back right in front of me so fast before.

The mentality in China on the exec level is so different.

~~~
joering2
> We still did business with him because you cant argue with the quality of
> goods he brought.

True but for a sec there my mind was arguing with lack of morals on your part.
Since your whole post is somewhat American doing business with Chinese
individual, I felt disgust how low some of us (like Obama bowing to Chinese
President to almost clean the floor) will fell just to grab ONE MORE buck :(

~~~
throwaway080383
Just of out of curiosity, are you American? There are slight grammatical
errors in the post that don't seem to be that of a native English speaker's.

~~~
BenjiWiebe
I agree very much. I'm a native English speaker as well and that post sounds
very off and ungrammatical.

~~~
Kagerjay
I know its off grammatically because I didn't know how to properly explain the
facial expression he gave me. I have never seen it before. I was in shock. It
looked like he wanted to kill me. Normally you can read someone by staring
into their eyes, looking at their body language, and facial expressions.

The shift between the light conversation we had before and when he told me off
it was done so casually and efficiently. There was NO change in body language.
Only someone who is a complete psychopath or sociopath does this. Its as if he
does this often to his factory workers.

But this wasn't the case when I visited his factory though.

A few months later he stopped by our warehouse. I took him around town. He
didn't care about any of the cool things my city had to offer or its history.
All he wanted to know was insider knowledge I had about the industry as a
whole. Everything was strictly only about business only.

.....didn't realize grammatical comment was not at me but I expanded on it
anyhow

~~~
sizzle
I wish we could stick him in an fMRI machine and have his brain scanned at
that very moment to see what areas of the brain lit up. More psychopath than
sociopath?

------
kevin_b_er
What I'm reading is a monopolist is immune from scrutiny because everyone is
afraid of the monopolist bankrupting them by cutting them out of supply from
the monopoly. Further through a network of shell corporations, we learn the
truth of the monopoly is obfuscated.

What's good about this?

~~~
anonymous5133
It is a good example of game theory and how to use it to your advantage.
Excellent

~~~
Exuma
Can you expand on what you mean exactly?

~~~
sudouser
not op, but as in: prisoners dilemma, if they speak against, they will suffer
a penalty

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baybal2
>On Feb. 14, 2008, in Foshan, a city in southern China, 15,000 cartons of
fireworks spread across 20 warehouses mysteriously exploded in the middle of
the night, creating a tremendous blast that damaged windows and doors a half-
mile away. Surprisingly, no one was seriously hurt.

>Before the explosion, companies could ship fireworks out of numerous ports,
fireworks industry executives said. But after the explosion, Chinese
authorities quickly cracked down, requiring almost all of the pyrotechnics to
be moved out of Shanghai. And, perhaps most significant, to ship fireworks,
companies now needed to obtain special permits, the executives said.

>Only three were initially given out by Shanghai’s Maritime Safety
Administration to transfer fireworks onto container ships there, several
fireworks and shipping executives said. Of those three, Ding was the only
recipient who could move his vessels through the Shanghai port for export to
the United States, according to Liu Jihua, owner of Hunan Hongguang Logistics,
a Liuyang company that specializes in shipping to Southeast Asia.

Stuff like this is all over China, and they were even more extreme during the
time of mandatory export licensing and "export tariffs"

~~~
nyolfen
> On Feb. 14, 2008, in Foshan, a city in southern China, 15,000 cartons of
> fireworks spread across 20 warehouses mysteriously exploded in the middle of
> the night, creating a tremendous blast that damaged windows and doors a
> half-mile away. Surprisingly, no one was seriously hurt.

i find this extraordinarily unlikely. i'm reminded of intelsat 708.

------
arthurofbabylon
This could be a story about Google and Facebook rigging the digital
advertising industry, and everyone would say, “great business tactics, it’s
not a monopoly for XYZ reasons. It enables free service for users.” etc etc.

As a story about a Chinese businessman, this starts to get the scrutiny it
deserves. I’d love to see journalists shed some light on monopolistic
behaviors in the US. Frankly, we’d all benefit from the review.

~~~
robert_foss
Everyone is a bit of a straw man.

Personally I think Google should be scrutinized.

------
protomyth
On a side note, if you are ever near the national convention for The
Pyrotechnics Guild International, Inc.[1] and like fireworks, then it is an
event that does a pretty impressive show to demonstrate their wares during
their convention.

1) [http://www.pgi.org/convention/](http://www.pgi.org/convention/)

------
rdiddly
The author and somebody he quotes are both awfully hung up on how "insiders
call him Mr. Ding." Since that's his name, that is not remarkable whatsoever.
In China the family name comes first, from Lee Jun-Fan (Bruce Lee / Mr. Lee)
right on down to Chan Kong-Sang (Jackie Chan / Mr. Chan).

Imagine: _" Mr. Smith -- that's what those of us in the know tend to have this
wacky idiosyncratic habit of calling him -- controls all the mayonnaise
distribution on the West Coast."_

~~~
alaskamiller
Not really. They call him Mister (先生) as an honorific. In chinese culture,
that's what you call the big boss.

~~~
echaozh
Hmm, I don't think Mainland Chinese call other people with Mr as honorific. We
are more used to use titles or positions held by the person, like Manager,
President, or the like. If it's some stranger you met on the street, master
(师傅) is most likely used.

I've only seen people in Hong Kong movies or TV shows calling their boss Mr (生
rather than 先生). I think they actually do that in real life.

------
forkLding
The immense power of vertical integration at its finest

~~~
simonh
The immense power of being the only one to have the required license in a
corrupt and bureaucratic system.

This sort of situation also has a tendency to perpetuate itself over there.
The guy with the license can make monopolistic profits, which means he has
greater financial resources to influence the licensing authority, which means
unfortunately his rivals seem to have unexpected problems getting licenses of
their own.

------
hideo
I think I don't understand this article. The container share graphic shows
that Huayang market share is 2/3rds of traffic, but the numbers in all the
rest of indicate that Huayang is a monopoly. 2/3rd is a lot but doesn't seem
monopolistic to me.

It's also interesting that the article goes in depth with detail (because of
data availability perhaps?) from the US side of the trade, but very light on
detail (and full of implications) about stuff going on in the China side.

~~~
ciscoriordan
The first line of the article is: "Roughly 70 percent of all Chinese fireworks
entering the United States come here under the control of a Chinese
businessman who has used his influence to raise prices and block competitors,
leaving many U.S. executives fearful of losing access to their most important
Fourth of July inventories."

The word "monopoly" doesn't appear anywhere in the article. The article's
claim is that Mr. Ding is anticompetitive, not that he operates a monopoly.

------
Exuma
Why can't other companies start, which produce fireworks?

~~~
drenvuk
His price will most likely just come under what it would cost to produce
somewhere else. Anyone else in China has to deal with laws and regulations. If
the news article is correct he's essentially fixed the rules so that he has
the best position out of anyone who could otherwise compete.

\- He has a permit

\- He has economies of scale

\- He owns the logistics and shipping

\- He is the defacto controller of the port considering how scared people are
of him

\- He's cutting his costs of operation to a minimum by moving everything under
his control since there are no middlemen siphoning of money for their own
profit.

The nature of other markets like the US means the cost of production is
prohibitive in most cases. This is literally the playbook on doing business
from time immemorial.

Check out the billonaire cheese guy for more examples of good positioning and
secretive ceos.
[https://www.forbes.com/sites/chloesorvino/2017/05/23/james-l...](https://www.forbes.com/sites/chloesorvino/2017/05/23/james-
leprino-exclusive-mozzarella-billionaire-cheese-pizza-hut-dominos-papa-
johns/#ad2aca84958c)

------
fusiongyro
Does this explain why every vendor seems to have exactly the same stuff? I
feel like when I was a kid, there was a lot more variety, and going to
different stands you'd see different stuff. In my town of ~8000, there are
going to be four or five firework stands, all with exactly the same stuff for
exactly the same prices.

------
drenvuk
A question that is somewhat on topic: does anyone have any articles or books
on the vertical integration of some car manufacturers in the past where they
had raw iron ore come in one side and cars roll out the other? I would be
interested in other industries as well.

~~~
WalterBright
I doubt that would work very well, considering the law of comparative
advantage.

~~~
drenvuk
I believe that's when there aren't too many middlemen in the way or too many
people driving up the cost of your materials when you can source them better
at a different stage in the processing route. Logistics companies are
middlemen. Vendors are middlemen.

Space X for example has a high degree of vertical integration, maybe not to
the point of smelting their own raw materials but much higher than ULA. In the
past it may have made sense given the environment.

------
vadym909
I'm surprised this is a surprise to anyone that does business with Asian,
African or South American companies. Anyplace that has high levels of
corruption has businesses and Govt hand-in-hand. Isn't this the whole point of
accumulating Govt power. If there was no way to extract value from it, no one
would care about running for office.

------
dawhizkid
In 5 years we'll all be watching drone light shows anyway

~~~
casefields
Nah. The 2020 Olympics in Tokyo are slated to have a man-made meteor shower:
[https://qz.com/689794/a-man-made-meteor-shower-launched-
by-s...](https://qz.com/689794/a-man-made-meteor-shower-launched-by-satellite-
could-open-the-2020-olympic-games-in-tokyo/)

