40 years of reform and opening up

Deng Xiaoping asked ‘Can he make croissants?’: how Maxim’s Hong Kong founder became China’s first airline catering service

  • Hong Kong’s largest catering group splashed out HK$5 million in 1979 despite no paper agreement with mainland partners to seal deal based only on trust and the belief China was opening up
PUBLISHED : Friday, 23 November, 2018, 7:32am
UPDATED : Friday, 23 November, 2018, 3:40pm

Annie Wu Suk-ching remembers vividly what she saw in the Jinjiang Hotel in Chengdu, capital of Sichuan Province, during an investment tour in 1978.

“The hotel workers cleaned the carpets with wet mops because they didn’t have vacuum cleaners,” she said. “I learned first-hand about China’s planned economy and realised mainlanders had to find their way out.”

She was with 11 Hong Kong businesspeople visiting Chengdu, Chongqing and Wuhan at the invitation of the Hong Kong branch of the Xinhua News Agency, which served as Beijing’s de facto embassy in Hong Kong during British rule.

Maxim’s journey from start-up to Hong Kong’s largest restaurant group

The 14-day tour ended on December 23, 1978, a day after the third plenum session of the 11th Party Central Committee ended.

Wu’s delegation was on a train from Wuhan to Guangzhou, when the loudspeaker began playing a radio address from China’s paramount leader Deng Xiaoping.

The Cantonese-speaking Hongkongers needed the Xinhua representative to translate what he was saying in Mandarin.

Deng said China was embarking on the path of reform and opening up to the outside world, and Beijing would welcome foreign investment, including from Hong Kong, Macau and Taiwan.

History was unfolding before their very eyes, and change came swiftly.

Annie Wu and her father, James Tak Wu, the founder of Maxim’s, Hong Kong’s largest catering group, would be drawn into the big new China story.

Within weeks of Deng’s speech, China and the United States normalised relations in January 1979 and were anxious to resume flights between the two countries, but there was one hitch. China’s in-flight catering industry was desperately in need of an upgrade.

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At the time, Chinese air travellers made do with no more than biscuits, boiled eggs, cold luncheon meat and washed but unpeeled fruit.

James Tak Wu was invited to Beijing to discuss forming a joint venture for in-flight catering, and in March that year he and his daughter made the 12-hour journey to the capital by train and turbo aircraft.

“There was no direct flight between Hong Kong and Beijing,” Annie Wu said.

In June, they met Lin Zheng, deputy director general of the Civil Aviation Administration of China (CAAC), and then nothing happened. Five months later, her father was invited to Beijing again, this time to meet CAAC director general Shen Tu.

“Shen told my father through an interpreter that the joint venture was a new entity in China, so no one dared to approve it,” Annie Wu said.

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Deng Xiaoping had set the deadline of May 1, 1980 for getting things done, so that the inaugural non-stop flight between the US and China could happen in early 1981.

Annie Wu recalled: “Shen asked my father, ‘Mr Wu, can you please put up HK$5 million first out of your own pocket and buy the equipment for the joint venture and get it done on time?’”

It was a unique request because at that point, there was nothing in writing.

“After 30 seconds, my father told Mr Shen, ‘We are Chinese. We trust Mr Deng Xiaoping and we believe China will open up.’ Shen shook my father’s hand and then we went back to Hong Kong to order the equipment,” Annie Wu said.

My father told Mr Shen, ‘We are Chinese. We trust Mr Deng Xiaoping and we believe China will open up.’
Annie Wu, daughter of Maxim’s founder

Her father’s partners for the joint venture, including the Bank of East China and Dairy Farm, were surprised by what had transpired and asked if they could trust their mainland partners.

“My father said he would personally guarantee everything and would raise the funds first,” she said, adding that HK$5 million was a formidable sum of money at the time.

In March 1980, she learned that Deng gave the green light for the joint venture after asking Shen what sort of business her father did in Hong Kong.

Deng had asked: “Does he know how to make croissants?” He had acquired a taste for the crescent-shaped bread rolls as a student in France in the 1920s.

Shen replied: “He knows how to do it very well.”

Deng said: “Then why not approve it?”

Beijing Air Catering, the first joint venture company on the mainland, was approved officially on April 4, 1980, with the Chinese side taking a 51 per cent stake.

When the company started operations in 1980, it prepared only a few thousand meals a day. Today it delivers more than 100,000 meals to more than 500 flights daily, serving more than 50 airlines including United Airlines, Japan Airlines, Lufthansa and Cathay Pacific.

For her part in setting up the company, Annie Wu was nicknamed “Miss 001.” Now 70, she is honorary president of Beijing Air Catering.

Times have changed in China. Young people in Hong Kong have to learn how to stay ahead of the times
Annie Wu

Her father, who opened the first Maxim’s restaurant in Central in 1956, is now the group’s honorary chairman. Maxim’s has diversified, and brought the first Starbucks to Hong Kong in 2000.

Little did Annie Wu know, that day on the train from Wuhan to Guangzhou, that China’s economic reforms would hit home so directly, or that her father’s Hong Kong business would have such an impact on China’s aviation industry.

Today she says Hongkongers need a global outlook to maintain their competitive edge.

“We have to look at new markets in Latin America, Africa and Eastern Europe. Then we can gain more information and have access to markets quicker than the rest of China. That’s the real value of Hong Kong,” she said.

“If you go to Jingjiang Hotel in Chengdu now, they have equipment we don’t have in Hong Kong. Times have changed in China. Young people in Hong Kong have to learn how to stay ahead of the times.”

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