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King of carving

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FROM the 11th-floor suite of his company headquarters, Zhang Guoxi looks to the horizon of one of China's poorest provinces and takes a sip of tea in a toast to Lee Iacocca. ``In the future I will face a lot of political and financial difficulties, but if I bravely face these challenges then I will be a real man - like Iacocca,'' said Mr. Zhang. By his own measure, however, Zhang has already proved his manhood several times over.

Building what some officials say is the largest private business fortune in China, he has overcome adversities that could unnerve some of capitalism's most idolized industrialists.

The rags-to-riches climb of Zhang Guoxi is more than a tribute to perseverance and business acumen. His story epitomizes the grim ordeal and sudden revival of Chinese capitalists. And it shows how China's Communist Party, seeking swift economic growth in a decade of reform, has created class conflict by nurturing capitalists in its ranks.

Zhang began amassing his wealth - estimated at more than $20 million by some officials - during the Cultural Revolution, the dark days for Chinese capitalists and other ``counterrevolutionaries.'' He sold his house in 1973 for $380, built a workshop, and recruited a woodcarver to train 21 fellow workers in a defunct garage.

After persuading a state trading company in Shanghai to export his hand-carved chests, Zhang enjoyed a sudden surge of profits that prompted radical zealots to label him ``a newborn capitalist thing.''

A team of fanatical Maoists dogged him throughout the remaining three years of the chaotic period, criticizing his work and obstructing any plans that did not jibe with their iconoclasm. They often disrupted his supply of raw materials and electricity.

When the Communist Party decided in 1978 to exploit rather than continue destroying capitalists, Zhang's workshop gained its first official token of political legitimacy.

In the ensuing decade, economic reform has unleashed go-getters like Zhang and allowed supply and demand instead of government dictates to shape much of the economy. As a result, China has been buoyed to unprecedented prosperity, and Chinese entrepreneurs have enjoyed a heyday unseen in more than four decades.


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