Bronze Heads

It sounds like a joke.  An Italian guy and a French priest find themselves in the decadent court of China's last dynasty in 1750.  In an attempt to curry favor and lacking anything else to do, they design a fountain adorned with 12 bronze heads for the Old Summer Palace in Beijing that spouts water every hour.  The fountain falls into disrepair until an empress decides that its ugly and has the whole thing ripped out and placed in storage.  Upward-spouting water violates several aspects of Confucian thought, after all.  But somewhere between 1840 and 1860, the heads disappear.

This is where the joke falters.  In 1860, French and British soldiers loot and burn down the Old Summer Palace as part of the Second Opium War.  It's a truly horrible event and part of a long list of grevious offenses carried out by imperialists against the Chinese.  That said, though, some Han Chinese helped to loot the Palace storehouses out of disgust with their decadent Manchu rulers.  And given the 20 year gap between 1840 and 1860, there's a chance that the heads disappeared before the French and British troops came through, perhaps with the help of the eunuchs that used to run the courts.  Either way, though, the heads dissappear until the late 20th century when they start to pop up in auctions.  Two of the heads, a rabbit and a rat, are designated part of the estate of designer Yves Saint Laurent when Christie's puts his possessions up for auction.

Though the heads were designed by two foreigners, some Chinese folks go ballistic about the YSL auction.  Others call the heads crap and don't care.  The Chinese government even weighs in and demands the return of the heads after a French court refuses to halt the sale.  PRC officials claim that the auction, "would seriously harm the cultural rights and national feeling of the Chinese people."  Christie's proceeds with the auction anyway, and someone buys the heads for $40 million.  Except he didn't--Cao Mingchao submitted a false bid and refuses to pay.

As Danwei notes, there's a number of lessons to be learned about doing business in China from the Cao Mingchao incident.  First, just as in copyright law, if the PRC government doesn't allow the import of a foreign good, remedies against Chinese parties are very limited.  (The Chinese government did not license the import of the heads as antiquities, so Christie's has no remedy against Cao on the Mainland.)  Second, just as in WaHaHa, if a Chinese party plays the nationalism card, rule of law (and your contract and trademark) may go by the wayside.  Third, rule of law in China still still has a ways to go.  And fourth, never forget that Chinese officials can go rogue--Cao is an advisor to the National Treasures fund, but the Chinese government now denies any agency relationship.

Of course, Christie's did not do business with China--they allowed a Chinese nationalist to participate in one of their auctions.  And one would hope that they took out some insurance to deal with this eventuality. But given the morning denial from the Chinese government with respect to Cao's authority, you can bet that someone in France is trying to figure out if the Chinese government is somehow liable under an agency theory and the commercial activities exception to sovereign immunity.