"Before, the farmers here lived in huts. Conditions were terrible. If the rains came just a little late, people couldn't get enough to eat," recalls Kaen Phootsree, a former official of the Thai government's tobacco monopoly and now a branch manager of the Adams-Chung joint venture. "Now they have houses, refrigerators, and even hand-made pickup trucks. People are very appreciative of the Chungs."
In the dark days after the collapse of his father's Japanese enterprise, Wing Chung lived with his grandparents in a tiny apartment in Hong Kong, sharing a bed with two of his brothers. The family lived off the proceeds of his grandfather's retirement kitty and what money K.S. was able to send back from Bangkok. But by 1958, the family's finances had sufficiently improved to send Wing to the University of California at Berkeley, where he received a degree in mathematical statistics. He went on to earn a master's degree from Columbia University and an IBM Watson Fellowship.
With his impressive credentials, Wing at first saw better opportunities for himself outside his father's modest business. He joined up with Hoffmanne LaRoche Inc., the giant pharmaceutical company, married a Chinese woman from an upper-class Beijing family, and settled down to a comfortable lifestyle in suburban New Jersey.
In 1972, however, after years of prodding from K.S., Wing finally agreed to join the family enterprise and help it chart a new course. For to Wing, as to his father, the success of the Thailand tobacco operation suggested that the family need no longer serve as traders and middlemen living off thin margins. The Chungs had now seen the profits that come from adding value through management, technical assistance, and manufacturing.
The switch of emphasis away from trading was also one required by a world economy that was becoming increasingly internationalized. "All our old customers were getting more sophisticated, and soon they would not need us anymore," Wing explained over lunch at a Los Angeles restaurant. "The second- or third-generation manufacturer or merchant in Hong Kong speaks English and has his own contacts overseas. So they are learning to do without middlemen like us. To survive, we have to become more sophisticated in what we do. We must start creating value."
The seed of this new approach was planted in the tobacco fields of northeast Thailand. The basic task of managing the Thailand operation had produced an enormous need for accurate record keeping, but conventional computer systems did not perform well in the rough, rural environment of the Third World. What they needed was a system that was rugged and could be used by several people at the same time.
A solution suggested itself in 1978 when Wing ran into Kwok M. Ong, an old school chum from Berkeley. Along with two fellow engineers at the Jet Propulsion Laboratory, in Pasadena, Calif., Kwok had been working on a new microcomputer that could serve several users at once. Now he and his colleagues agreed to go out on their own and, with a $50,000 investment from the Chungs, formed a joint venture called Action Computer Enterprise Inc. By February of the following year, the first California-made computers had been shipped to tobacco operations headquarters in Banphai, a small village 400 kilometers from Bangkok.
While Kwok Ong and company chairman Herbert Siegel perfected the multi-user technology, Wing Chung turned to marketing Action's Discovery line of computers throughout Asia. Using contacts developed by the family's traditional trading business, he scored success upon success in Asian markets that had often been impenetrable for small U.S. companies: markets such as Hong Kong, Thailand, and -- most notably -- China. By 1984, tiny Action, operating from Hong Kong with 25 sales and service employees, had become a leading U.S. computer manufacturer on the mainland, with Chinese customers accounting for nearly one-third of the company's $5 million in annual revenues.
More recently, relations have soured between the Chungs and Action executives in Pasadena. To the family, who owned roughly a third of the company, it seemed slow in adapting to the new conventions of the fast-changing computer industry. To the Action execs, coordinating operations with the far-flung Chungs was providing frustrating.
"When you're trying to make a major strategic decision, it's hard to synchronize with them," explains chairman Siegel. "You can't just say, Let's have a board of directors' meeting, when everyone's all over the place. In fact, it's impossible to tell even how they make decisions. I don't think there's any method at all. The guy you're supposed to be dealing with on computers could be off selling tobacco or watches."
One decision the Chungs did take, however, was to shift their energies from Action and launch their own computer firm, Universal Digital Computer Inc. (UDC).
Dressed in a freshly pressed blue suit and white shirt, Victor Chung, 31 is the model of the young Chinese capitalist. Armed with a degree from Berkeley and a thorough knowledge of the latest developments in the computer field, he carries himself with the quiet self-assurance of someone born to money and power. And as the number-one son of the number-one son of K. S. Chung, Victor is his grandfather's favorite offspring and a future leader of the family's business empire.
Actually, only a decade ago, Victor Chung was anything but the worldly capitalist. Along with nearly 40 other Chung relatives, he was part of the family that had chosen to stay in China after the Communist revolution. Until his departure, he had had precious little exposure to business, computers, or even his relatives overseas.
Like many Chinese families, the Chungs were bitterly divided by the 1949 revolution. As Mao's forces closed in on the retreating Nationalist forces, the fervently anticommunist K.S. wanted all of his 13 children to join him in the relative safety of Hong Kong. But many of his offspring, including his eldest son, Charlie, and his daughter, Po Woon, stayed behind.
