Nation & World

Your firecrackers likely came from this Chinese man

A businessman from China is the dominant supplier for the Fourth of July

A worker fills fireworks shells with gunpowder at Changfeng Fireworks Manufacturing in Liuyang. China. (Yuyang Liu/Washington Post)
A worker fills fireworks shells with gunpowder at Changfeng Fireworks Manufacturing in Liuyang. China. (Yuyang Liu/Washington Post)
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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.

Ding Yan Zhong has managed the flow of fireworks for a decade through the two companies he founded, Shanghai Huayang and Firstrans International.

He has broadened his empire by consolidating power in China, expanding his reach and becoming the most important player in fireworks logistics on both sides of the Pacific Ocean.

Now, Ding’s control of the fireworks delivery chain is nearly complete, according to two dozen shipping and fireworks executives, more than 40,000 shipping records, numerous court documents and other sources.

From the southeastern Chinese city of Liuyang, where the majority of U.S.-bound fireworks are made, producers often load their products onto Huayang trucks. After they are stored in a Huayang warehouse, Huayang runs access to the barges they float down on the Yangtze River toward Shanghai. Once there, Huayang arranges for their shipment across the ocean.

In the United States, these containers, often stuffed with 30,000 pounds of pyrotechnics, are frequently received by Firstrans, which was founded by Ding seven years ago, completing an 11,000-mile journey connected to Ding every step of the way.

Ding’s volume and fees rose just as the spectacular fireworks he delivers do, and they are passed along to U.S. consumers, paid by everyone from hobbyists buying sparkling comets at roadside stands to municipal governments buying professional-scale shells for their annual Fourth of July celebrations, according to fireworks industry officials.

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“Everything going through Shanghai goes through Mr. Ding and Huayang,” said Julie Heckman, executive director of the American Pyrotechnics Association, a U.S. trade group for fireworks companies. “We have no choice. You want to get your products, that’s what you do. ... The industry is at the mercy of that, and nobody wants to rock the boat.”

So far this year, companies founded by Ding have arranged the transportation of 241 million pounds of fireworks, loaded onto 7,400 containers from China to the United States, according to Panjiva Inc., a firm that tracks companies involved in global trade.

Panjiva allowed The Washington Post to analyze its database of import records to assess the scope of Huayang’s market share. These records show how most U.S. importers rely on Ding’s companies to bring fireworks to the United States.

The dynamic is well-known within the industry, but executives at some U.S. firms supplied by Ding’s companies say they are extremely wary of speaking out against Ding. Multiple fireworks executives in the United States and China refer to Ding and Huayang interchangeably, saying their interactions with the company largely revolved around his decision-making. A number of executives interviewed for this story refused to speak on the record, worried they would lose access to fireworks.

Panjiva data show Ding’s companies have shipped more fireworks this year than any other, despite tensions that are pushing the United States and China closer to a full-scale trade war.

One area of dispute concerns the rules with which China requires many U.S. companies to comply to access its market. Ding has used the complexities of that relationship to build powerful businesses in both countries.

President Donald Trump wants U.S. firms to be able to compete more freely with Chinese counterparts, but the pipeline that Ding’s companies have established in both countries demonstrates how difficult it is.

Ding, through one of his most senior advisers, Hu Yulu, agreed to meet with reporters for an interview in Shanghai. But he never appeared.

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Instead, Ding’s vice general manager — Danny Zhou — said the interview was canceled after concerns raised by a “relevant authority” he would not identify.

He provided little information besides saying that Ding was from Shanghai and was born in 1969. Little else is known about Ding outside of his role in the fireworks industry, and his business partners declined to provide a photograph of him.

STARTED WITH A BANG

This fireworks story begins with an explosion.

On Feb. 14, 2008, in Foshan, a city in southern China, 15,000 cartons of fireworks spread across 20 warehouses exploded in the middle of the night, creating a tremendous blast. Surprisingly, no one was seriously hurt.

Before the explosion, companies could ship fireworks out of numerous ports, industry executives said. But after the explosion, Chinese authorities cracked down, requiring almost all of the pyrotechnics to be moved out of Shanghai. And 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 company that specializes in shipping to Southeast Asia.

At the time, Ding was a relatively unknown entrepreneur who had mostly specialized in exporting fireworks to Europe. He had a collection of warehouses in Hunan, the southern Chinese province that has made fireworks for more than 1,000 years, according to a person who has visited the facilities.

His property was basic and lacked paved roads, a dangerous omission when transporting explosives, the person noted.

But in China, permits are power. As a result, most of the producers in China and the buyers in the United States needed to funnel all their orders through Ding’s company.

Huayang eventually upgraded its warehouse and bought nine barges to transport containers along the snaking Yangtze River, connecting Hunan to Shanghai, according to a presentation Zhou gave to the American Pyrotechnics Association this year.

In 2008, Huayang transported 64,217,430 pounds of fireworks, according to Panjiva. The next year, its volume increased to 79,541,209. This year, Ding’s company has shipped triple that amount in the first five months.

The American Pyrotechnics Association estimates Americans spend more than $1 billion on fireworks each year.

Ding’s control allowed him to bump up prices sharply. The cost of shipping a container of fireworks before the explosion was about $5,000. But within several years, Ding charged between $8,000 and $15,000 to ship a container of the consumer fireworks sold at roadside tents and nearly $20,000 for the larger fireworks used at professional shows, according to officials at U.S. and Chinese companies.

If U.S. companies wanted fireworks from China, they had no choice. They had to pay Huayang.

LAUNCHING PLAN B

Ding had almost complete control of the containers leaving China. He still needed someone to collect them in the United States.

Ding already had a U.S. partner in JT Worldwide, a Chicago logistics company run by a Shanghai-born businessman, Junyuan Tsang. Ding had first partnered with Tsang before the explosion, when he was toying with the idea of establishing a U.S. operation, Tsang said. And so when Ding wanted to expand his U.S. operations, he reached out to Tsang.

For Tsang, at first, life was good. Huayang put the containers onto vessels in Shanghai, and Tsang would arrange for their collection at U.S. ports. The fireworks were then loaded onto trains and rumbled through the United States. It would take between 30 and 45 days to move a container of fireworks from Liuyang in China to Kansas City, Kan., and there was always a crush of containers arriving in April, May and June as everyone prepared for the Fourth of July, Tsang and other officials said.

“It became a big part of our operation,” Tsang said in an interview. “They grew so fast, very fast actually. So fast we cannot catch up with the pace.”

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By 2010, more than half of Tsang’s business was arranging pickup for Huayang’s containers. But Ding wanted a bigger presence, Tsang said, and he wasn’t satisfied with sharing. Ding wanted to buy Tsang out.

During a business trip to Shanghai, Tsang said he met Ding and several associates for dinner.

But when he got the offer, it was low. Tsang declined to say how much Ding offered, but he said he turned it down.

Ding had a Plan B.

He would start his own logistics company, call it Firstrans International and base it in Southern California, between the ports in Los Angeles and Long Beach, according to Tsang and California state records.

Tsang said he felt compelled to help Ding with the endeavor. He agreed to train Firstrans’s manager, at no charge.

Soon after that, Ding sent most of the containers he shipped to the United States through Firstrans, largely cutting out companies like JT Worldwide, according to Panjiva data and Tsang.

Tsang said the change has hurt his business, but he would not say by how much. In 2008, Tsang received roughly 100 percent of Ding’s U.S. imports. By 2017, his share had fallen to 12 percent, records show.

NEED FOR ‘SOLID POWER’

Chinese workers have made fireworks in Liuyang for centuries. And their products have become more Americanized in recent years to entice U.S. buyers.

In early May, a box of fireworks marked “Girls With Guns” sat stacked in a Liuyang storeroom, ready for its long journey across the Pacific.

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It was placed on trucks with boxes labeled “Bootee Call” and “Salute the King,” loaded onto Yangtze barges and then brought to Shanghai.

“For this industry, you have to have solid power,” Zhang said. “Huayang is from Shanghai. It has connections.”

Companies without those connections have had little success doing business in Shanghai.

B.J. Alan, an Ohio company, struck a deal with APL, a major shipping liner, to transport fireworks out of Shanghai, according to two people briefed on the episode who spoke on the condition of anonymity for fear of crossing Huayang. B.J. Alan officials declined to comment.

B.J. Alan officials were surprised, though, when the contract was quickly canceled by APL, with little explanation given, the two people briefed on the event said.

That meant B.J. Alan would still have to rely on Huayang to move hundreds of containers of fireworks each year to the United States.

Ding’s admirers say he’s a shrewd entrepreneur who successfully navigated complicated markets and regulations on both sides of the Pacific — making the industry better in the process.

Michael Huang, general secretary of the local trade group in Liuyang, the International Fireworks Association, conceded during an interview that more shipping and logistics competition in Shanghai could reduce costs, but worried that it could also lead to corner-cutting and accidents.

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