Xu claims he set some conditions with Hanghua, such as guaranteeing the quality of the equipment, setting prices below market levels, charging no commission to the hospitals, and the screening data not belonging to Hanghua.

    Xu also says that the normal price for breast screening in hospitals is around RMB 400, but those hospitals designated for the project offered a preferential price of RMB 200. Even so, for many Chinese women RMB 200 is not affordable.

    As cooperation with Hanghua began, company staff rented an office in the same building as CACA, and started to work in the name of “Breast Cancer Screening for One Million Women.”

    Although Xu was the project director, in reality all the work was managed by Hanghua staff. Chang Guisheng, who is the director of CACA’s “Breast Cancer Screening for One Million Women” project office, says that company staff handled and controlled everything, from the office seal to daily operations.

Problematic Cooperation

    Hanghua’s involvement soon created a lot of problems. Most of the equipment the company sold to designated hospitals was purchased from overseas medical imaging companies. Of these Agfa, Planmed and some others claimed Hanghua defaulted on their payments. In November 2007, Agfa’s credit management consultant Wang Guijuan sent a letter to the Ministry of Health complaining that Hanghua were over two years in arrears on their payments. Even more shocking is the fact that a mobile screening vehicle Agfa donated in June 2005 to the project is now “missing.”

    The vehicle was worth over RMB 1 million. Belgian King Albert II specially attended the donation ceremony while visiting China. However, Chang Guisheng, who has worked on the screening project since June 2006, claims CACA never received the vehicle.

    In addition, Chang says that one of the designated hospitals hasn’t received receipts for payments made on the equipment purchased from Hanghua.

    Similar disputes deepened the conflict between CACA and Hanghua. These disputes also resulted in dissatisfaction from leaders in the Ministry of Health. In September 2006, CACA terminated its cooperation with Hanghua.

Disputes Continue

    As there has never been a third-party audit, CACA is not clear about the project’s income or spending. Hanghua project representative Wang Husen claims the company didn’t earn any profit, and in fact lost a lot of money. As for the money earned from equipment sales, he says: “It was all used on project operations.” He also complains that at the beginning Hang-hua expected its investment in developing remote medical consultation software, and other aspects of the project, would bring profits. But the termination of cooperation made it impossible to recoup any investment.