Midnight deal that spelt disaster for city's Chinatown: A property firm's collapse has hit a Liverpool community. Jonathan Foster reports

LIVERPOOL'S Chinatown has witnessed many frantic late-night transactions, but one such deal now threatens the very existence of the dwindling community.

Desperate to balance its budget for 1987-88, Liverpool City Council completed a pounds 10m sale of property within minutes of the deadline expiring. Bold Street and Duke Street, a commercial quarter fading into the dying heart of Europe's oldest Chinese neighbourhood, was to be transformed into a bustling cultural centre by its new landlord, the property company Charterhouse.

Last month, Charterhouse collapsed into receivership. No substantial redevelopment has begun, although rents were increased by the new landlord by up to 600 per cent.

The council is still owed pounds 2.75m, and its chances of seeing the money were diminished by the revelation this week that Charterhouse's biggest creditor, the water industry pension fund, is ahead of the council in the queue, owed pounds 20m.

The deal was 'dubious from the start', Paul Clark, deputy leader of the Liberal Democrat opposition, said. Signed 30 minutes before midnight at the end of the financial year, it handed 390 properties 'on a plate' to a company that had not been properly investigated, Mr Clark claimed.

'We want an inquiry staffed by outsiders - our own officers are hopelessly compromised.' The area had now been blighted, Mr Clark said. 'It makes a nonsense of policies to rejuvenate Chinatown.'

Labour, supported by breakaway left-wing councillors, defeated the opposition call for an independent investigation of the Charterhouse deal, but Labour is aware that another part of the city's fabric is fraying under historical pressures that shoestring council budgets cannot relieve.

Liverpool Chinatown, bounded by Duke Street, Great George Street and the waterfront, was once Europe's biggest as well as oldest Chinese community. The Pagoda community centre remains the focus of a still-thriving Sino-Scouse culture, and Polly Green, in charge of its busy advice bureau and social calendar, believes the area could be vital again with new housing for dispersed Chinese people and new enterprises rediscovering trade links with the East.

The council shared her view. Andrew Green, a planner, prepared a candid report, sanguine in its assessment of what the area could achieve if tourism and commerce were encouraged.

But the report acknowledged protracted neglect of Chinatown. Many of its former residents have moved to flourishing Chinese communities in Manchester and London. There are still restaurants in Nelson Street, but most of the area has been abandoned. At night, car alarms sound, backstreets are deserted and the old waiters talk of decline. Chinatown, like much of Liverpool, is still reluctantly in the grip of an imperial past.

The first Chinese came in the early 19th century. The community's original links were with the port and seamen of Guangzhou, formerly Canton, which sent tea, silk and matting to Liverpool, as well as cheap labour.

Chinese sailors, most employed as cooks or stokers, worked for one fifth of British wages. Only once did they strike, in 1940, protesting successfully against the refusal of parity in death compensation payments.

The two greatest influxes of Chinese seafarers to Liverpool were recruited because of the huge marine traffic of two world wars. And, after both wars were over, many Liverpool Chinese were rewarded with compulsory deportation.

Ship owners liked the Chinese. They were cheap and, as archives of masters' logs reveal, sober, hardworking and obedient by comparison with 'the useless, lazy, incompetent and insubordinate crowd of wastrels' that might be hired from among Liverpool's white labour force.

Racism flourished, at first against Chinese seamen, later against the community's largest onshore employer, the laundries.

James Sexton, still a hero of the Liverpool labour movement, won St Anne's ward in 1905 on an overtly anti-Chinese (and anti- Semitic) manifesto. The trades council was more broadly xenophobic, although some delegates were anxious to campaign specifically against 'bob-tailed' people opening laundries.

Hostile racism has continued through all phases of Chinatown's history, according to Maria Lin Wong, a local historian. The resident shore community, probably never larger than the 3,500 people estimated in 1919, are 'still regarded by the host society as strangers . . . the stereotype of a community that is 'closed, self-sufficent and independent' is perpetuated'.

Those who suffered most, paradoxically, included the many British women who married Chinese sailors. Much of Liverpool was appalled by 'mongrel love affairs' and convinced that Pitt Street was the epicentre of opium dens and gambling. The only council attempt to establish social conditions in Chinatown found very little iniquity in 1906, although the community did boast its own private detective. The women lost British citizenship by marrying Chinese men. They also endured long periods when husbands were at sea. Many were disowned by their families, and their children made targets of racial abuse.

But Chinese men made good husbands. British women travelled from as far as Newcastle upon Tyne and London to meet them, according to Ms Lin Wong. One woman married to a Chinese man recalled: 'With Chinese men, you were always sure there was a meal on the table, and good clothes. In those days, all the white men did was drink, go home and give a good battering.'

Liverpool Chinatown inevitably took a battering from the decline of the port. About 12,000 Chinese people now live in the region, very few in Chinatown.

The Bank of China has gone, along with the laundries, the squatting seamen, their lottery games and the cafes selling shilling jugs of chop-suey.

The council funds the Pagoda. 'The key failure has been that of failing to focus on unlocking the economic potential of the community,' the planning report said.

That potential, brought to Liverpool by the Blue Funnel Line, may have migrated by now. Without the Bold Street and Duke Street development envisaged in a deal gone wrong, the planners fear Chinatown - excluded from the council's City Challenge programme - will remain 'left to its own devices', as Ms Lin Wong said.

In another week when Liverpool's future plans have felt a cold draught from history, the conclusion in the planning report sounded ominous. 'Institutionally, Liverpool is still not entirely comfortable with Chinatown.'

Maria Lin Wong, Chinese Liverpudlians ( pounds 3.75), Liver Press, Grove Rd, Birkenhead L42 3XS.

(Photograph omitted)