News Corporation's ambitions have been thwarted in China by fearful officials and canny businessmen. But Rupert Murdoch has not quite given up

FAR earlier than many, Rupert Murdoch sensed that China might be a unique financial prize. Even on his first visit in the mid-1980s, with his then wife, Anna, and their school-age children, the Australian news magnate dined with the leadership.

For much of the next 20 years, Mr Murdoch tried to conquer China. His initial aim was to create a satellite television network that would absorb a share of the advertising, now estimated at about $50 billion a year, that was sold on state-owned news media. The Chinese encouraged him and then pulled back. Ultimately they outmanoeuvred him, beating him at his own game. Mr Murdoch hoped that the more he invested, the sooner satellite dishes would be sprouting from every Chinese rooftop. But satellite dishes are still regulated, even if not as strictly as they once were.

Bruce Dover, an Australian, was Mr Murdoch's man in Beijing until 1998. He has written a rare insider's account of how the Chinese got the better of a businessman who usually gets what he wants. Mr Murdoch felt that if only he could meet President Jiang Zemin all would be fine, Mr Dover writes. Eventually, Mr Murdoch did get to spend time with the president; quite a bit of it, in fact. They got on well. Mr Murdoch treated the Chinese leader, a film fan, to an exclusive screening of “Titanic”, which had been made by Mr Murdoch's 20th Century Fox.

The Chinese let him invest lavishly in internet and programming companies, thus giving them precious technical know-how. They particularly admired Mr Murdoch's management structure because it was like theirs: a Sun King at the centre with acolytes all around. The Chinese were excellent businessmen, but they wanted China's profits for China. Even with investments in groundbreaking television production in China, Mr Murdoch could not win for himself the concessions that usually came with publishing favourable editorials for presidents and prime ministers in the West. The Murdoch charm had beguiled the highest levels of government in Australia, America and Britain. In China, it failed.

Mr Murdoch did make some gains. In 2002 his Star TV was given permission to sell programming for cable systems in Guangdong province. But when the company tried to expand its distribution by the back door, using the remote Qinghai province as a base and exploiting a regulatory loophole to circumvent a ban on domestic cable-television owners carrying foreign broadcasters, the government reacted swiftly. The Chinese propaganda department forced Star TV to close down the operation. The Qinghai fiasco, News Corporation staff estimate, cost Star TV $30m-60m. Then in 2003 Mr Jiang was replaced by the less amenable Hu Jintao. Two years later a frustrated Mr Murdoch announced he had hit a “brick wall” in China.

While courting the Chinese leadership, Mr Murdoch met Wendi Deng, a talented executive with an MBA from Yale University. Ms Deng was born in mainland China and worked in the business development department at Star TV in Hong Kong. Mr Dover introduced them at a company cocktail party. They married in 1999 and Ms Deng became Mr Murdoch's new connection to China, though she possessed little understanding of the opaque politics of her birthplace. Ms Deng is now in charge of MySpace.com in China. Like all dotcom operations there, it is a ward of the Chinese censors. But it remains one of the most promising of News Corporation's now limited Chinese operations.

Mr Murdoch has cooled on China. In recent months he has found a new passion, retooling the Wall Street Journal.

Few News Corporation executives have written about their boss. Mr Dover does so evenly, without venom, and with a quizzical tone that suggests Mr Murdoch was a little naive about the Chinese. He tells the reader about Mr Murdoch's perpetual motion, his mania for phoning his executives at all hours, and how he keeps tabs on his $70 billion business by always travelling with a blue folder containing weekly print-outs of the financial status of his companies from New York to Cairns.

No one has staked so much personal prestige on the quest for China, Mr Dover says. Foreign companies have yet to be allowed into the 380m Chinese homes that have televisions. Now nearly 77, Mr Murdoch is beginning to recognise that this may not happen on his watch.