Saturday, October 27, 2007

Agri-tourism

The hotel in Beijing had brochures titled "Modern Agriculture Tour" published by the Beijing Tourism Administration.

From the brochure: "Agriculture tour is an important branch of the modern tourism products of today. The agriculture tour develops rapidly in China in recent years....You can cast away the chaos of urban cities completely and search the paradise of heart in the rural gardens." (Chinese translations into English are often fun to read.)

The brochure described 11 agri-tourism sites near Beijing. The examples listed highlighted both "ecological" farming and gardening and high-tech farming and gardening. Also featured were pick-your-own fruit, hot springs and folk culture.

The brochure was in English, but I would expect that other brochures targeted the local population. We heard several times that the Chinese are using their increasing wealth not just to consume more products, but also to travel more, both domestically and internationally.

Leaving China 10/20

Our leader said it was time to go home.

We left Beijing for home on Saturday, Oct. 20. The airport was not as busy as when we arrived on Oct. 17. We were processed efficiently; lines were shorter than is often the case at home. As this photo shows, the Beijing airport was much like any other large, modern airport:

Following is the United Airlines 747 that took us to Chicago. Note the Iran Air 747 in the background; one doesn't see that at home.

We did not fly over the North Pole this time, but rather flew over the Siberian Peninsula and Alaska. We were hardly over water at all, except for the Sea of Okhotsk.

Shopping in Beijing

We managed to do some shopping during our stay in Beijing, Oct. 17-20. Silk Street was a short taxi ride from the hotel. This is a wonderful tourist trap, where one can buy jewelry, clothes, luggage, electronics, Chinese gifts, and much else. There are over 1,700 merchants. The clerks can be aggressive, but all in good fun. Prices are determined by haggling, in English if desired, or by passing a calculator back and forth with the latest bid/offer displayed. It was usually more crowded than is shown in this photo:

There were several small, upscale malls within walking distance of the hotel. We had dinner in a Korean restaurant in the mall shown below. This mall seemed to be like any Western mall, selling mostly clothes and jewelry. Unlike Silk Street, it did not appear to be targeted at foreigners.

Other places that people went (alas, no pictures) included a huge weekly flea market and a Wu Mart store (groceries, household goods) across the street from the hotel.

Sightseeing 10/19

Our last full day in China was Friday, October 19. We spent the day sightseeing.

Our first stop was the Great Wall at Badaling, one of several sections of the Great Wall open to tourists near Beijing. The Great Wall was first built 500-200 BC, and rebuilt and changed many times since then. The sections that are visited by tourists today were built in the Ming Dynasty (1368-1644 AD), and have been carefully restored in the last 50 years.

Beijing is situated on a plain surrounded by mountains on three sides. The Great Wall extends throughout the mountains to protect the city from invasion. In the photo below, note how the wall follows the mountains up and down, with watchtowers at the summits. This photo was taken mid-morning, before it became crowded.

Back in Beijing, we visited the Temple of Heaven. This temple complex was also originally built during the Ming Dynasty. It has been rebuilt several times. The Temple of Heaven was used by the emperor, accompanied by several thousand assistants, to pray for good harvests. The Hall of Prayer for Good Harvests, shown in the photo below, is the most striking of the many buildings in the temple complex.

Our last stop was Tiananmen Square, also first built in the Ming Dynasty. Tiananmen Square reminded me of the National Mall in Washington, DC. Tiananmen Square is smaller, and is paved with stone, but there are many similarities. Both are large open spaces in the center of the national government where people congregate, surrounded by national monuments and museums. Both places have been used for protests and rallies. In the West, Tiananmen Square is mostly known for the Massacre of 1989.

To the north of Tiananmen Square is the Tiananmen gate-tower (Gate of Heavenly Peace), beyond which is the Forbidden City--which we did not have time to visit. On the east is the National Museum of China. On the south is the Zhengyangmen gate-tower, the tallest of the many gate-towers in Beijing. On the west is the Great Hall of the People. Inside the square are the Monument to the People's Heroes and the Chairman Mao Memorial Hall.

The square was decorated with elaborate floral displays of Chinese landmarks and the upcoming 2008 Olympics. The photo below shows one of these displays (note the Olympic flame) with the National Museum of China in the background.

The 17th National Congress of the Communist Party of China was being held in the Great Hall of the People while we were there, but we did not see any evidence of it other than a huge sign and a significant police and military presence.

The photo below shows the Great Hall of the People and the Monument to the People's Heroes.

The weather was beautiful for our sightseeing day. There was a brisk wind which blew all of the pollution out of Beijing. We were told that this was most unusual.

Sunday, October 21, 2007

Thank You

My deepest gratitude to Secretary Roger Allbee for inviting me on this ag trade mission, to Chris Barbieri for a wonderful job organizing this trip, to my fellow delegates for their company and insightful discussion on our journey together, and to our Chinese hosts for their warm hospitality. It was a most interesting and enjoyable adventure. I hope it leads to closer relations between Vermont and China.

Also many thanks to the directors and owners of Yankee Farm Credit for this opportunity to go to China, and to Bill Heath and the employees of Yankee Farm Credit for continuing to serve our customers' needs in my absence.

Back Home

I am now back home in Vermont. I have a few more posts about China in mind, as time permits, but I am no longer blogging the experience "live." I am now relying on notes, photos and memory.

Fall is a beautiful season in Vermont. This is my backyard today.

Thursday, October 18, 2007

Happy Birthday, Laura!

See you when I get home.

Love, Dad

Beijing American Club

Our meeting with Tate Miller and Jeff Bi from AmCham-China was in the Nixon Room of the Beijing American Club in the China Resources Building, a nice facility.

Out one window was a view of a 25-story building going up right across the street (we were on the 28th floor). The weather was nice today.


Here was the view out another window. The two inclined towers will be joined at the top by a tube.

I would provide a hot link to the Beijing American Club's web site in the first paragraph of this post, except for one thing. When I googled "Beijing American Club," Google provided the link but with this notation: "This site may harm your computer." This is the first time I have seen this warning on Google. With another click, Google provides this explanation: "This warning message appears with search results we've identified as sites that may install malicious software on your computer." I have read that this is a problem with Chinese web sites.

AmCham-China

Our second meeting today was with representatives of the American Chamber of Commerce in the Peoples Republic of China (AmCham-China). Representing AmCham-China (as members of the Chamber) were Tate Miller, Chief Representative, Beijing Office of the American Forest & Paper Association and Jeff Bi, General Manager of Shandong Tralin Packaging Co., Ltd Beijing.

Messrs. Miller and Bi did not have a formal presentation, but we had a wide ranging discussion over lunch that provided context for the things we have seen and learned in China, from the perspective of people trying to do business in China.

Takeaways:

1. There is great opportunity in China, but also great risk. The Danone-Bright Dairy breakup is but one of many failed joint ventures. Many foreign joint venture partners have simply walked away from their investment.

2. Deals are done business to business, but everything happens within the context of the government's central planning. If the central government makes something a priority, they have tremendous resources available. Policy can change overnight. Example: In coated paper, China went from nothing to the world leader in 8 years, because the central government made it a priority.

3. The overriding concern of the central government is social stability, especially among the lower classes.

4. Provincial and county governments are also important, and may be easier to work with.

5. The central government is providing huge amounts of cheap capital to various sectors of the economy that it wishes to promote. (For example, we were told earlier that the Liu family described in this post has benefited from such financing because the government is promoting the dairy industry.) Private investment companies from the West are also providing huge amounts of capital with lax oversight. No one wants to miss out on the boom. The result is reminiscent of the dot com boom in the U.S. As one small example, we were told of $60M of private venture capital being offered without so much as a business plan. (Another example--many of the buildings in my photos are empty.)

6. Chinese consumers are increasingly interested in high-end quality products, because their income is increasing. There are opportunities for niche or unique products. Maple syrup may be an example (it can't be made in China).

7. The wood products industry is one of the industries that China has made a priority. They already import almost no finished products, and may soon import few logs. China has planted more trees in the past 15 years than any other country in the world. Huge Russian forests are also available nearby. There may still be opportunities in hardwoods.

8. The Olympics will have a huge impact on China. In addition to the effects described in the previous post, all of the foreigners coming to China will leave behind bits of their culture after 2008.

Tate Miller described something affecting China's attitudes toward the timber industry that none of us in the delegation had ever heard of--the 1987 Black Dragon forest fire in Manchuria, perhaps the greatest fire in history. I find it amazing that this fire is so little known in the West. I cannot even find a mention of it on Wikipedia, but there was a book written about it. It is now out of print, but used copies are available on Amazon. There is so much to learn.

This was the last meeting of our trade mission. One more post about the place where we met with Messrs. Miller and Bi, and then time to be a tourist! Posting may be light.

U.S. Dairy Export Council

We had two meetings today. The first was with Daniel Chan, Chief Representative of the U.S. Dairy Export Council. Mr. Chan is based in Shanghai, but was out of the country when we were in Shanghai. He made a special trip to Beijing to meet with us. Three takeaways:

1. It is an official Chinese goal to become self-sufficient in dairy, but the DEC's research shows that China will remain a net importer of dairy products for at least five years.

2. Per capita income, dairy consumption, and cheese consumption in particular--while all low by Western standards--are increasing in China. Mr. Chan reinforced a point we had heard earlier, that all of those measures increased significantly in Japan and Korea after they hosted the Olympics in 1964 and 1988, respectively. After next year's Olympics in Beijing, all of those measures in China are likely to increase even more rapidly than before.

3. The real reason for the breakup between Danone and Bright Dairy is that the Chinese were making knock-off Danone products in violation of their joint venture agreement. It is not clear that Danone has any practical recourse.

Mr. Chan was also helpful in explaining aspects of Chinese culture. Being originally from British Hong Kong, he had a good understanding of differences between Chinese and Western perspectives. Three examples:

1. The Chinese have a different concept of time. They have a 5000 year history of civilization, as compared to just over 200 for the United States. Things do not always move fast in China. When it is to the advantage of the Chinese to stall, they can be very patient.

2. Physical exercise has not historically been a big part of Chinese culture. (Indeed, I have seen few joggers.) Their diet reflects this. The Olympics may gradually affect the attitude toward exercise.

3. The Chinese are interested in the wellness aspects of their food. Additives with supposed health benefits are popular. (U.S. standards of truth-in-advertising don't apply.) This may be because medical care is scarce, hence prevention is important.

Wednesday, October 17, 2007

Wikipedia

I had read that China had blocked access to Wikipedia, and that seems to be the case. Many of my posts have links to Wikipedia for background info. I can post to this blog two ways--either through VPN or not. I prefer to use VPN (virtual private network), because then the Blogger.com screens come up in English. If I don't use VPN, they come up in Chinese. I would use VPN all the time, except that I get dropped a lot. (It's better here in Beijing than in Harbin.) When I use VPN, I can get to Wikipedia. When I don't use VPN, I cannot get to Wikipedia.

A word about your blogger

I started this blog as a way of sharing my trip to China with the staff and directors of our small company (35 employees) and my family. I have gradually become aware that other people are also reading this blog. Welcome! I hope you find this blog interesting. For those of you who do not know me, perhaps a comment is in order.

If this blog has the feel of a "wide-eyed boy from the country," that is so. (Well, maybe the "boy" part is forgetting a few years.) It could not have been any other way.

I grew up on a family dairy farm in Vermont. (As you might expect, when we tell people here the population of Vermont, they find that amusing.) I have previously traveled only within the U.S. and Canada. I have not spent much time in cities even within the U.S., except for Chicago. Although New York City is not far from Vermont, I have now spent more time in Chinese cities than in New York City. My job for the past 25 years has involved working with farmers.

This blog naturally reflects my background, and the original intended audience consists of people much like me (some more widely traveled than me, and some less so).

I hope that provides some context for the perspective of this blog.

Beijing Taxis

The streets are full of taxis. So far I have ridden in four taxis--to the clinic and back, and after that to dinner and back. I have not waited so much as two minutes for a taxi. (However, I have spent many minutes waiting inside a taxi in traffic!)

Many of the taxis are new. On the trip to the clinic, I rode in a new Hyundai Elantra.

Drivers here at first seem crazy. Right-of-way is determined by the size of your vehicle, and pedestrians come last. Right turn on red is permitted without stopping. Aggressive lane-changing is the norm. Traffic signs and lights are sometimes treated as mere suggestions. I have sometimes seen drivers (not ours) drive down the left side of the street if the right side was full and the left side was empty. Yet we have seen very few accidents; two that I can recall.

All the vehicles I have seen here are standard shift, even the vans. One of our Chinese hosts commented that the combination of standard shift and the driving conditions here make the driver stay alert, and become a better driver; with automatic shift, the driver becomes lazy, and a poorer driver. I had a standard shift car as a young man, and this comment brought back memories of when driving was fun. All of the drivers we have had, both van and taxi drivers, have been excellent drivers. I felt perfectly safe riding with them. And I think they are having fun.

Clinic

After arriving in Beijing, I visited a part of China that was not on our schedule. I have come down with a minor infection, and thought it best to consult a doctor. Chris Barbieri, who has done an absolutely wonderful job organizing this trip, found a hospital for me with English speaking staff, and helped me make an appointment. While the rest of the delegation attended a meeting with the USDA's Agricultural Trade Office in Beijing, I took a taxi to the United Family Hospitals and Clinics.

The service was prompt, efficient and courteous. I was seen by Dr. Tony Lu of Seattle. (He attended the Albert Einstein College of Medicine, the same medical school as former Vermont Gov. Howard Dean, MD.) Dr. Lu prescribed some antibiotics and sent me on my way. Total time in the clinic, including paperwork and filling the prescription, was 1.5 hours. I spent nearly that much time in the taxi. Cost for the visit was about $100 for the doctor's visit and about $40 for the medicine.

UPDATE: Someone asked what the taxi cost. About $4 each way.

Bright Dairy in the news

Bright Dairy was in the news today. Danone is selling its 20% stake.

Travel to Beijing

Today we flew from Harbin to Beijing. Again the airplane was a Boeing 737, this time on Hainan Airlines. All of the Boeing 737s that we have flown on domestically have been relatively new. Note that both domestic airlines we flew on have English language web sites comparable to Western airlines.

Several things were new on this flight. Flight instructions were given by a line of stewardesses in the aisle in perfect unison, like a choreographed dance. The stewardesses were introduced, and bowed. Mid-flight a lottery was held with scratch tickets. This plane was nearly full. The stewardesses made the two hour flight pass quickly and pleasantly.

We flew over first cropland and then mountains. The view was hazy the entire way.


Unlike the Jinan airport, the Beijing airport was not empty; it was the opposite of empty! Mingruo left us at the airport, and we were met by hotel staff. Here is a view of the city on the way to the hotel. Building construction is even more ubiquitous here than in the other cities we have visited.

This is the view from my hotel room. (Actually from a reception area a couple of windows down from my room; my room does not have a balcony.)

Attached to the hotel is an office of the Agricultural Bank of China. The two buildings are nicely lit up at night.

Tuesday, October 16, 2007

Return to Harbin

Daqing is a wealthy oil town. We saw many oil rigs.

As in the other cities we have visited, we saw construction everywhere.

Buildings are most often constructed out of concrete. This apartment building under construction is located in Anda, near Daqing. We drove through Anda on the way back to Harbin.

Anda is the dairy capital of China. The city has 1,000 concrete statues of cows lining the streets and several dairy processing plants. At the entrance to the city is this statue of charging cows (this is the back side):

We stopped again at a rest area on the toll road back to Harbin. These farmers are harvesting corn just at sunset.

Daqing Buddhist Temple

After lunch we visited a Buddhist Temple in Daqing. This beautiful temple has just been built, and in fact is still receiving the finishing touches now. There were many more buildings than just the main temple shown here.



UPDATE: Dr. Guo says the name of the temple is Jingle Temple.

Yinluo Dairy Farm

We drove through the Yinluo Dairy Farm on the outskirts of Daqing. This farm has 6,000 cows in this location, and two other facilities of similar size in other locations. It is owned by the Liu family. They have plans to add another 10,000 cows.



We stopped briefly to see the AI (artificial insemination) facility, where they collect and sex the semen from 200 bulls.

From the farm, we drove to a milk processing plant under construction in a nearby industrial park. This facility, also owned by the Liu family, will cost $25M and will process mostly fluid products. This processing room is awaiting the installation of equipment.

Mr. Liu Hailong, Chief Executive Officer of China Milk Products and the son of the head of the Liu family, hosted lunch for us. Lunch featured many dishes that we had not seen before, such as sea cucumber. I think the answer to the question "got milk?" is yes!

Travel to Daqing

Today we went on a day trip to Daqing, a city about 120 miles north of Harbin. It was a beautiful fall day, and we saw much countryside. Roger, Mingruo, Mike and Joe traveled in cars. The rest of us rode in the van. We did not have a guide or interpreter in the van. We stopped once on the way to Daqing, at a rest area. Most of my photos were from the moving van, and so quality is affected.

The road was a 4-lane limited access toll road. The road was in excellent shape, better than many of our interstate highways, except that whenever we went over a bridge the transitions between road and bridge were a little rough. Bridges were typically over country roads; we did not cross many railroads or waterways. Traffic was light once in the countryside. We drove at 100 kph, which was faster than the cargo trucks, but we were regularly passed by black sedans and SUVs traveling much faster.

We saw people sweeping the sides of the road by hand.

We saw a lot of corn. I mean a lot of corn--mile after mile after mile--all being harvested by hand.

Trees have been planted along the roads and in other places. We have seen this elsewhere in our travels, too. It appears to be a massive program to establish tree belts throughout the countryside.

After corn, the next most common crop was hay. This was raked by hand into large piles and left in the field.

We saw only a few livestock, including beef and dairy cows, sheep and ducks.

The land was very flat all the way. There were none of the hills that we saw in Jinan. We were told that it has been unusually dry recently, and it looked it. We were told that the soil was a fine alkaline soil.

Monday, October 15, 2007

Dinner 10/15

The sponsors of the China International Dairy Development Summit Seminar hosted us for dinner. This was a large group, with five round tables. It was the first time we were not all at one table.

Toasting is de rigeur at these dinners, and for the first time I ventured to make a toast. I forget exactly what I said, but somewhere in there I mumbled something about appreciating this opportunity to learn about Chinese culture. I was helpfully informed that if I wanted to learn about Chinese culture, I needed to learn that the Chinese do not feel that they are good hosts unless their guests are comfortably drunk.

It was a most enjoyable evening!

Dairy Seminar Redux

We rejoined the China International Dairy Development Summit Seminar, and Dr. Mike Vayda presented an overview of Vermont agriculture. His Powerpoint presentation included both English and Chinese captions, and his talk was translated.

Following Mike's presentation, seminar attendees asked questions of our delegation on various dairy industry matters. The questions showed a strong knowledge of U.S. dairy markets, and I was surprised at how many attendees had an excellent command of English. The question and answer session--including follow-up questions--was almost entirely in English.

China Post

We had just enough time after returning to the hotel after lunch to walk to the nearest office of China Post. (Laura and Camila--hope you get your postcards soon. UPDATE: One postcard arrived 10/25 and one arrived 10/26.)

Whenever we go out, we see large bundles being carried by various means. Only once have I been able to see what was in one of these bundles, and it was recyclable plastic. There is no formal recycling system, but people will collect recyclable materials to sell.

Wonder-sun Dairy

We visited the Heilongjiang Wandashan Harbin Milk Products Co., Ltd. (aka Wonder-sun Dairy) near the Harbin airport. This government-owned company has several dairy facilities in China, with the main products being milk powders. This facility, however, built in 2000 at a cost of $20M, produces mostly liquid products. In the entrance lobby, they have a display of over 100 different products they produce (both liquid and powder).

I have noted two things about Chinese marketing. Chinese companies pay considerable attention to their brand, because the Chinese consumer has a high degree of brand loyalty. And Chinese companies can segment markets in ways I never dreamed of. The display above included milk powders for pregnant women, for middle-aged and old people, for students, for infants with zinc added, for infants with calcium added, etc., etc.

This is the yogurt packaging line. All the yogurt that I have encountered here has been the drinkable type of yogurt.

Dr. Mike Vayda did an excellent job selling the Vermont dairy industry, while we enjoyed samples of several of Wonder-sun's products: Black Land Pasture milk (a premium product), regular whole milk, drinkable yogurt, orange flavored milk and strawberry flavored milk. The four milk products were all in UHT packaging, with a shelf-life of 6 months or more.

To the right of Dr. Vayda are Dr. Wang Li, Director of New Product R&D and Mr. Liu Qing Quan, President of Wonder-sun. Dr. Wang studied under Dr. Guo.

Following the plant visit, Mr. Liu hosted lunch for us back in the city. Today's lunch included caviar, reflecting the Russian influence in this area.

I have not previously posted a photo of the entire table for one of these unique meals, and a photo does not do it justice. But here is an attempt. Note the large variety of dishes on the lazy Susan.

Click to enlarge photos

The photos on this blog are small and contain a lot of detail. How can you see a larger picture? Just click on the picture. Works on my computer, anyway.

You can also right-click on the picture, save the file somewhere, open it with a graphics or photo program of your choice, and magnify it all you want.

Dairy Seminar

The 5th China International Dairy Development Summit Seminar is being held today and tomorrow in our hotel in Harbin. This event is sponsored by the National Dairy Engineering & Technical Research Center and the China Dairy Industry magazine. We were invited to attend the opening speeches. The person speaking (indicated by the arrow) is the host of the conference, Dr. Bao Jun, Professor and Vice President of Northeast Agricultural University. Dr. Guo is associated with this university. Secretary Allbee is at the other end of the head table.

There were about 35 people at this seminar, not counting the delegation from Vermont. As I was to gradually discover, nearly all of them were either PhD's or representatives of dairy industry companies much, much larger than anything in Vermont. They were an impressive group.

Roger was told only minutes in advance that he would be expected to speak. It was his best speech yet! I wish I had a recording of it. He closed with some memorable lines about sharing our love for the cows and our love for their products.

Following the opening speeches, we all gathered outside the hotel for a group photo.

Sunday, October 14, 2007

Chairman Wang

Dinner was in a private room at the Northeast Forestry University, hosted by Mr. Wang Xue Quan, Chairman of School Council (equivalent to a university president in the US). Chairman Wang's son is at UVM.

I keep saying that these dinners are special, and they truly are. They are visual and culinary delights. And being seated at a round table is an excellent forum for conversation. Each dinner seems better than the last!

Fur Specimen Museum

The evening's activities were at the Northeast Forestry University. Dr. Yan Chun Xu gave us a tour of the Fur Specimen Museum at the university. This museum contains in one room hundreds of furs from various animals. This collection is the largest in China and is used to assist in identifying field specimens. It is especially helpful for understanding populations of endangered species.

Dr. Yan also showed us the collection of the State Forestry Administration Detecting Center of Wildlife, which helps identify specimens captured from smugglers. The two activities are similar, and often involve DNA analysis.

The two collections were fascinating, and we could have listened to Dr. Yan for a long time, but our next appointment was upon us.