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.

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.

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.

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.