Genghis Khan pushed through Manchuria in 1216 after subduing the besieged Jin dynasty holed up in the walled capital of Beijing. The Mongolian self-made man and “Son of Heaven” would eventually rule the northern part of Modern China from what is now Korea, west to the Caspian Sea, crushing and consolidating cities and villages across steppes, rivers, desert, mountains and oceans of grass. The great Khan’s tactics were brutal and sweeping as the kingdom swallowed up land and whole populations, often leaving them less for wear.
 
I am sure the Mongol leader would have been a bit more affable if he had some Sheep Oil to rub on his saddle sores.

Eight hundred years on, Liaoning, centered in Manchuria, is an agricultural and industrial expanse, producing wheat, corn, steel and textiles. And a few sparks.

A quick overnight trip from Shanghai to Shenyang, capital of Liaoning, featured an opportunity to visit a modern, shiny steel production facility and tour the future High Tech Industrial Zone that is planned for Anshan City. It also gave a pause to view the solemnity of a Buddhist temples dotting a hilly landscape treed by oaks and ash turning golden and glorious in the early fall, the fragrance of autumn bearing along with it a wisp of homesickness.
 
Anshan lies south of Shenyang on the way to the large port of Dalian. Note the “A” below; just to the right--off of the map--is Kim Jong Il’s Neverland Resort.

Anshan is home to the the Anshan Xingong Construction Company. This is a factory that is building itself, literally. Partnered with Butler in the US, the Xingong Construction Company is the child of two of the most pleasant and polite individuals I have met in many years of travel there, Mr. Ji and his wife Madame Wang.
 
Knowing (or maybe it was a lucky guess) that I’d be traveling from the lower latitudes, they generously supplied the nice faux-fur collared jacket in Mao brown, which was appreciated as the temperatures hovered in the high 30s. They also gave me the nice red hat to wear; but no one bothered to tell me that I had, apparently, put it on backwards.

Mr Ji and Madame Wang are a successful entrepreneur couple, having started and sold a Chinese restaurant in An Shan and then plunged into the steel business. Reflecting the art of the possible in China’s entrepreneurial economy, they are busy as primary investors in the Xigong High Technology Park.

The factory, covering the better part of what would be a city block, is literally making itself. The steel girders for the erector-set construction are cut and welded in one building, and hauled outside to be assembled in buildings. Using US  know-how and Chinese local ingenuity, they can build acr-size structures with near 100 foot ceiling heights. Beautifully painted and brilliantly illuminated, here is a completed building at the site.

Four hundred workers will eventually be employed at this plant, making the girders and components to build the factories to make the products that will be bought by the workers who will build the factories...
 
...and the highways, pylons marching into the distance.

Mr Ji and Madame Wang show the plan view of the new high technology zone to be built nearby. The area will be 1 km by 1/2 km in extant, occupying a near-empty plot of land a few miles from the steel factory.
 
The government is pumping in Billions of RMB into the area as part of a concerted and focused effort to revitalize this area. Liaoning is the heart of the old heavy industry, a concentration of old State Owned Enterprises cranking out industrial products. Under the old command economy, these SOEs produced tractors and trains and machinery with no regard for market demand. Industrial output was disconnected from consumption. Often, the unused products were stored to rust to their axles, unused.
 
Now, Ji and Wang plan for integrated technology facilities, which will be drafted from the populace who will be educated in the technology education centers built nearby. The plan is no accident and is a result of China’s assertion to build its own intellectual capital, known as Indigenous Innovation. Chinese-grown know-how, with policy specifically crafted to develop the skills in internally to compete globally. Instead of issuing edicts for tractors, the central government issues edicts for broad development-oriented goals, then spends money to make them come to fruition.

Interestingly and perhaps heartening is the pride with which our interpreters relate the kindness of Mr. Ji and Madame Wang to their workers. They are people without formal education, but have worked extraordinarily hard to create a highly-organized, well-planned, clean and worker-oriented factory. Their good fortune may, too, be because of their lucky cat, with one blue and one green eye. The factory mascot keeps watch in the large relaxation/social room.

When up and running, the factory will employ 400 workers, about one-half of them living in on-site dormitories. Ji and Wang hope to employ locals that have been trained in the vocational college being finished up down the road.
 
Peter’s assistant, Yali from Hunan, tips her hat to the progress.

Back from the field trip, Peter Zhang (left) my oldest friend in China and his boss Mr. Li enjoy a presentation by our Mr. Ji and sample some fruit, including the local pear (nan gua li) that “only grow here. It was planted in Shanghai, but the soil, the water and the air are different. They were not good.” The pears have a distinct, slightly sour taste, a hint of cloves, maybe.

Peter has guided me through some most interesting business rituals these past 10 years, sharpening my skills at chopsticks (kwai zi) and mou tai and helping me build my prodigious vocabulary of twenty Chinese words, mostly dealing with toasting, being happy, greetings and farewells.
 
And how to find a meal. Clockwise, from top: beef and onions, barbecue ribs, fried flat dough, sweet and sour chicken, mushroom mix, flat meat pies, apples with mayonnaise (not unlike a good Methodist pot luck fare), pork barbecue, and a couple of unidentifiable/unrecognizable dishes rounding out the circle. All good. And this was a “simple lunch”.

Peter has been working with the China Council for the Promotion of International Trade for a number of years, assisting trade and investment projects all over China. We have aligned our interests and are developing a partnership to cooperate with US investment sources and technical know-how. The wild pony is in the corral, now the question is, how to ride it?
 
Indigenous Innovation
 
The media reports of China’s explosive growth are not overstated. In fact, the changes are happening faster than much of her own populace can absorb. In only 10 years, automobile traffic has crowded out bicycles. Superbly-engineered highways link major cities to airports and to each other. Electronics development and adoption of technologies is wide and deep. Food products have exploded in variety and sophistication.
 
Air quality is notoriously poor in the many cities. Water supplies are threatened.
 
The government is committed to redress many of its issues with its latest 5 year Program (previously known as the 5 year Plan during China’s Soviet-influenced period). The program has specific targets for technology absorption and development. Some of these may be viewed as specific threats to US interests (and Intellectual Property Rights are still wantonly flaunted). However, just as China is a country with vast differences in regional and provincial interests, the government is a mosaic of traditional, emergent and progressive factions, often struggling for control of specific markets or technologies.
 
Engagement through coalitions and associations is an effective method to work to influence policy-makers who are more inclined to develop an open process, rather than the traditional closed communications and decision-making.
 
Sometime within the next twenty years, it is predicted that China and US’ economies will be similar in size. As reported by our colleagues at APCO Worldwide in Beijing, China aims to be an “Innovative Society” by 2020. The specific steps, as outlined in the strategy are:
 
1.  Increase expenditures on R&D
2.  Strengthen “Indigenous” innovation (through preferential treatment of Chinese organizations)
3.  Promote Chinese Standards internationally
4.  Reduce China’s dependence on foreign technology
5.  Develop China’s brands globally

Specific measures to promote indigenous innovation include:
 
1.  Develop national technical standards (Focus on 3G Mobile, DTV, WLANS, RFID)
2.  Increase participation in international standards bodies (ITU, ISO/IEC)
3.  Use Government procurement (exclude imports that do not meet standards)
4.  Incentive programs (particularly to State Owned Enterprises)
5.  Apply funding to R&D programs
 
[Thanks to: APCO Worldwide Beijing. Sharon Ruwart and Jimmy Goodrich. APCO is a PR, policy and research company that focuses on market opportunity, risk mitigation and brand positioning, among other things. www.apcoworldwide.com]
 
Buddhist Temple
 
I fell down on jotting some of the details of our 30 minute visit to the temples in the hills. The complex, parklike and beautifully maintained, winds up the hills on the outskirts of An Shan. On a drizzly day, it is not too crowded and we wander through some of the temple buildings, taking care not to stir up the unfriendlies--I mean, check out the pects on this guy!

The whole of this province is threaded through with Buddhist temples and monasteries. They have been isolated for many years, the isolation part of the faithful’s practice and, to a significant degree, the reason for the survival through centuries of conflict, not to mention the brutal repression of culture during the “cultural revolution.” These temples, fortunately, were left alone.
 
The landscape and the flora are not unlike the Blue Ridge mountains and, in this early fall afternoon, red and orange leaves holding tenuously to the outstretched oaks and ash remind me of Virginia. And home. After a few weeks it is good to return, if only to ponder the good fortune of seeing these places and being graciously greeted along the way.
 
Perhaps the benign Buddha will shine its fortune on our partnership.

Bonus Puzzle!
 
Find the differences in these two pictures.

Beijing
 
Quick notes on Beijing. Besides, it’s getting late and, if you have plowed through all of this, then next time we’re together I’ll share my vacuum-packed goose feet with you. Nummy with beer.

We made a visit to Dr. Xie with the Beijing Aerospace University, an impressive facility with teaching and research facilities.

Dr. Xie is a Reliability and Failure analysis expert and has worked for 15 years in the US. He is one of those unique individuals that can cross cultures and can speak of the technical and business opportunities in both markets. His current work supports several aerospace projects. As mentioned above, China’s pursuit of Indigenous Innovation is fervent and multi-spectral, covering technology and business practices. Dr. Xie allows us an hour of his valuable time and we tour the University. The main entrance to the campus soars above our heads.
 
The museum is being renovated; someone saved the bones of old airplanes, instead of melting them down for aluminum cans. They are stored outside in a lot. Recognize the MIG, perhaps?

Finally, our last night in Beijing, Peter Zhang and his wife Hui Li, professional singers, have invited us to dine at Turandot Restaurant. Turandot is the Puccini opera. Hui Li has performed all over the world and now have settled into the restaurant business. The theme restaurant features a stage where they congregate with their friends on evenings and weekends to pursue their passion. All are welcome.

Something about opera makes the world a closer place. One last shot with our friends and fellow travelers before we head back to the US.

Thanks for checking in on us. Stay well and don’t forget to eat your veggies.

I’ll see you at baggage (not cabbage) claim.

Mike Violette
ACB & Washington Labs
from Anshan to Beijing

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