Entrepreneurship in Western China and Tibet

by Laura E. Kirkpatrick

In the last two years, the people of western China have felt the impact of many remarkable changes. But as Beverly Chung, a student at Columbia’s Graduate School of Business found out, electricity, paved roads, hydraulics and cell phone coverage alone cannot change centuries of cultural mores and a tradition for subsistence farming and nomadic yak herding.   It takes people willing to break with tradition and pave a new way, while coaxing others to join them. People like Lu Rong Zhuo Ma, a cheese maker from a small village in the Yunnan province of Western China.

Overall, China’s economy has experienced great growth.  Since 1981, it has grown by an average of 9.9% per year since 1981.  While China has one of the largest GDPs in Asia (according to the World Bank, it was $3,241.8 billion USD  in 2007, second only to Japan at greater than $4,384 billion USD) its GDP per capita is the smallest at $2,450 - a whole decimal point away from the closest of Taiwan at $16,708.  According to The Economist Intelligence Unit, in China “Economic reforms have not been carried out according to a comprehensive blueprint, but have rather been piecemeal and ad hoc, best summarized by the Chinese phrase "crossing the river by feeling for stones."

The economic success of China and its socialist market economy are concentrated mainly along the coast and in eastern urban centers, leaving Western China and Tibet in dissolution.  However, in recent years, political and party leaders in Beijing, outside NGOs and cultural leaders have colluded to develop a “Go West” policy – hoping to join the booming coast towns and urban centers with this desolate inland.

Chung spent her summer in China working for Ventures in Development (ViD).  ViD is a nonprofit that aims to help poor communities in rural China build profitable ventures, and spread the benefits as widely as possible.  Chung worked on two ventures, both of which leverage the abundance of yaks in Western China.  There are approximately 12 million yaks in China, around 80% of the world’s total. The first was the opening of a retail store in Shanghai, featuring products made from the fiber of yaks, which is cheaper, softer and more durable than cashmere. The second focuses on cheese made from yak milk.  Not the scary yak milk that makes tourist always remember, but never fondly, yak milk tea, but an Asiago style cheese, perfected with the help of cheese-makers from Wisconsin called Mei Xiang Yak cheese. 

“China is not the best ecosystem for social entrepreneurs; there's little access to capital, networks, and the conditions that foster entrepreneurship. When I first heard of ViD, I thought its role was to incubate entrepreneurs,” recounts Chung of her summer. Chung learned that current context in Western China does not promote progressive thought, or as she described it "people do what they know."

Chung realized that visionaries assisting this new venture– Chinese renowned explorer, Wong How Man, or the Chinese-born, American-educated entrepreneurs who started ViD - were not the most dynamic forces behind this new venture, but rather select individuals like Lu Rong Zhuo Ma, who can drive change through inspiration and assurance.
"Social entrepreneurship relied on people who have the courage to be different, and are full of optimism and hope. Zhou Ma had this spirit of entrepreneurship and independence in everything that she did," says Chung on describing the cheese factory manager and community leader.

Zhuo Ma helped develop the yak cheese industry in a small community outside of Zhongdian, which is now called Shangri-La in the hopes of attracting more tourists.  The original factory, described by the BBC two years ago as “a log cabin equipped with wood-fired burners” has been improved, outgrown and expanded.  “After a two hour drive on unpaved roads, seemingly straight up in terms of elevation, I wasn’t sure what to expect,” recounts Chung on her first time to the cheese factory. “I didn’t expect to be greeted by pristine, modern factory on grounds that included guest housing and a dining hall.”

Most of this change has been led locally by Zhuo Ma.  Entrepreneurship is not her first challenge within the culture of rural China.  From the start, she has been strong and independent yet fiercely aware of her connections both in terms of family, and community.  She was the eldest child in her family, destined to “dang jia” – or serve as the caretaker of younger siblings, then marry a husband picked by her parents, and then eventually take care of her parents, husband as well as her own children.  But along the way, Zhuo Ma realized there were greater concerns than the realm someone else had ordained for her.  She left the arranged marriage and joined a dance troupe, becoming essentially a pariah in her own village (being the first woman to get a divorce) for greater opportunities and experiences. Even after she returned, remarried to a Tibetan from a different region, she did not return to subsistence farming but instead operated a small road side store selling goods to passing travelers. It's this independence and self-sufficiency that helped Zhuo Ma execute the goals of ViD - to create sustainable income within the community through a business model that includes the whole community in its supply chain. It was, according to Chung, the community's respect for Zhuo Ma that sold them on the project.

“It’s amazing how connected everyone is.” According to Chung, Zhuo Ma’s aunt and uncle, retired civic leaders in China’s ruling communist party, helped her initially become involved.  Through Zhuo Ma and her community’s hard work, the cheese is now available in high-end restaurants, hotels, and food shops in China's most developed markets - Beijing, Hong Kong and Shanghai. Yet, it wasn’t until this past summer that Zhuo Ma had ever been on a plane, or been to Shanghai.

Instead of incubating entrepreneurs, Chung and ViD have planted the seeds of entrepreneurship, but much cultivation needs to be done before the mindset takes hold throughout the culture. People, desperate for employment, are leaving rural areas in large numbers, heading for the boomtowns of the coast.

"We've created a modular business and can only hope that other communities can be inspired to build businesses in a similar model," says Chung of ViD's success with Mei Xiang Yak cheese. "But it will only work if more people like Zhuo Ma can be found, people willing to lead their communities and take on the challenge of running a new business."


Sang with Cheese
Sang with Cheese
Chung  at Shokay

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