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New Beijing, Great Olympics

The background of Qin Qi, general manager of the Beijing Jingdong DaYunHe Agricultural Product Distribution Centre in Tongzhou, and Liu Xiangjun, chairman and CEO of Beijing Economic and Technological Development Area (BDA)-based BFR Gene Diagnostics Limited, are probably as different as those of any two men in Beijing could be. Qin was born and raised in Hugezhuang Township, Tongzhou District, and began his working life in his village’s fields. Liu was born in Tianjin in 1961, but moved to Beijing when he was 2. Liu was “heavily influenced” by his parents, both architectural engineers, to become a scientist or engineer, and he was among the first 500 Chinese students chosen to study abroad in 1978, during the early days of China’s reform and opening.

In 2008, when the Olympic Games are held in Beijing, the world will marvel at the changes that have taken place in China and its capital city. The municipality’s wide boulevards lined by gleaming high-rise apartment and office buildings, its modern international airport, subway lines and transport systems and its invaluable cultural legacy will be there for all to see. But the real success of New Beijing, Great Olympics may lie in the stories of people like Qin and Liu.

When Qin took over management of the Beijing Jingdong Da Yun He Agricultural Product Distribution Centre, the poorly managed firm, founded in 1983 to serve the marketing needs of local farmers, was near closing.

Although the area was known for supplying high-quality vegetables to urban residents in Beijing and its cabbages to Southeast Asian countries in the late 1980s, local farmers were still having trouble finding customers for their products.

In 2001, Qin, who also serves as the assistant head of the township under Hugezhuang Township Head Su Yawen and as secretary of the distribution centre’s Party committee, was challenged to turn the centre’s fortunes around.

He did.

“Our total sales in 2001 were 1 million yuan [US$125,014]. In 2005, our total sales were 1.2 billion yuan [US$152.53 million].”

The vegetable and fruit distribution centre has 450 employees, a production base incorporating 1,333 hectares of land, a 15,000-square-metre production plant, 57 distribution trucks, 75 community stores and 20 cooperative supermarkets. Its DaYunHe vegetable and fruit products are now sold in supermarkets, to governmental organizations, to military units, to universities and colleges and in 20 countries around the world. Seven of the firm’s products, including cucumbers, tomatoes, green peppers, cauliflower and lettuce, have been awarded “green food” status by the Ministry of Agriculture, and the distribution centre is the first in China to have been cited as a “No Public Harm Vegetable Growing Base” (Wu gong hai 无公害）.

It will likely be a supplier of “green” food to the 2008 Olympic Games, a huge responsibility, which Qin readily acknowledges. “When you supply vegetables to the National People’s Congress or to the Olympic Games, you cannot make mistakes.”

Almost all of Qin’s life has been spent in his home area. He still lives in the village where he was born and went to school. In 1978, he enrolled at the Beijing Agricultural University, graduating in 1982 with a degree in agricultural economics, specializing in international trade and economics. The university is renowned for the quality of its graduates, many of whom have assumed leadership positions in society. After graduation, Qin returned home, where he began working in the township’s publishing department. He worked as a reporter for eight years and gained valuable insights.

“Because I was born here and grew up here, I can better understand what people want and need. This helps me in my work.”

But Qin’s home area and the distribution centre have never faced a challenge as big as the one they face today.

“You see, we are located in the heart of Tongzhou New City. Sixteen of our 54 villages are being displaced and much of the farmland we have depended upon is being converted to urban use.”

As a business manager, Qin has had to scramble to find other product sources and land to ensure his firm’s future and that of the employees and farmers who depend on his network.

In fact, Qin said, few “original” farmers associated with the distribution centre still work there. “We are competing with other firms for employees. In 2001, a farmer might have been lucky to make 3,000 yuan (US$381) a year. Now, our average salary is about 10,000 yuan (US$1,270) a year, but a good worker can make 40,000–50,000 yuan (US$5,082–$6,353) a year. Of the 800 households involved in our enterprise, 500 now own a car.”

As one among the community’s leadership, he must be concerned for the welfare of the people in all the villages and for local implementation of the country’s “New Socialist Countryside” and “Build a Harmonious Socialist Society” strategies. In this regard, he said special apartments have been set aside in modernized communities, with amenities such as solar-powered street lighting, to house low-income farmers being displaced by the construction of Tongzhou New City, just one of the actions being taken to ease the villagers’ transition to a new way of life. In the remaining villages, Qin said, “Everyone will soon have black-top roads. We have spent 30 million yuan (US$3.8 million) to improve water supplies and our handling of solid wastes. Each village now has clean underground water supplies. Rubbish collection has begun and we are working to ensure that the toiletsare as clean as those in downtown Beijing.”

“Garbage is being collected and taken to a landfill. Before, people just dumped waste outside their doors. Now they can put it in refuse containers.”

In his business, Qin said he’s ranging as far away as Hebei and Shandong provinces for land to rent and for people to hire to ensure supplies to the distribution centre and the future of its business.

“The real pressure is in the market. Market forces require us to improve our technologies.”

In 2001, the distribution centre handled 10 kinds of vegetables. In 2005, the product line was more sophisticated and included 120 products, including ornamental plants favoured by China’s expanding middle class. Qin said the payoff comes when a vegetable that might have sold for 8 jiao (10 US cents) in the past sells for 8 yuan (US$1.02).

Working with the Chinese Academy of Agricultural Sciences, professors and experts are hired to train farmers in better farming techniques.

Tao Anzhong, a former professor at the Beijing Vegetable Research Centre (BVRC) or the Academy of Agriculture and Forestry Sciences, who was encountered in a vegetable greenhouse near the company’s headquarters, said, “I enjoy working in applied science involving vegetables and watermelons and giving technical support to DaYunHe.”

Qin said, “We have spent 500,000 yuan (US$63,564) to purchase 26 computers and to build up our long-distance education system to spread scientific agricultural knowledge and the latest information to our farmers. In 2004–05, about 2,500 farmers were trained.

“Our lives are changing. Many of us will cease to be farmers and will take other jobs. People are moving away from the land. Their lives will change a lot, for the better.”

The values and goals of the New Beijing, Great Olympics concept are also epitomized by Beijing Economic and Technological Development Area (BDA)-based biologist and high-tech businessman Liu Xiangjun, PhD.

After starting a small company–Pel-Freez Biotech (Beijing)–that dealt in products used in bone-marrow and stem-cell transplantation in the BDA in 2001, Liu sold the company to Dynal Biotech ASA, a Norway-based biotech company for about US$2 million in 2003. He then became president of Dynal Biotech Beijing. The firm was sold to US-based Invitrogen in April 2004 for a reported US$391 million. But rather than settling for a structured life as a corporate titan with Invitrogen, Liu resigned from the global biotech company, moved back into his old “start-up” offices in the BDA and started another firm, BFR Gene Diagnostics, Limited.

A combination of luck, technical skill and marketing insight has brought Liu to where he is today. He also had strong support from his parents.

“I was among the first 500 high school students who were selected in 1978 to go abroad and study. I had always planned to be a scientist, technology leader or something like that, but not an entrepreneur.”

After completing his studies and earning a doctorate in biology from the Free University of Berlin in 1989, Liu travelled to the United States where he became a post-doctoral fellow at the Waksman Institute for Molecular Biology at Rutgers University. He later engaged in cancer research at the Mount Sinai Medical Center before entering the private biotech sector in the United States in 1995.

“I decided to develop a tissue-typing product,” he said of his work in genetics and in the bone-marrow and stem-cell transplantation field.

Over the years, Liu became a chief biotechnology officer in Dallas, Texas, and a chief scientific officer for a company located in Milwaukee, Wisconsin, and became an expert in “human leukocyte antigen (HLA) typing,” a biotechnology that is needed to ensure proper matching of HLA genes between patients and donors in organ or stem-cell transplantation.

With China’s opening to the world gaining speed, especially after it won the right to host the 2008 Olympic Games, his trips to visit relatives and to investigate markets for his biotech ideas in China increased.

In 2001, with committed funding from the Chinese Government for a bone-marrow donor registry project, a new market was created in the transplantation field to better meet the needs of Chinese patients. So Liu returned to China, and, backed by investor funding, he founded the company which would become today’s Dynal Biotech Beijing.

“Working with the Chinese Red Cross, who organized the marrow donor programme, we helped our potential customers, the typing laboratories, set up their labs and buy or lease new equipment. We supplied them with the products we made in China and customized to their need. There are now 24 provisional stem-cell donor registries and 27 contract laboratories in China, with services in each region, area and major municipality.”

With blazing development speed, the programme quickly expanded from nothing to 100,000 tissue-typing procedures per year.

“Since 2001, China has created a bank of around 400,000 potential donors. When China’s registry grows to one million donors, we will be able to service 80 percent to 85 percent of those who need stem-cell transplantations. In the United States, they have five million potential donors.”

Liu said quickly establishing a bone-marrow donor registry in China was very important, because of a side-effect of the country’s “one-child” population-control policy.

“There is a 25 percent chance of finding an HLA gene-matched donor among siblings of a particular leukaemia patient who needs treatment that includes a stem-cell transplant. With one-child policy in place for more than 20 years, patients sometimes have no luck finding a matched donor among their immediate family members. They must rely on a donor registry to find a matching donor. However the chance of finding a donor in an unrelated population is extremely low [below 0.001 percent in most cases]. That’s why China needs a large unrelated stem-cell donor registry. Once you find a matched donor, there is a chance you can save the life of a leukaemia patient.”

“We need a huge pool to increase the chances for survival,” Liu said, “Because, if a person has a very rare tissue type, it may be even harder to find a match. The chances could be less than one in two million.”

Liu, who still has business interests in the United States, and who is vying for potential 2008 Beijing Olympic Games business, especially with a small, portable resuscitation device developed in the United States, said his return to China was a good decision.

“I am very close to my parents. So it was the right thing to do. I am familiar with the China market and my understanding of the potential market gave me confidence to test this competitive environment. I knew I could provide something of significance for my customers and indirectly provide better care for their patients.

“I was born in China and I am very familiar with this culture, but I was trained in the West and in western-style management. Here, in Beijing, I can better use my strengths and realize the value of my know-how. By setting my feet in China, I can still keep my global view.”