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Central China metropolis offers pleasant surprises


EMERGING This Yuancheng site, where a state-owed company used to be, is now synthesizing cinnamon chemicals and related products for export.
MARCH 30—I don't know what I thought Wuhan would be like, but it has exceeded all expectations. It's scenic, dynamic, and its people are evidently very learned. It's a city that many people in the West couldn't place on the map, but that situation is probably going to change soon.

It's immediately obvious that Wuhan, with a population of 10 million or so, has a unique character. The Yangtze River is the main geographical feature of the city, and many bridges link its different parts. Dotted throughout Wuhan are spectacular old structures like castles and temples. About 15 minutes' drive from the business center of the city is the striking campus of Wuhan University, a tasteful mix of old buildings, sports grounds, and forest. A little farther away is East Lake, one of China's major tourist attractions and one that local authorities carefully protect from pollution.

The companies I visited welcomed me like a long-lost brother, despite my appearing without an appointment and from a magazine they hadn't heard of. At two companies, I was immediately urged to see the production facilities, even though I had not yet expressed a desire to. In one case, the visit was so thorough that I was offered a chance to see the employee dormitories.

Ye Chuan Fa
Zhong Jiacheng
The longest visit was at Wuhan Yuancheng Chemical Manufactory, where I spent most of a Monday afternoon and even had dinner with managers. Our dinner took place in one of Yuancheng's own restaurants, an odd place that claims to serve Chairman Mao's favorite dishes but is decorated like an African jungle. Yuancheng Group is active in real estate, hospitality, chemicals, and paint, and it also makes statues and decorative artifacts. Its main export business is in fine chemicals such as cinnamaldehydeonitrile, cinnamic acid, melatonin, and carnitine. The group is growing extremely fast.

After a tour of Yuancheng's facilities on the outskirts of Wuhan, I was introduced to Yuancheng Group Chairman Ye Chuan Fa. Ye owns all of Yuancheng, but he is the very definition of unassuming. He dresses in the plainest clothes and is thankful for the simplest kindness. He insists on being treated like an ordinary worker and even travels in economy class when flying. The only hint of wealth is an expensive-looking watch, which is barely visible under the sleeve of his sweater. His staff reveres him.

Ye amassed a fortune in the 1980s trading real estate in Wuhan. He became a Hong Kong resident in the late 1980s as insurance against a crackdown on the rich by Chinese authorities. He has since relaxed his attitude toward the government. Nowadays, he says, the biggest opportunities in China lie in buying state-owned companies on the cheap, something that foreign investors rarely do. There used to be a state-owned factory on the site where he now makes cinnamon chemicals and related products.

A man with extensive foreign business experience, Ye prefers to deal with the Japanese because they normally have a Chinese speaker--Taiwanese usually--on their team. Despite the large Chinese-American community in the U.S., Ye's American customers rarely have a Chinese speaker with them, leaving it up to Ye's staff to bridge the gap. Thankfully, several of his employees can read and write English, although their speaking lacks fluency. "But we always manage to communicate," he says.

Another fascinating interview was with Zhong Jiacheng, a professor of chemistry at Wuhan University. Zhong observes that people on the coast of China are naturally gifted in business, a factor in the fast growth on the Chinese coast in the past 20 years. But in Wuhan, he says, people tend to be far more intellectual. The city has about 800,000 university students, 48,000 of whom are at Wuhan University.

FADING The assets of old and inefficient state-owned companies can often be bought inexpensively. Shown here is an industrial chemicals plant in Wuhan.
SENSE OF HISTORY Wuhan has made efforts to preserve its cultural heritage.
China has formidable technological capabilities, he says. But the places where those capabilities are found--Wuhan being one example--have been slow to adapt to the market economy. In the next few years, he thinks China will demonstrate its technological capabilities with the global launch of products based on Chinese science.

Chinese entrepreneurs haven't jumped on local technology in part because it has been far easier to make money in China doing something else. Although certain Chinese technologies could be commercialized quite profitably, Chinese entrepreneurs have been able to book higher profits with trading and real estate. In this context, Zhong says foreign firms have shown more interest in Chinese technology than have Chinese companies. He adds that it is too bad that most Chinese entrepreneurs cannot see farther than their nose.

Zhong heads a research institute, IRLab, that aims to develop nanomaterials and license the technology to other companies. He says he does not mind licensing to foreigners, but, in an encouraging sign for China, Chinese firms have shown more interest so far. The labs where he operates do not look like much. But IRLab is building new facilities at a nearby industrial park where technology developed at the institute will be tested on a larger scale.

Wuhan University is ranked as China's third best after Beijing University and Tsinghua University. About half of Wuhan University's science graduates go abroad for further study, compared with about a quarter for the university as a whole. Zhong says most of the 10 founding professors of IRLab have moved abroad. But he doesn't resent the loss of talent. "It's true that our best brains go to the U.S., but the U.S. nurtures them further," he says. Those who go abroad eventually share their advanced knowledge and foreign experience either by returning to China or by providing advice to Chinese institutions, he adds.

Wuhan has been relatively slow to take advantage of the opportunities provided by China's opening to the world since 1978. Other than the city's focus on academic pursuits, one reason for this has been lack of central government support. Beijing first instituted policies to encourage the development of coastal regions, followed a few years ago by policies to develop the west of the country. Located in the middle of the country, Wuhan was ignored. The city is now getting its act together without help and is betting on sophisticated industries for its growth. Wuhan is home to China's largest biopharmaceutical industry park.

Some young people in Wuhan believe in their native city's prospects. At Yuancheng, Hu Zhenxin, a sales executive who graduated from Wuhan University's biology department, says he wants to go to the U.S. for his graduate studies. He is now applying to study at Ohio State University and Massachusetts Institute of Technology this fall. But after his foreign studies, he plans to return to Wuhan.

[Back to Chronicling the Yangtze River]

  Chemical & Engineering News
ISSN 0009-2347
Copyright © 2004

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