The doorstep to South Asia
Under ‘ B& R’, businesses in China’s Tibet build ties with neighboring Nepal
After several tons of wool was sheared in August 2016 in Ngari Prefecture in Southwest China’s Tibet Autonomous Region, the wool was transported about 1,500 kilometers to a factory in Dagze county, about an hour’s drive from Lhasa.
On a recent Sunday morning, several workers graded and sorted the wool at a factory that was established by Dagze county’s Tibet Holy Trust Industry & Trade Co in 2005.
The company is a woolen manufacturer that makes use of the large herds of sheep and yaks in the region.
In 2016, the company paid about 14.8 million yuan ($ 2.2 million) in total for 1,030 tons of sheep wool and 110 tons of yak wool that it received from herdsmen and rural cooperatives in Tibet, according to a report the company gave the Global Times on Sunday.
The company generated 27.9 million yuan in revenue in 2016 and created 45 permanent jobs and more than 50 seasonable jobs, the report said.
“Some [ of the workers] are Tibetans who used to live below the county’s poverty line. Now, we pay them a monthly salary of about 3,000 yuan,” said Zhaxi Wangdui, head of the factory.
The average annual income of a farmer in Dagze was 5,005 yuan as of 2010, the latest data available, according to a post published on the local government’s website in February.
In 2013, the company decided to start collecting yak wool, as yak is an iconic animal in the region.
“There are two things important for us in Tibet – highland barley and yaks. Although the yak’s milk and its meat are very popular, people here haven’t made full use of its wool yet,” Laba Chilie, the company’s CEO, told the Global Times on Sunday.
On the 290- kilometer drive from Xigaze to Lhasa, cars have to repeatedly stop for yaks crossing the road.
“We’re very close to each other,” said Pingcuo, a local Tibetan in Lhasa. “They [ the yaks] give us many things such as yak butter, milk and meat,” he noted.
Due to its natural warmth, Yak wool is used to make sweaters and scarves. It is also a profitable commodity.
“If a household has 50 yaks, it can earn 3,000 yuan per year by selling their wool,” Chilie said, noting that the market price for yak wool is 30 yuan a kilogram. A single yak can produce about two kilograms of wool each year.
The wool fibers are first spun into yarn, part of which is then shipped to Chilie company’s factories in Shanghai and Jiaxing, East China’s Zhejiang Province, where it is used to make sweaters and scarves. Another portion of the yarn is transported by truck to the Gyirong port, the largest business land port connecting China’s Tibet with Nepal, where it is exported to a factory in Nepal.
“For making carpets, the labor cost in Nepal is less than 1,000 yuan per month on average, but we have to pay workers here nearly 6,000 yuan. You can see the difference,” Chilie said, noting that transporting products back and forth between China’s Tibet and Nepal is not difficult.
There is demand for the carpets among Tibetans – both those who live in Tibet and those who reside in places like Northwest China’s Qinghai Province.
Targeting South Asia
Chilie’s trading company is not the only one in Tibet to benefit from close proximity and connections to Nepal.
He Ping, a businessman from Southwest China’s Sichuan Province who has been investing in Tibet for six years, had his doubts at first about launch of a 1.2- billion- yuan cultural park in suburban Lhasa in 2011.
The park is located on the mountain slope facing the Potala Palace, a famous site in Lhasa that attracts hundreds of thousands tourists every year.
“It was hard to imagine that the opera Wencheng Princess staged at this park could earn 100 million yuan at the box office [ in 2016], thanks to the growing number of tourists coming to Tibet,” he told the Global Times on Sunday morning.
When Song Cheng, an employee of He’s company, Usunhome Group, entered a vast stage at the park, an actress was rehearsing for an upcoming performance.
“We have special light effects, and the opera plays most nights for tourists,” he said.
On one side of the stage, workers placed a statue of Buddha, while dozens of horses relaxed nearby.
“They are also involved in the show,” Song said.
As a parallel story, He said he has been considering whether to invest in another opera called Princess Chizun of
Nepal in Nepal’s capital of Kathmandu. Much like the two princesses married to the Tibetan King Songtsen Gampo, a similar opera to be launched there may help enhance cultural ties between China’s Tibet and Nepal.
For some local companies, Nepal is the doorstep to South Asia. Fang Qihao
is a young entrepreneur who came from Central China’s Henan Province to work in Lhasa, where his team expects to find business opportunities for the South Asian market.
Obstacles to overcome
However, the difficult traveling conditions in the mountainous areas, altitude sickness, and underdeveloped telecommunication services have made Fang’s life in Lhasa much more challenging.
He came to work at an e- commerce start- up Ayun in the region in April 2016, and has been spending several weeks each month in different villages and counties to push e- commerce services there.
“We have two online platforms. One sells local products nationwide and the other sells products from India and Nepal to Chinese costumers,” he said.
Fang said he frequently drives to remote areas to talk with rural collectives about opening logistics services stations.
“It takes time, but in Tibet, getting support from the local government is indispensable to doing business,” he told the Global Times on Sunday.
In Tibet, projects are mainly driven by the government, said one veteran local businessman who preferred not to be named. If the authorities want to develop a certain industry, it is more likely that they will approve projects related to that industry.
“Also, because companies in the region have less access to financing than those in the eastern and coastal regions, government support is crucial,” he said.
The lack of support facilities also hinders local companies from growing further.
“If one machine at our factory here breaks, then I have to drive hours to get it fixed,” Chilie said. “That’s not how things work in Zhejiang.”