One way or another, China impacts us all

by George Putnam, president and CEO, Yankee Farm Credit

The focus of this issue of Financial Partner magazine is China’s booming economy and its impact on Northeast agriculture. Coincidentally, the state of Vermont sent an agricultural trade mission to China in October, led by Secretary of Agriculture Roger Allbee. Our trip followed Vermont Governor Jim Douglas’s trade mission to China, which was this past June.

I was fortunate to be one of 10 people in Secretary Allbee’s delegation. Our group spent 10 busy, eye-opening days, visiting five cities, such as Shanghai and Beijing; two large dairy farms and several milk processing plants. In addition, we also attended the China Ag Trade Fair, and met an extensive variety of remarkable people, including business leaders, government officials and academics.

China, with its 1.3 billion people, is becoming more prosperous, and is a major influence on world markets which affects both farm inputs and farm products. Farm milk prices, for example, are at record highs this year partly because of increased demand from China.

My impressions of China

The trip was a fascinating experience. In many respects, China is more advanced than I expected. Roads and airports are modern and built for growth. Domestic Chinese airlines are at least as good as U.S. airlines. And its cellular phone network is robust.

The amount of new building construction is staggering. Before my trip, I had read about this, but it didn’t fully register until I spent time in Chinese cities. Frequently, we would travel within a single city for 45 minutes or an hour, all the while noticing multitudes of building cranes from our van windows.

In other respects, however, China still has a ways to go. Air and water pollution are considerable. Air pollution varied from day to day according to the weather, but on a bad day, it was distinctly unpleasant in the cities. In the countryside, we saw miles and miles … and miles … of corn, all harvested by hand since labor is so plentiful.

My main impression of China is that it is a country undergoing rapid change. In my last column, I discussed changes in Yankee’s territory over the past 200 years. I thought those changes were significant, but they pale next to China’s evolution. China has experienced comparable changes in just the past 30 years alone. In addition, China’s 2001 entry into the World Trade Organization and the upcoming 2008 Beijing Olympics ensure that their pace of change will only accelerate.

Farm products produced by Yankee customers will likely be sold in China, either directly or through cooperatives or other channels. We all buy made-in-China products, and we all also buy or sell products whose price is affected by increased demand from China, such as oil and milk. In short, one way or another, China impacts us all.

Yankee ACA blog

While I was in China, I kept a blog (short for “Web log”) of the experience. I posted commentary and pictures, which you can view at www.yankeeaca.blogspot.com..

This letter appeared in the Winter 2008 issue of Financial Partner (F.P.) magazine, Yankee Farm Credit's customer publication. Click here if you would like to start receiving F.P. magazine in the mail.

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