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UPDATED: December 22, 2008 NO.52 DEC.25, 2008
Sugar Palace
Xiwang Village in Zouping County leads rural China on a path of urbanization

SWEET LIFE: Xiwang Group Co. Ltd., a giant corn sweetener producer in Zouping County, has made significant contributions to local development (COURTESY OF XIWANG VILLAGE)

Although rural Zouping County is known as a "window of China" from which many foreign scholars got their first impressions of the country, its rise as a boomtown in central Shandong Province has been equally impressive. But its success is measured not by its number of high-rises but by the economic fortune of its vast countryside.

Xiwang Village, a 15-minute drive north of Zouping, is the area's latest rural success story in which business acumen and agricultural modernization have combined to produce a rich harvest. Universal health care, subsidized education, three-story villas and cars, as well as community recreational facilities are visible signs of the rural prosperity that the county's over 600 residents enjoy.

Every family in the affluent village has at least one apartment, one car and 100,000 yuan ($14,609) in the bank, said Xia Yinglu, an official with the Zouping County Government. "This was inconceivable 20 years ago," he added.

For a fast-changing village like Xiwang, two decades have been long enough for such a transformation to take place. The once desolate small village with muddy country paths has become populous and interlaced with wide concrete roads. Brand-new apartments and villas are erected one after the other. And more and more supermarkets and restaurants share the land with birch trees and wheat fields.

Scholars from the United States flocked to the village in the 1990s to find out what had made this once sleepy area so rich and how it was able to modernize. The answer was the Xiwang Group Co. Ltd., which at that time was the village's pillar business and lifeblood.

In the early 1980s, the farmers of Xiwang, who lived hand-to-mouth, were no different from their peers in other parts of the country. The turning point came in 1986 when Wang Yong, the then village Party secretary, proposed setting up a village-run oil and cotton mill. Wang donated his 200,000-yuan ($29,218) worth of flour mill for the collectively owned factory, which was named Xiwang. Other villagers contributed funds as well. Finally, with an initial investment of 400,000 yuan ($58,437), the factory that would change the villagers' lives came into being at the end of the year.

It is not hard to imagine the bumpy ride that the farmers had in starting the business from scratch. In the following decade, the nascent factory had teetered on the brink of bankruptcy several times, but miraculously survived and was able to embrace modern technology, said Sun Jianguang, a senior manager at Xiwang.

"Local farmers thought the village officials had even gone mad when they promoted non-local staff to important technological and managerial positions," Sun said. "Several years on, they are eating their words."

Today, Xiwang has become the largest corn sweetener producer in Asia. It has 8,000-odd employees and is involved in an array of sectors. Through many years of spectacular growth, its total sales revenue amounted to 10.5 billion yuan ($1.53 billion) in 2007, comprising the bulk of the village's income. In December 2005, its subsidiary, Xiwang Sugar Holdings Co. Ltd., went public on the Hong Kong Stock Exchange, making it one of the few listed companies in the county. This is the reason why the village has been dubbed "China's Sugar Palace."

Farmers are now a rare sight in industrialized and urbanized Xiwang. In 2002, Xiwang disbursed part of its shares to some villagers in exchange for the usage rights of their contracted land, totaling about 400 mu (27 hectares). The village's remaining 700 mu (47 hectares) of farmland was collectively transferred to 12 residents who increased their yields through large-scale mechanized farming. In turn, they have rewarded all the villagers with 100 kg of wheat per mu annually. Besides this, the company had boosted the village's agricultural production though bulk purchases of local grains at much higher prices than in the markets.

Xiwang currently employs most of the village workforce at a handsome monthly salary, while some workers also run their own businesses on the side. As part of its community drive, the company has built modern apartments and villas and sold them cheaply to the villagers. It also buys them social pension insurance and distributes a considerable amount of dividends to those who are company shareholders. Xiwang also subsidizes education for youngsters and health care for the elderly.

In November, a new high-rise apartment building constructed by the company for senior citizens was completed. It provides cost-free board and lodging for all villagers over 65. So far, nearly all those who are eligible have moved in.

"My life here is comfortable, and I'm taken good care of," said Sun Xiuying, a 74-year-old resident. "I can get a subsidy of 100 yuan ($14.6) per month and even some gifts on festivals."

Xiwang is not the only urbanized village in the county. Others are now catching up, said Xia, citing Dongwei Village, northeast of the county, as a case in point. With a group of booming enterprises there, Dongwei has emulated Xiwang's path to modernization and affluence.

"It's hopeful that Zouping will eventually become a catchphrase for rural wealth in China" Xia said.

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