Hohhot forges partnership with Michigan city

A letter of intent to create a sister cities relationship between the Hohhot Municipal Government of Inner Mongolia and the city of Lansing, Michigan, was signed in Lansing on Tuesday during a three-day visit by a Hohhot delegation.

"Economic development has been a priority of mine since I took office. I truly believe that we can accomplish great things together in that area," Andy Schor, mayor of Lansing, told attendees at the signing ceremony.

Schor said the two cities have much in common: "We are both northern regions that border other countries and are both blessed with natural beauty, including many rivers and lakes. As fellow capital cities, Hohhot and Lansing can learn from each other of both our advantages and our challenges.

"I am excited for the future of our partnership," Schor said. 

The letter of intent was signed by Li Hong, director of the Foreign Affairs Office of Hohhot, and Barbara Mason, president of the Lansing Regional Sister Cities Commission.

"We have learned a lot about Lansing during this in-depth exchange, and this visit has laid a solid foundation for our collaboration, especially in the dairy industry," Li said.

"The decision to pair with another city is not taken lightly. Nor do we agree to joint ventures without a lot of exploration and planning," said Mason, emphasizing that economic development has become a key component of the program.

Keith Lambert, vice-president of business attraction at the Lansing Economic Area Partnership (LEAP), said the collaboration effort picked up in March, when he led a Lansing delegation to visit Hohhot.

"We had a lot of interests in meeting with Chinese dairy-processing companies, because we have so many high-quality dairy products in the state of Michigan. We just saw a natural connectivity with the city of Hohhot, given both Yili and Mengniu are located there," said Lambert.

Strong interest from the industries and support from both governments set the stage for quick mutual visits, he said.

Executives from the Yili Industrial Group and Mengniu Dairy Co, the largest two dairy companies in China, are also in Lansing to attend a Dairy & Agtech Summit to learn about opportunities, particularly in the dairy industry.

On Tuesday, the delegation met with dairy industry business leaders, city and state government officials, and dairy and agriculture research leaders from Michigan State University. On Wednesday, they visited farms and dairy-processing facilities.

Gary McDowell, director of the Michigan Department of Agriculture and Rural Development, said that Michigan processes 11 billion pounds of milk a year, and its dairy industry is worth $15.7 billion. China is the second-largest dairy export market for both the US and Michigan, he said.

In recent years, Michigan has witnessed an oversupply of milk that depressed prices and caused many dairy farms to go out of business. At one point as much as 2 percent of milk being produced was dumped, as it was not cost effective to ship long distances to be processed.

"We are looking for new markets to export more excessive products, and we can produce more. We are willing to bend backward to work with any country, especially Inner Mongolia, to help see that happen," said McDowell.

McDowell, however, said that the trade dispute between China and the US has brought uncertainty to business.

"What's going on is hurting Michigan and hurting our farmers. China is a big importer of Michigan dairy products. Michigan has no say in federal issues, but we hope we can reach an agreement very quickly," he said.

"The signed letter of intent basically gives us a year window try to put some sort of economic development project together," Lambert said. "We are ready to provide incentives, training, a real estate survey, to make something happen. Another delegation will revisit China, probably over the upcoming winter months."

Liu Dapeng, vice-president of Yili, said the company learned a lot from the visit.

"Michigan has a more mature, modern dairy industry with a longer history. From what we have seen, there is great potential to work together and leverage their advanced agricultural technologies and equipment," said Liu, indicating that Yili intends to invest in dairy processing in Michigan as a result of the visit.

The law firm Butzel Long and the Michigan US-China Exchange Center have been the driving forces behind the cities' partnership.

Xian He, a lawyer with Butzel Long, and Jerry Xu, president of the Michigan US-China Exchange Center, said they are quite happy with the results.

"Our firm has been a pioneer law firm handling Chinese investment since the early 1990s. We hope to see the US-China relationship become stable and mutually beneficial again," Xian said. "We believe the potential dairy collaboration between Lansing and Hohhot will mark the end to our trade conflict, as well as a new era between the US and China."  

"The collaboration between Michigan and Inner Mongolia in the dairy industry will certainly benefit Chinese customers and US dairy farmers," said Xu.