Dairy cows about to be milked at a facility of the Mengniu Dairy Group.	Totally digital milking machines are used on the Mengniu International Pasture. Workers are pictured hosing down the milk cows.	A Chinese contemporaty literature seminar held in Hangzhou, Zhejiang Province.

SOCIAL partakers of alcoholic beverages feel at home in Inner Mongolia, where distilled liquor is served with main meals in every household, and is a prominent features of banquet celebrations. Drink is served during and between courses as an expression of hospitality. Pang Min, from Guangdong, is visiting the autonomous region to size up the Inner Mongolian investment environment. This is her second visit; her first was a decade ago. One of the local leaders reassures her, “Drink as much as you like, but we won’t force you. Upgrading our investment environment starts with leaving up to guests just how much they want to drink.”

“They also offer milk beverages in addition to alcohol,” says Pang Min, who suffers lactose intolerance (hypolactasia), and dislikes the taste of milk. “Local leaders tell me that Yili has developed a milk especially for hypolactasia sufferers."

Mengniu and Yili in Inner Mongolia are China’s two best-known dairy produce enterprises. Since the Chinese government acted on its resolve to popularize dairy products, the two enterprises have expanded their sales outlets from Inner Mongolia to the entire country.

The Chinese population’s increased purchasing power and greater health awareness has resulted in the government launch and promotion of a nationwide milk “drive.” Its motivation is to help China catch up with more developed countries in the economic field and to improve public health. Chinese drink fewer than 20 liters of milk per capita per annum, while the US figure is 100 liters. During the past two years, the Chinese government has implemented a school milk subsidy plan; the benefits to children of drinking milk are also publicized on Chinese TV stations.

Chinese Ministry of Agriculture officials stress the necessity of this drive, and its significance as regards Chinese public health. Premature death in China is generally caused not by disease but ignorance of what constitutes healthy exercise and rational nutrition. The government, therefore, seeks to promote and instill in the population scientific dietary awareness . Dairy processing enterprises have, understandably, rallied to the cause. Yili and Mengniu, with the backing of Inner Mongolia’s developed animal husbandry, have expanded their fresh milk market share to 55 percent of the country’s total. The two enterprises have since become synonymous with the rolling pastures and blues skies of Inner Mongolia.

Yili is promoting innovated dairy products, including milk and yogurt in flavors such as peach, mango and aloe. Its products are pollution-free, organic and contain no antibiotics or farm chemical residues. The group has also formulated milk suitable for hypolactasia sufferers. Pan Gang, youthful chairman of the board of directors of the Yili Group, explains, “In China, 50 percent of the population have an intolerance to sugar in milk and other dairy products. But 96 percent of the hypolactasia sufferers who have drunk the milk we have specially formulated for this condition have displayed none of the normal reactions, such as flatulence, stomach cramps or diarrhea." This product won the “highly recommended fluid milk products of innovation” title at the First Dairy Conference held in Amsterdam in the Netherlands.

China’s liquor industry has always been the crowning glory of its culinary excellence. Drink producers, until recently, were the highest generators of revenue in various localities, and liquor advertisements invariably occupy CCTV’s advertising “gold time slot.” But more consumers have now turned to milk, and milk, rather than alcohol, on the dinner table is regarded as the ultimate in civilized behavior. Hohhot, capital city of Inner Mongolia where Yili is based, advocates the dairy industry as a means to promote the city’s new round of economic growth. In 2006, Yili’s production value exceeded RMB 16 billion.

Cao Youtang, now in his early 40s, is a beneficiary of the new economic movement. He is the head of a 55 dairy-cattle household that supplies milk to the Yili Group. “I earn a handsome income,” Cao admits. “I can afford to send my son to a good school without having to work day and night.”

The Yili Group has standardized the operational mode of its herding zones in order to guarantee the quality of its fresh milk. Yili takes responsibility for providing dairy cattle, houses, pastureland and feed, and herding households contract with Yili to buy its cattle. The herding zone in which Cao Youtang works occupies 46.6 hectares of land, with a total investment of RMB 38.6 million, comprising 78 pastures, the largest of which occupies 0.4 hectare. Cao Youtang has contracted for such a pasture. It comprises a cattle shed, a brand new brick-and-tile house, an ensiling cell, a septic tank, a feed shop, and sports ground. It has the capacity to raise 50-100 head of dairy cattle.

The herding zone has planned roads, houses and pastures, and includes two up-to-date milking stations. Herding households have broken with the old style animal husbandry system. Herders now take their dairy cattle twice daily to a nearby milking station equipped with the latest automatic milking equipment imported from Sweden. “We collect 15 tons of milk daily,” says one of the workers at the milking station. “This would have been impossible prior to the milking station’s being built, when all operations were manual.”

Herders also benefit from the systematic training provided by Yili Group experts which teaches them rearing techniques, disease prevention and treatment. “In the past, if one of my cows fell sick, I would send for the vet, but now I can handle their small ailments,” says Cao Youtang confidently.

The Yili Group has also helped resolve another main worry in its localities - that of desertification. Overgrazing has been a source of public concern for some time. Certain government officials are convinced that overgrazing is the main culprit of the sandstorms that sweep through northern China and threaten Beijing. The Chinese government has begun applying laws that prevent overgrazing, and has earmarked reserves to prevent over-development of the animal husbandry.

“On the one hand, centralized management can reduce waste of grass resources and prevent excessive use of pastures; on the other, herding families that before entering the herding zone would have worked as farmers have, at the suggestion of the Yili Group, planted grass on the land they formerly cultivated,” says a staff member of the herding zone administration.

New dairy farms have totally changed the traditional agricultural system in force in China for decades of small, farming households on small plots of land, self sufficient through selling surplus grain. Farmers have now adapted to the market system. In the past decade, although the prices of certain agricultural products have risen, it is nonetheless a favorable market sector. “In the past, our annual household income from selling grain and vegetables was no more than RMB 200. Now we can earn RMB 3,000 from raising one dairy cow,” says Cao Youtang. “When I entered this herding zone, I could afford to buy 30 head of cattle; in the future I plan to buy 100 head at a time. By then, I'll probably have no need to worry about the pasture.”

The Cao family has hired a young local villager named Wang to herd their cattle. This has obviated the need for Wang, aged 20, to travel the 20 km to Hohhot to find work. He said, “Although the city provides more opportunities, my salary here is almost the same as for those who work in Hohhot, and I think I have better prospects.” Inner Mongolia statistics show that the Yili Group alone has enabled 5 million farmers and herders to emerge from poverty.