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Mark O'Neill

On the edge of a desert in the northwest, four fierce German shepherd dogs on long leashes guard 1,400 tonnes of ephedra, the plant that can be used to make the drug ice.

 A few hundred metres away, earthmovers are levelling the ground for the construction of a factory which will extract a powder from the plant and sell it for further processing in the mainland and the United States.

 The project is a gamble by Guangxia Yinchuan, a company listed on the Shenzhen stock exchange, to tame the desert and profit from it.

 In this case the ephedra will be used in making Western and Chinese medicine rather than the mind-bending ice.

 Guangxia is also planting grapes on a nearby site, reclaimed from the desert, to produce wine.

 'When we proposed this, some in the company said we were mad,' said president Zhang Jisheng, sipping one of the first samples of his Helan Mountain Dry Red.

 'They said that we were pouring money into the desert.

 'I do not agree. Within three to five years, we will have a stable return from the wine and the ephedra, which will survive China's entry into the World Trade Organisation because these are products special to Ningxia.'  The Ningxia region is one of the mainland's poorest, with 5.34 million people, of whom 73 per cent live in villages with an average annual income of about 1,400 yuan (about HK$1,309).

 Of the land, 24 per cent is desert.

 Guangxia was founded in 1984 by Yinchuan's Chen Chuan, who gave up his work as a playwright to go into business in Shenzhen making computer software.

 With competition growing in the software field, Mr Chen decided to diversify.

 On a train to Beijing, Mr Chen by chance met an irrigation specialist.

 He convinced Mr Chen that the arid soil near Yinchuan, watered by the Yellow River, was suitable for growing it and that this would block the advance of the desert because it binds the soil. He argued it was commercially viable because it could be exported or sold to the 30 mainland processing factories which had closed for lack of raw material.

 This was because ephedra had in the past not been grown commercially but picked in the wild by peasants who pulled out the roots, preventing new growth.

 'Chen believed in science and wanted to do something for Yinchuan,' said Wei Deyuan, company vice-president.

 'If something is not done to stop the desert, it will kill the city. Others were suspicious. If there had been a vote, it would not have been approved. But he went ahead.'  From 1995, Mr Chen invested 80 million yuan in planting 1,300 hectares with ephedra and trees 12 kilometres from Yinchuan.

 It took three years and the results are impressive - neat rows of the plant stretching into the distance like soldiers on parade. The wind is as strong as before but the air is clear of sand.

 The farm produced its first crop last year, some 1,400 tonnes that sits in neat piles on the edge of the desert waiting to go the factory, with the dogs standing guard.

 The target is to produce 3,000 tonnes this year and 20,000 by 2003, exporting half to the US, at a price of 560,000 yuan a tonne.

 Mr Wei said the factory would need a licence from the drug control authorities and Public Security Bureau (PSB) because ephedra can be used to make ice.

 He added with a smile: 'Maybe it would be better to take the PSB as a shareholder.'  A little further into the desert are the 5,300 hectares the company has leased to grow grapes. Using the same laborious process, it cleared the desert and laid out rows of seedlings imported from the Bordeaux region of France. It has planted a third of the area so far.

 It has invested 70 million yuan in a plant to produce 15,000 tonnes of wine a year.

 'The wine and the ephedra will give us a better return than a nightclub or an Internet company,' Mr Zhang said.

 For Guangxia, whose other interests include real estate, hotels, coal and car sales, it is a gamble.

 It must both keep the desert at bay and persuade consumers to drink its wine and not the foreign brands that will become cheaper after entry into WTO.

 But the story has a tragic ending, because Mr Chen, the man who started all this as the founder of Guangxia, died suddenly on February 14 in Beijing of a heart attack brought on by exhaustion. He was aged 61.

 His ashes are buried in the land outside Yinchuan where the ephedra is growing. It was the place which meant the most to him.



Desert may yield fertile profits