Local Economies Example: Pingshang Bamboo Group

Liudi Wang

Bamboo forests in the central and north China contribute significantly to the supply of bamboo products for both of the residents and export. Bamboo forests and product are the most important source of revenue in many regions. Pingshang, Guizhou province, China is one of the bamboo growing and producing regions.

In 2004, 354 people from 72 families were living in Pingshang village, and all of them are from the Miao ethnic group. The village has an average annual household income approximately $50 (400 CNY), and derived almost exclusively from the sale of forest products.

Pingshang village had a traditional producing system for decades. The main products that Pingshang Village made are rough, unfinished chopsticks and whole bamboo culms. The chopsticks were in basic quality and need further processing, and they were packaged in bulk. The unfinished chopsticks were sold with a very low price, US$0.25 for 10 pairs. The sales channel and transportation are also big problems to the village: the products were collected irregularly, and were taken down the mountains by walk to buyers. Because of information asymmetries, the buyers often took advantage from the villagers. As the rough bamboo product has such a cheap price, the way that villagers make a living is increasing the amount of harvest. This action led to damage of both ecological balance and natural resource.

 

In July 2004, Pingshang Bamboo Group (PBG) was established. It is a community producers’ group that owned by the residents of the village. The process of establishing PBG emphasized “local knowledge and enabled local inhabitants to analyze production possibilities and make more informed decisions about the direction of the community enterprise”. In most areas in China, commercial interests are still controlled by village governments, however, Pingshang village committee along with PBG figured out a way to form a separate management committee to act as director for PBG.

In the village, 50 of 72 families have two or three family members working on the basis for the group. PBG actually changed the economic relationships between residents and consociated them with the same goal. According to the small-mart revolution, it perhaps the most important benefit of spreading LOIS business.

After the formation of PBG, Pingshang village replaced the old production chain with a new system, which allowed the village to produce packaged chopsticks for immediate use. PBG is involved in all aspects of the whole production chain, including “forest management, harvesting, production, packaging, marketing, and delivery”. PBG helped arise the price to US$0.56 (3.5 CNY to 4.5 CNY) per 10 pairs. In this process, with a more sophisticate technic, they improved their product so that enhanced their self-reliance. It is unnecessary to rely on the third party to finish the product, which brought more profit to the village.

PBG has led a significant improvement in the village, which helps the village take the first step: be self-reliant and exporter. However, the village still lack of diversity product to support them to compete globally.

The traditional forest sector is restricted by several policies, including the “log-harvesting quota, the logging ban (a component of the Natural Forest Protection Program – NFPP), high rates of taxation, tenure and rights insecurities, and transportation restrictions”. Since the sustainability of existing bamboo number and species are the primary forest management objective, the rules are even stricter. PBG attracted people’s attention to the sustainable development of natural sources. On one hand, the introduction of new system made the production process more efficient so that reduce the overexploitation of natural resource. On the other hand, PBG rationally planned the use of bamboo, and tried to develop other products so that take use of every part of the bamboo as well.

In this case, rich natural resource laid a solid foundation for the development of Pingshang village. However, the resource of bamboo is the only advantage of Pingshang village. The village is geographically isolated from the county capital, and the mountainous terrain is not suitable for developing agriculture.

Although many villages like Pingshang exist in China currently, they are still struggling with finding an efficient way to maximize the use of limited natural resource, and promote their products as well. However, community groups are still rare in China. Besides the two requirements mentioned in the article, the awareness of residents is also important for the formation of community groups. Many residents don’t trust new technic, and the only resource in their common is too valuable for them to take a risk.

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One thought on “Local Economies Example: Pingshang Bamboo Group

  1. tlhill2012 November 2, 2012 at 12:18 AM Reply

    Liudi – thanks for this interesting post. It looks like your source was from rights and resources: http://www.rightsandresources.org/documents/files/doc_284.pdf. Is this it? Please do remember to provide sources.

    Reading this, I was reminded of Worawan’s example of the crabs, and had the same kinds of questions. How did this start? And especially, how did the PBG get around the usual control by village government? Is their independence a harbinger of a new kind of model, or just an exception to the rule?

    I’ve read some academic articles that suggest that there is a small but growing trend in China toward firms that mix government protection/permission/access to capital with small group or family control/entrepreneurship and management. Thoughts?

    Finally, what is the role of the foreign donors in PBG’s success, and how does the governance work? That is, who has rights to initiate new ideas and investment? To veto?

    There’s so much we could learn from such an example!

    TL

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