Adventures in Inner-Mongolia – Part 1

We’ve Arrived in Inner-Mongolia

I have not had a chance to blog since we arrived here.  The meetings started almost the moment we landed on Sunday.  Soon I will post pictures so everyone can see what it looks like here.  It probably looks about how you think.  It is an arid area that only receives five to ten inches of rain a year and the climate is similar to North Dakota. The natural resources are what makes this such an interesting place.  In the photo which was mocked up before I left,  you can see on the left is Inner-Mongolia and on the right is North Dakota. And Inner-Mongolia is one of the wealthiest places in China.   More about that later.

 Eric Hardmeyer, Carol Dewing and I arrived on Sunday morning about 11:00 a.m. and had our first meeting with eight energy companies at 3:00 that afternoon.  After 20+ hours on an airplane and limited sleep, our main goal was to not create any international incidents. Our host, Mr. Wong, who is the economic development director for the Ordos region wanted to make sure we got the most out of our trip.  The people here are similar to North Dakotans;  They work hard, think about how to make the future better for their kids and are very genuine. I think this is a good match for our community and state.  

 Our First Meeting  

So, as we got off the plane, Mr. Wong mentioned we would have an introductory meeting.  Instead of just a few government officials, he invited eight energy companies to join us.  Hmmmm.   Meetings in China are very formal.  The delegations sit at a rectangular table facing each other.  The most senior person sits in the middle of the table and then line up by seniority on either side.  Formal remarks are expected at the beginning of the meeting from the leaders.  Next up are presentations and then question and answer periods.  Fortunately, we had put together a short PowerPoint about North Dakota so we were prepared. 

 What I really enjoyed about meetings with the Chinese people is that they are very direct and get right to it in business meetings.  After our formal presentations, the first question from Mr. Wang with the Ordos Company was, “Mr. Hullet, I appreciate your delegation coming all this way.  How is it the Ordos Company can help North Dakota?  Do your companies want to invest here?  Would you like us to invest in North Dakota? How can we work together?”  That makes for an easy starting point.  

Thinking Big in Ordos!

As I mentioned before, we received a presentation on Ordos in our first meeting.  What struck us is how “BIG” the leadership of Ordos is thinking.  You can literally feel the momentum in China.  Even in this rural region 1,000 miles from Beijing it is palpable. It is not about developing one coal to liquid fuel (CLT) plant or finding one new way to integrate resources.  It is about how to do it all.  The business and community leaders have made a visionary decision that Ordos will be THE coal chemistry center of the world.  And, it is not just talk.  They are walking the walk.  For instance, the Shenhua companies CTL plant that we visited yesterday is the first of many to be built-in this region.  They plan on investing over $12 billion into these types of plants as part of their ”fuel replacement strategy.”

They made a conscious decision to build a new commerce district for Ordos.  It’s basically an entire new city for 300,000 people.  And, again, it is not just talk.  Construction was started  in 2006 and is about half completed.  As we took the tour of the ”district,” Eric and Carroll commented on how overwhelming it is to comprehend what they are undertaking.  The new community includes everything from a business district to houses and apartments and even a new college, which already has 1,000 students enrolled. When asked what would happen if no one choose to move to new Ordos, the answer was that failure was not an option.  They expect it to be a fully functioning city within a decade.

 This kind of thinking is a bit hard to grasp. However, it is imperative that we take a page from this book and remember how to dream big. I get caught in the same trap.  We think about next week, next month or the next election. What strikes me is that if we are going to leave a legacy to our kids and grandkids, we must start thinking about the next 25 to 50 years in a constructive way. 

 A Visit with Genghis Kahn

As with America, to understand China, you must become familiar with the culture.  Mr. Wong carved out two hours yesterday afternoon to visit the Genghis Kahn mausoleum.  Genghis Kahn is revered in China because he reunited the country and his ancestors ruled for centuries.  What we did not know when we went for this visit was that we have our own history expert in Carroll Dewing.  If you don’t know Carroll, he is walking google search engine.  And, he has read approximately 17 books on Genghis.  You gotta love it when your one of your own is telling the tour guides stuff they didn’t know. 

 A couple interesting points.  First, there are eight tents in the museum.  These tents are 783 years old.  One tent holds his bow and clothing and another holds the possessions of his wives. Still another has a library of names of the descendents of his family. To this day, a son or grandson from his family guard the mausoleum.  (They follow you through…kinda like the secret service.)

 These descendents are also responsible for one other thing.  A candle was lighted 783 years ago at the death of Genghis Kahn.  That flame hasn’t gone out  in seven centuries.  The United State’s constitution is 234 years old.  This flame was lit over 500 years or five centuries before America became the United States.  Gives a little perspective to long-term planning.

The Wrong Bill for North Dakota

In North Dakota, the business community is committed to finding solutions to the pressing issues of health care cost and access.  Unfortunately, while Congress seems ready to vote on some health care reform package, no one is certain what is in, or out, of the final bill.  In fact, no one is really sure if Congress will actually vote on the bill or just “deem it passed” under a technical rule while voting on amendments through budget reconciliation.   We commend our delegation for their efforts to move health reform forward.  However, based on the Senate bill, which we think is what will be voted on, we must express our concern and opposition to what could be passed.

 There are some good things in the Senate bill.  A significant number of the uninsured will get insurance coverage.  Lower income people and some small businesses will receive subsidies to help them buy insurance.  North Dakotans will get a new electronic marketplace to help them choose coverage.  In addition, health insurance companies will not require medical questions before issuing coverage.  These are good things, which we support, but they are offset by a host of bad things that are in the Senate bill. 

 The final bill may or may not include additional Medicare payments for hospitals and physicians in North Dakota.  In North Dakota, this is a big issue as our health care providers are reimbursed at a lower rate than other parts of the nation…for the same procedures.  Our concern is that even if our hospitals receive more reimbursement, it may not be enough to pay North Dakota health care providers the actual cost of providing care to Medicare payments and it will be offset by future Medicare cuts in the bill.  Hospitals will still lose money on Medicare patients and our private insurers and businesses will still be asked to pick up the difference. 

Health insurance will be more expensive for everyone who doesn’t get a subsidy.  The Senate bill includes $70 billion in new taxes on health insurance.  These taxes will be passed on to North Dakotans through higher premiums as there is just no way around it.  The bill also puts taxes on drugs and medical equipment.  The Senate bill requires higher benefits than North Dakotans are currently buying and it limits the benefit choices that will be available to those who receive subsidies.  Restrictions on age rating will require our major health care insurer, Blue Cross Blue Shield, to dramatically raise premiums for young people, further reducing reasons for young people to stay in the state.  Finally, while the bill requires individuals to have insurance, the penalties are weak.  We believe that many North Dakotans who have insurance will drop it rather than pay the higher premiums.  This will raise costs for everyone still covered. 

 The Congressional Budget Office says that the Senate bill will reduce the deficit.  The CBO estimates rely on 10 years of taxes to pay for six years of benefits and future cuts to Medicare that may or may not happen.  Congress has ignored prior laws requiring cost cuts in Medicare.  Current law requires deep cuts in physician payments in order to make up for the cuts that were avoided in past years.  Congress wants to change the law to avoid these cuts, but the cost of changing this law is not included in the health reform estimates.  If it were, health reform would substantially add to the deficit.  Covering all Americans will add to the deficit and we will pay for it with taxes.  Pretending otherwise is merely politics as usual. 

 The Senate bill does nothing to control health care costs.  President Obama wants Congress to add a new federal bureaucracy to control health insurance prices.  Controlling health insurance prices does not control health costs.  In the end, this goes back to a basic principle of personal responsibility.

 We can do better than this bill.  If our Congressional delegation does the right thing for North Dakota and votes against this bill, the business community pledges to ask Blue Cross Blue Shield, the leaders in the legislature, hospitals, physicians, business and our communities to craft a proposal for health reform for North Dakota.  We can get everyone covered with a North Dakota solution that will work better than a 2,000 page bill.  Contrary to what Nancy Pelosi said, we should really understand what is in this bill before it passes.  Not try to figure it out after the “fog of debate.”