Town Loses Hyperlink to Future

YELLOW SHEEP RIVER, China —  This village on the edge of the Gobi desert entered the 21st century much as it had the previous one, with yellow sand blanketing the mountains and poor farmers sharing their mud huts with cows, donkeys and pigs.

No homes had running water. No shops sold clothes, just bundles of fabric to be sewn into shirts and pants. Donkey carts plied the dusty main street, rarely troubled by the rumble of a motor.

No one in this forgotten section of northwestern China seemed to realize that the nation’s east coast was booming or that dot-coms were changing the world. But then, out of the blue, came an idea -- and a multimillionaire -- that promised to bring prosperity here.

High-tech entrepreneur Sayling Wen heard about the village and decided that by harnessing the power of computers, he could beam its 30,000 inhabitants into the Information Age economy.

Never mind that the Taiwanese tycoon had never laid eyes on the place. He would turn Yellow Sheep River into China’s first “Internet village.”

“The plan seemed unthinkable, like jade falling from the sky,” said local Communist Party secretary Zhang Xusheng.

Wen donated 100 new computers and arranged for teachers to be trained. He believed that by teaching computer basics to schoolkids, he could quickly develop a labor force to perform simple tasks for Western high-tech firms looking to outsource work.

Next he began building a $50-million, 140-room hotel and convention center in the village, with high-speed Internet connections, state-of-the-art meeting rooms, swimming pool, sauna and even a stable for horse- and camel-back riding.

Wen planned to have villagers staff the hotel, and would invite tech-savvy workers from China’s east to train others. High-tech executives could use it as an exotic conference locale, and meet Yellow Sheep River’s labor pool. The project would spawn more development.

Just as things were looking up, Wen dropped dead.

Now the people of Yellow Sheep River are at a crossroads, unsure how to move forward without their visionary leader, unwilling to go back to their old way of life.

“Just like Mr. Wen used to say, we are a bunch of lonely soldiers,” said Chen Ming, the hotel’s manager. “All we can do now is press on.”

*

Perhaps in Yellow Sheep River, Wen saw something of his own beginnings. Or maybe just a chance to make money.

The son of a poor Taiwanese family, he did his homework by the light of an oil lamp. He landed a spot at the prestigious National University of Taiwan, then started his own business and became a Bill Gates-like figure in his homeland.

His company, Inventec, makes notebook computers, digital cameras and iPods -- devices until recently unimaginable in Yellow Sheep River, 700 miles west of Beijing in Gansu province, one of China’s poorest.

As China welcomed foreign investment in recent decades and became the world’s factory, development concentrated on the east coast. In Yellow Sheep River, the average income is $120 a year, a 10th of what east coast city dwellers make.

Five years ago, amid growing concern that the gap could spark social unrest, officials in Beijing launched a “Go West” campaign to modernize Gansu and 11 other provinces. But the primary focus has been on huge infrastructure projects such as a west-to-east natural gas pipeline.

Still, many experts say it could take 50 to 100 years for the region to catch up to the east.

Through a chance encounter at a college reunion in late 2000, Wen heard about Yellow Sheep River and wondered whether he could cut the timetable to 10 years. If the tactic worked there, he planned to replicate it a thousand times throughout the impoverished west.

He set up a company, Town & Talent Technologies, and deputized Kenny Lin -- his friend and college classmate who first told him about the place -- to run it.

*

Lin, 58, a mild-mannered Christian, was so overwhelmed by the poverty and deprivation during his first encounter with Yellow Sheep River students that he fought his speechlessness by teaching them to sing “Hallelujah to the Lord.”

Lin was working for one of Wen’s subsidiaries in the eastern city of Tianjin and had heard about the village from a former employee who was volunteering as a teacher there. In October 2000, Lin decided to visit.

The middle school, he recalled, was dark and gloomy. There was no library, no music room, no cafeteria. Lunch consisted of hard bread dipped in cold water. Many youngsters dropped out before the seventh grade. The World Wide Web might as well have been in another solar system.

He had 11 old computers sent in.

The students quickly became comfortable with the mysterious machines the Chinese call dian nao, or electronic brains. Within two months, the school had set up its own website, yellowsheepriver.com, and students sent e-mails to Lin, thanking him for the devices.

“I saw a computer for the first time here,” said Zheng Haoju, a shy 17-year-old girl. “I like to use it to draw.”

Lin decided to ship another dozen computers, and offered the school $300 a month of his own money to ensure that students got three hot meals a week. By this time, the youngsters were designing Web pages describing the history, cultural heritage and natural resources of their village.

Wang Junyi, 52, who owns a mom-and-pop grocery store across the street, noticed more students coming to school. “A lot of young people here have nothing to do. Many quit school and just stay home,” he said. “Computers opened their minds.”

Soon, the school opened a public Internet cafe and allowed farmers to join computer classes. With the help of the teachers, they checked out prices for fresh produce in the country and around the world. Some wanted to know how much the latest tractor cost and where to buy the best fertilizers and seeds.

At one point, when there was a bit of a surplus harvest, the farmers decided to experiment with some e-commerce. Selling online, they made about $9,200 from peas, $2,600 from medicinal herbs and $800 from celery.

Once Lin got Wen interested in Yellow Sheep River, the tycoon shipped in 100 additional computers, along with software to train the students in typing and English. Enrollment doubled in a year to 600 students, Lin said.

*

But the real giddiness set in when Wen made his first visit in April 2002 to break ground for the hotel. As many as 10,000 farmers came to meet the miracle maker. Some walked more than 10 miles, others rode horses. The nimble climbed trees for a better view. The sound of drums and gongs filled the early spring air.

Wearing a dark suit and tie, the round-faced and solidly built Wen showed visiting Chinese officials a model of the hotel. He cut ribbons and helped shovel dirt. He posed for the cameras.

“I’m investing in Yellow Sheep River and building a five-star hotel and Internet village because I want to turn Yellow Sheep River into a knowledge-based economy fit for the 21st century,” Wen told the crowd. “My hope is that you no longer have to leave home to find work. As long as you come here to the Internet village, you can create wealth, you can change your life and you can preserve your traditional culture.”

For the poorly educated people here who find it hard to see past the next rainless day, Wen’s lofty plans were appealing.

Li Yuemei, 48, an illiterate peasant, helped mix cement for the hotel. Her husband and son worked on the construction site. They each made nearly $400.

“Everybody worked on the hotel,” Li said. “I wish the construction would last longer so we can earn more money.”

“It’s the first hotel I’ve ever seen,” said Yu Kaike, a 68-year-old villager who wore an old blue Mao jacket and oversize round spectacles. His wife’s bound feet also hearkened back to a bygone era.

“I’ve never left my home town before,” he said. “I am glad they built it. I wish people will come here and help make this place rich.”

Just as Wen predicted, the hotel project had something of a trailblazing effect.

The Chinese government took notice. It improved local roads and officially upgraded Yellow Sheep River from a village to a town, planting trees and encouraging tourism.

The government even put up a billboard on a main road to direct passing motorists to the “Internet Village.” A big gas station opened under the sign. Merchants came to build shops and homes. They brought small appliances, fresh fruit and clothing to sell, bolstering the town’s previously anemic commercial life.

As construction progressed, local youths began training for hotel jobs answering phones, checking audio systems, changing sheets and serving Western cuisine. They worked alongside the experienced chefs and managers brought in from big cities.

“With my background and level of education, it’s hard to find a good job in the big city,” said Zhao Xiaoping, 25, who with his high school diploma is considered one of the best-educated people in town. He was hired as a room service attendant. “Most of my schoolmates are away working as manual laborers.”

But in December 2003, before the hotel was complete, Wen suffered a stroke and died in Taiwan. He was 53.

Suddenly, the whole grand plan was thrown into doubt. Though Wen hadn’t been living in Yellow Sheep River, everyone knew his force of will was driving the ambitious project.

Hundreds of villagers turned up for a memorial service, despondent over losing their best hope to change their way of life.

*

For nearly a year, the hotel sat unfinished. The outer shell was built but the inside was without fixtures or even floors. Finally, Wen’s brothers chipped in the money to complete construction.

Early this year, it was ready for guests, but there was no grand opening, no parade of dignitaries, no influx of well-heeled conventioneers. The hotel has hosted a few Taiwanese tourist groups and conferences for Wen’s companies, but mostly it sits empty.

Many of the staff members from the big cities have left. Those who remain worry that their days are numbered. They kill time by splashing around in the pool and downing nearly expired beer from the stockroom. Equally vacant is the Internet cafe at the school.

“Catching up with the east in 10 years is a little difficult to do now,” said teacher Hu Wanglong, 30, sitting in the otherwise empty cafe. “Our economy is too backward. With Mr. Wen gone, our progress will definitely slow down.”

According to Hu, only 10 people have visited the cafe this year. The town’s website still advertises locally grown mushrooms, but Hu said they aren’t really selling anymore. The only thing that still attracts customers is a ginseng-like dried root used in traditional medicine. But it grows in tiny quantities and is hard to propagate on a large scale.

Hu tries to look on the bright side.

Before, his school had no computers and no one to teach about them. Now it has 140 desktops and 1,300 students, who are learning about Windows, Word, PowerPoint and search engines.

“Before, people here thought the computer was a high-tech machine far removed from their lives,” Hu said. “We helped demystify that concept. They now know the computer is no different from the TV or radio. It can be helpful to their everyday life.”

After the initial shock of Wen’s death, Lin is stepping out of the shadow of his former classmate to try to salvage the dream. But he knows he is essentially starting from scratch.

“Mr. Wen wrote himself into the original business model,” Lin said. “Our job now is to retain his old vision, redesign and refocus.”

Lin jettisoned anything that relied on Wen’s connections or cash. He spun off the hotel to a new company. He gave up on the idea of school-based global outsourcing. He is focusing on the village’s most abundant resource: cheap labor.

From his base in Tianjin, Lin is seeking jobs for western peasants at eastern restaurant chains, factories and hotels. He’s teaming up with local entrepreneurs in Gansu to recruit residents to fill the jobs he finds.

The entrepreneurs are setting up small “digital centers” with one or two computers, using the Internet to communicate with Lin and show job applicants video clips of prospective work sites, factory dormitories and cafeterias. They earn a commission for each job filled.

Feng Zhicai, 67, dropped into one of the centers looking for work for his 24-year-old grandson. Manager Gao Yanbin, 47, showed him a video about a shoe factory in southern Guangdong province to which 140 villagers have gone this year.

“I’ve never seen a computer before. Young people tell me it can do many things, like count money. I didn’t realize you can watch it like a TV,” he said.

So with the birth of the digital center, area residents are turning to the Internet again, though not in the way Wen imagined. Instead of using it to draw opportunity to Yellow Sheep River, they are using it to seek opportunities elsewhere.

“I hear the east coast needs at least 3 million workers a year. The west has that. And nobody is tapping into this. We can,” Lin said. “If we can plant 1,000 seeds, 10 years from now western China will definitely be a different place.”