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Tapping into int'l flower market

10-03-2010 12:54 BJT

Producer of China roses

The Chinese entrepreneur we'll introduce today, is a producer of China roses. He registered China's first trademark in the flower industry. He wasn't just content to sell flowers within China, but cast his eye on the global market. In order to raise the quality of his products, he was intent on sparing no costs.

On the screen behind me are two China Rose seedlings. They look pretty much the same, but their prices are worlds apart. The first one was imported from France, and costs 50 yuan. The second was cultivated domestically and costs less than 10 yuan.

The owner of the more expensive seedling is Yang Yuyong, Chairman of Kunming Yang Chinese Rose Gardening. It may sound strange, but Yang imports over 20 varieties of China roses from France. His company is based in Yunnan, a province renowned in China for its flower production. Inexpensive rose seedlings can be bought everywhere in Yunnan.

This is China's famous Dounan flower market in Kunming. All the business here is done during the early morning. At 2 a.m. every day, tens of thousands of trucks gather in the market amid a sea of flowers. While most people are asleep, many transactions have already been finalized. By the time morning breaks, all the fresh flowers have been loaded onto planes, and are well on their way to different corners of the country.

So why did Yang bother to go all the way to France to buy seedlings, at a price many times higher than what he would pay in Yunnan?

Yang cultivated tens of thousands of roses with the seedlings imported from France. For each plant, he paid some 50 yuan to the French company. Yang's total outlay for the young plants reached 2 million U.S. dollars. Because of this, Yang Yuyong became a laughingstock among the local flower growers.

Yunnan’s flower industry started in the mid 1980s. Over the past 20 years, local flower growers have become adept at horticultural practices. They cultivate and breed various imported flowers and seedlings. They only need to make an initial investment, and can continue to make a profit without having to pay for subsequent plants.

Then what was Yang Yuyong’s reason for importing flower seedlings at such high prices?  By paying the licensing fee and legally cultivating the plants, he could export them and sell them on the international market at a favourable price.

Why domestically-produced flowers not as beautiful as imported

Some people might wonder: are domestically-produced flowers not as beautiful as imported species? Why can't they be exported?

Domestic species of flowers can only be sold on the Chinese market. Take DVDs as an example. If you buy a copyrighted DVD, you are allowed to make a copy of it for personal use. But it would be illegal to sell that copy to someone else. Yang Yuyong purchases his seedlings at a price that includes the right to breed them, and resell the offspring. Each flower sold by his company is labeled with a trademark indicating the authorized cultivation of the species, and further cultivation is prohibited.

Back in 1961, the International Convention for the Protection of New Varieties of Plants was jointly signed by Belgium, France, Germany, Italy and the Netherlands. 63 more countries have become part of the Convention since then. The Convention provides international recognition of the intellectual property rights of plant breeders. Anyone propagating or selling a protected plant, is required to pay a licensing fee to the plant's breeder.

China also became a member of the Convention in 1999. But most of the domestic flower industry wasn't involved in international business at the time, and didn't appreciate the importance of the Convention. When China entered the WTO in 2001, many domestic flower growers suddenly found their flowers weren't qualified for export.