Story

The Rise of The 'Iowa Mafia' In China, From a Governor To Xi's 'Old Friends'

screen_shot_2017-11-10_at_11.28.21_am.png

Gary Dvorchak, a Muscatine native who now lives and works in Beijing, China, gives a presentation during a seminar on modern farm construction Saturday, Sept. 23, 2017, in Luanping County, Hebei, China. The seminar was held following the groundbreaking of the China-US Demonstration Farm. Image by Kelsey Kremer. China, 2017.

Gary Dvorchak, a Muscatine native who now lives and works in Beijing, China, gives a presentation during a seminar on modern farm construction Saturday, Sept. 23, 2017, in Luanping County, Hebei, China. The seminar was held following the groundbreaking of the China-US Demonstration Farm. Image by Kelsey Kremer. China, 2017. 

Third in a series examing Iowa's growing connection and influence with China. Read the project in "Iowa in the Heart of China."

BEIJING, China — Several years before Ambassador Terry Branstad moved from his native Iowa landscape of corn to a country replete with dumplings and tofu, a man named Gary Dvorchak followed a similar path to Beijing.

Like Branstad, Dvorchak's new job was made possible in part by his decades-old connections to Chinese President Xi Jinping. 

Dvorchak, 53, helps Chinese companies listed on the U.S. stock market do business in the United States.

He grew up in Muscatine, one of many Iowa cities that welcomed Xi in 1985 on his first visit to America as the leader of a food processing delegation from Hebei Province, Iowa’s sister state.

INTERACTIVE MAP: See the many places Iowa culture influences Chinese culture

WATCH: Follow our journey through China on our new Facebook Watch page

Branstad and Xi first met on that same trip.    

“You know the story about (how) Xi Jinping went to Iowa and stayed with a family?” Dvorchak sometimes says while networking in China. “Well, guess what? That was my hometown, my house and my bedroom he stayed in.”

Dvorchak was away at college that spring as his parents and sister played host to a man nobody — including Xi himself — could be sure one day would ascend to such power that his “Xi Jinping Thought” would be written into his country’s constitution.

Dvorchak remained mostly oblivious to China until Xi’s ballyhooed return to Iowa five years ago. Then in 2013, his company, the Blueshirt Group, had an opening for a senior staffer in Beijing. 

His family history with Xi lent Dvorchak what the Chinese call “guanxi": a unique and authentic personal network of relationships. The connection doesn’t win business, he said, but can open doors to set up the sales pitch.

"What Americans don't appreciate — I didn't until I moved here — is how important and well known and famous the story is," Dvorchak said. 

Just ask Colm Rafferty, who grew up not in Iowa but on a horse farm in Connecticut as the son of Irish immigrants. He joined Alibaba in August 2000 as only its 120th employee.

Today the Chinese e-commerce company is the world’s sixth-largest retailer, and Rafferty could coast on his early investment. Also, his wife hails from a Hong Kong family that founded the Bank of East Asia. 

screen_shot_2017-11-10_at_11.28.43_am.png

Gary Dvorchak, a Muscatine native who now lives and works in Beijing, China, gives a presentation during a seminar on modern farm construction Saturday, Sept. 23, 2017, in Luanping County, Hebei, China. Dvorchak's career landed in China after Xi Jinping became president because Xi slept in Dvorchak's bedroom at his parents' home in Muscatine when Xi visited Iowa in 1985. Image by Kelsey Kremer. China, 2017.

Gary Dvorchak, a Muscatine native who now lives and works in Beijing, China, gives a presentation during a seminar on modern farm construction Saturday, Sept. 23, 2017, in Luanping County, Hebei, China. Dvorchak's career landed in China after Xi Jinping became president because Xi slept in Dvorchak's bedroom at his parents' home in Muscatine when Xi visited Iowa in 1985. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.29.14_am.png

Kit Spangler is a native Iowan and former dairy farmer who is now director of China key accounts for Diamond V. Spangler speaks fluent Mandarin and has traveled from the Midwest to China extensively for work and as a member of the Iowa Sister States organization. Image by Kelsey Kremer. China, 2017.

Kit Spangler is a native Iowan and former dairy farmer who is now director of China key accounts for Diamond V. Spangler speaks fluent Mandarin and has traveled from the Midwest to China extensively for work and as a member of the Iowa Sister States organization. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.29.30_am.png

Gary Dvorchak, left, a Muscatine native who now lives and works in Beijing, China, and Terry Branstad, U.S. ambassador to China, attend the groundbreaking of the China-U.S. Demonstration Farm on Saturday, Sept. 23, 2017, in Luanping County, Hebei. Image by Kelsey Kremer. China, 2017.

Gary Dvorchak, left, a Muscatine native who now lives and works in Beijing, China, and Terry Branstad, U.S. ambassador to China, attend the groundbreaking of the China-U.S. Demonstration Farm on Saturday, Sept. 23, 2017, in Luanping County, Hebei. Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.29.43_am.png

Colm Rafferty, vice president of the Asia Pacific Region for Vermeer and vice chairman of the American Chamber of Commerce in China, has lived and worked in China for the past 15 years. Image by Kelsey Kremer. China, 2017.

Colm Rafferty, vice president of the Asia Pacific Region for Vermeer and vice chairman of the American Chamber of Commerce in China, has lived and worked in China for the past 15 years. Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.29.56_am.png

Vermeer, a company based in Pella, Iowa, is also doing international business and manufacturing some of its products in China. Image by Kelsey Kremer. China, 2017.

Vermeer, a company based in Pella, Iowa, is also doing international business and manufacturing some of its products in China. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.30.09_am.png

Terry Branstad, U.S. ambassador to China, gives a short speech during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China, gives a short speech during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.30.24_am.png

Iowans visiting and living in China attend a reception hosted by the Iowa Sister States organization on Wednesday, Sept. 20, 2017, in Beijing, China.  Image by Kelsey Kremer. China, 2017.

Iowans visiting and living in China attend a reception hosted by the Iowa Sister States organization on Wednesday, Sept. 20, 2017, in Beijing, China.  Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.30.42_am.png

Iowa and China representatives break ground for the China-US Demonstration Farm on Saturday, Sept. 23, 2017, in Luanping County, Hebei, China.  Image by Kelsey Kremer. China, 2017.

Iowa and China representatives break ground for the China-US Demonstration Farm on Saturday, Sept. 23, 2017, in Luanping County, Hebei, China.  Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.30.52_am.png

U.S. Ambassador to China Terry Branstad and his family pose for a photo on the China-U.S. Demonstration Farm during its groundbreaking ceremony on Saturday, Sept. 23, 2017, in Luanping County, Hebei, China. Image by Kelsey Kremer. China, 2017.

U.S. Ambassador to China Terry Branstad and his family pose for a photo on the China-U.S. Demonstration Farm during its groundbreaking ceremony on Saturday, Sept. 23, 2017, in Luanping County, Hebei, China. Image by Kelsey Kremer. China, 2017.

Rafferty is vice chairman of the American Chamber of Commerce in China, which represents some 1,000 businesses. He became an honorary Iowan through his role as vice president of the Asia Pacific region for Pella-based industrial equipment manufacturer Vermeer.

"There's kind of a joke in the Beijing community: We call it the 'Iowa mafia,'" Rafferty said. "There's a tightly knit Iowa community here in Beijing, and in other cities in China that from time to time kind of come through and we meet up."

If few people outside China appreciate the renown of Xi’s Iowa ties, fewer still probably wield a true understanding of how "the Iowa mafia" emerged through a combination of steady work and sheer luck. 

Branstad wasn’t the genesis. It was his predecessor. 

Ray trip to a rawer China

At a hotel reception last month in Beijing, Branstad stood in front of a room of about 50 Iowans, or emissaries for Iowa companies. 

“I want to give Gov. Bob Ray some credit,” Branstad said, “because he came to China before me.”

Ray and his wife, Billie, first traveled to China in May 1974. They were among a delegation of six U.S. governors, following in the footsteps of President Richard Nixon, who two years earlier met with Chairman Mao.

It was a radically different era. China’s relatively primitive economy was just reopening to the world, but the nation's governors already were eager to explore a fresh market for their manufacturers.

Ray, meanwhile, was a Republican willing to commit not only to international trade and culture but also the humanitarian cause of Southeast Asian refugees whom he implored Iowans to embrace.

Ray returned to China in October 1979. The next year, a delegation of Chinese officials, led by Xi Zhongxun, visited Iowa. 

This was the elder Xi, then the governor of the economically progressive Guangdong Province, in southern China next door to Hong Kong.

 

He had worked his way up the party to the rank of vice premier but was purged in 1962, which also detoured his princeling son into the hinterlands for years of hardship. 

Xi Zhongxun, restored to government office in 1977, became a prime instigator of the Iowa-China relationship.

Meanwhile, Ray’s vision of international citizen diplomacy through a nonprofit Iowa Sister States organization took formal shape under Branstad. A sister-state partnership was forged with China’s Hebei Province in 1983.

The next year, Branstad led a delegation of 50 Iowans to China. 

Iowa during that foray established an official footprint in Asia, opening an economic development office in Hong Kong staffed by its inaugural employee in the region, a man named Jimmy Chu.

The gregarious Chu, born in Shanghai and raised in Hong Kong, came to Iowa in the 1970s through Simpson College in Indianola. In the 1980s, he was trying to help establish a Chinese canned food factory in Iowa when he veered into the overseas development job.

“China at that time was very, very Wild West,” said Chu, 66, who still lives in Hong Kong.

Illinois was the first state to open a trade office in China, in 1974. Resumption of U.S.-China diplomatic relations in 1979 boosted such activity. 

The now-historic 1985 Xi visit to Iowa at the time was just one of many examples of how the two cultures ever so gradually intertwined at a grassroots level. 

An Iowa dairy farmer, Kit Spangler, first trekked to China in 1990.

He studied Chinese language and history at the University of Iowa as a hedge against the instability of farming, which had rocked him in the form of a 1980s drought.

He accompanied Branstad and a delegation in 1993 to Hebei and witnessed the work that he refers to as "common people kind of doing uncommon things."

Spangler has since staked his career on China, traveling there regularly as an ag businessman fluent in Mandarin who works for the livestock nutrition firm Diamond V as its director of key accounts in the country.

“I always tell people I have what I call my 180-degree rule,” he said. “However I look at something, I flip it 180 degrees, and that's probably how the Chinese are looking at it.”

Spangler gave the example of the Chinese concept of “jia,” as in the family or collective. 

“That has precedence over the individual,” he said. “So you're part of the group first, and then the individual is second. So, again that's almost 180 degrees from where we are.”

screen_shot_2017-11-10_at_11.52.35_am.png

Terry Branstad, U.S. ambassador to China, with his wife Chris, speak with guests during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China, with his wife Chris, speak with guests during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.52.48_am.png

Terry Branstad, U.S. ambassador to China and his wife Chris Branstad leave the St. Regis hotel after an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. They walked home to their embassy residence, only a few blocks away, after the reception. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China and his wife Chris Branstad leave the St. Regis hotel after an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. They walked home to their embassy residence, only a few blocks away, after the reception. Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.52.59_am.png

Terry Branstad, U.S. ambassador to China gives a short speech during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China gives a short speech during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.53.11_am.png

Terry Branstad, U.S. ambassador to China, wears an American beef lapel pin during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. He spoke on Wednesday about American beef being allowed back in China, for the first time in 14 years, the at the start of his tenure as ambassador. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China, wears an American beef lapel pin during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. He spoke on Wednesday about American beef being allowed back in China, for the first time in 14 years, the at the start of his tenure as ambassador. Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.53.20_am.png

Kim Heidemann, executive director, of Iowa Sister States poses for a photo with Terry Branstad, U.S. ambassador to China and his wife Chris Branstad during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Kim Heidemann, executive director, of Iowa Sister States poses for a photo with Terry Branstad, U.S. ambassador to China and his wife Chris Branstad during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017. 

screen_shot_2017-11-10_at_11.53.36_am.png

Aaron Hermsen, director of business development for the China Iowa Group gives a bottle of Jasper Winery wine to Terry Branstad, U.S. ambassador to China, during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. The wine, with a special Iowa, China label is the same kind that was severed during the state dinner held when China's president Xi Jinping visited Iowa in 2012. Image by Kelsey Kremer. China, 2017.

Aaron Hermsen, director of business development for the China Iowa Group gives a bottle of Jasper Winery wine to Terry Branstad, U.S. ambassador to China, during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. The wine, with a special Iowa, China label is the same kind that was severed during the state dinner held when China's president Xi Jinping visited Iowa in 2012. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.53.55_am.png

Aaron Hermsen, director of business development for the China Iowa Group gives a bottle of Jasper Winery wine to Terry Branstad, U.S. ambassador to China, during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. The wine, with a special Iowa, China label is the same kind that was severed during the state dinner held when China's president Xi Jinping visited Iowa in 2012. Image by Kelsey Kremer. China, 2017.

Aaron Hermsen, director of business development for the China Iowa Group gives a bottle of Jasper Winery wine to Terry Branstad, U.S. ambassador to China, during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. The wine, with a special Iowa, China label is the same kind that was severed during the state dinner held when China's president Xi Jinping visited Iowa in 2012. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.54.14_am.png

Terry Branstad, U.S. ambassador to China, with his wife Chris Branstad attend a reception hosted by the Iowa Sister States organization on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China, with his wife Chris Branstad attend a reception hosted by the Iowa Sister States organization on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.54.36_am.png

Terry Branstad, U.S. ambassador to China, and his wife, Chris Branstad say hello to Rick Kimberley, a corn and soy bean farmer from Iowa, during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. A groundbreaking will be held this weekend for a replica of Kimberley's family farm being built in China. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China, and his wife, Chris Branstad say hello to Rick Kimberley, a corn and soy bean farmer from Iowa, during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. A groundbreaking will be held this weekend for a replica of Kimberley's family farm being built in China. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.55.05_am.png

Terry Branstad, U.S. ambassador to China poses for photos during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China poses for photos during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.55.19_am.png

Terry Branstad, U.S. ambassador to China, attends a reception hosted by the Iowa Sister States organization on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China, attends a reception hosted by the Iowa Sister States organization on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.55.41_am.png

Iowa Sister States hosts a reception for Iowans and people with ties to Iowa ahead of a groundbreaking for the US-China Friendship Demonstration Farm later in the week, on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Iowa Sister States hosts a reception for Iowans and people with ties to Iowa ahead of a groundbreaking for the US-China Friendship Demonstration Farm later in the week, on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.55.52_am.png

Terry Branstad, U.S. ambassador to China and his wife Chris Branstad leave the St. Regis hotel after an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. They walked home to their embassy residence, only a few blocks away, after the reception. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China and his wife Chris Branstad leave the St. Regis hotel after an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. They walked home to their embassy residence, only a few blocks away, after the reception. Image by Kelsey Kremer. China, 2017.

screen_shot_2017-11-10_at_11.57.02_am.png

Terry Branstad, U.S. ambassador to China gives a short speech during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

Terry Branstad, U.S. ambassador to China gives a short speech during an Iowa Sister States reception on Wednesday, Sept. 20, 2017, in Beijing, China. Image by Kelsey Kremer. China, 2017.

One incident changed so many lives

Modest citizen diplomacy by farmers and other Iowans evolved into a bigger business presence as companies such as John Deere, Pioneer, Principal and others migrated to China.

Iowa ended its contract with Chu in 2003 in a brief attempt to try more of a collective Midwest approach to marketing itself in the region.

But then a new contractor, John Clarke, began work in 2007 through his Phoenix Consulting firm.

For the last decade, he has worked through the Iowa Economic Development Authority to help Iowans vet Chinese companies, among an array of other services. (Last year Iowa also hired a second consultant based in Shanghai, Starr Cos., in a new bid to lure more Chinese investment to Iowa.) 

Between 1985 and 2012, it's not as if there was widespread recognition in Iowa of Xi's steady rise in the Communist Party.

The Wall Street Journal published a small story in 2007 that mentioned Xi’s 1985 introduction to the U.S. via the Hawkeye State. It also anticipated his ascension, speculating that Xi would “be a far more powerful leader than” his predecessor, Hu Jintao.

Some among Iowa’s Chinese-American community took note and began to research Xi's background. 

But it wasn’t until Branstad’s return to China in September 2011 that the modern era of the Iowa mafia began in earnest.

When the governor shook hands with Xi in Beijing, the then-vice president surprised him by rattling off the date of their original meeting in Des Moines: Monday, April 29, 1985. 

Thus began a new back-and-forth series of events between the Iowa Capitol and China's Great Hall of the People. 

The U.S. presidential election of 2016 led to Branstad’s appointment as ambassador, which “breathed new life into the whole story," Dvorchak said.

Now the Iowa mafia, with the rest of the American business community, waits expectantly to see if decades of relationship building can yield a payoff.

Rafferty and his colleagues see a "huge opportunity in the One Belt One Road initiative" championed by Xi in which China plans to spend billions of dollars on international infrastructure to develop modern trade routes. 

"Vermeer and other foreign enterprises in China that have invested significantly to build R and D, manufacturing capability, we would like to ensure that we are able to participate," Rafferty said.

Some China watchers are skeptical about whether Iowa has left any real imprint on Xi. But Dvorchak still is struck by a quiet dinner that he, his wife and daughters and parents shared with Xi and his family two years ago in Beijing.

"Here's one of the most powerful men on Earth, his time is incredibly valuable," Dvorchak said. "And yet he spends two hours with this family that did something for him 30 years ago that was so meaningful in his life, but he's not getting any political points out of it. ...

"So for him to give that valuable time for zero political payoff whatsoever, it told us that the feelings that he had, that the experience he had back then was genuine." 

“This one incident,” Dvorchak said, thinking back to 1985, “changed so many lives in a profound way.”