Hezuo Cordyceps Market © Jo James

Hui Muslim traders gather in small groups to make deals and haggle over prices. Tibetan ladies sit on low stools, vigorously brushing dirt off their wares with wire wool. Middlemen and the occasional backpacker alike are enthusiastically approached with baskets full of little, dried things that look like Twiglets.

Temple Beautification Crew, Hezuo © Jo James

The town of Hezuo in Gansu is perched at 2,800 metres (9,460ft) above sea level on the eastern edge of China’s Qilian Mountains. Until recently, the town had just one street – bored taxi drivers would cruise up and down this scruffy strip all day shuttling between bus station and monastery. Today, however, change is afoot – tower blocks are sprouting across town, the monastery is being expanded and beautified, and the taxi drivers now have an exciting choice of three roads upon which to cruise.

Hezuo’s sudden vivification is due to two reasons. While the first is prosaic (2013 marks sixty years since the foundation of Gannan Prefecture – Hezuo is the prefectural seat – so the local government has decided to spruce up the town), the second is rather more intriguing. During daylight hours, the western side of the crossroads by the old bus station is home to a bustling street market. Only one commodity is sold – and this is the real secret behind Hezuo’s newfound affluence. Caterpillar fungus.

Cordyceps in Qinghai

Also known as Cordyceps sinensis (bit of a mouthful, as are the Tibetan – yartsa gunbu – and the Chinese – dōng chóng xià cǎo 冬虫夏草 – names), the first time I saw genuine caterpillar fungus I thought it was a caterpillar and a stick glued together, a bizarre fake like the Feejee Mermaid. But that was the real deal – the caterpillar larvae of the ghost moth live underground in high altitude regions. They feed on roots, where they are occasionally attacked by a parasitic fungus that kills the caterpillar and erupts in a stalk-like growth from the dead caterpillar’s head.

Why would anyone want a dried, dead caterpillar with a fungus growing from its head? A very good question. The answer is that, along with rhinoceros’ horns and tiger’s penises, caterpillar fungus is an ingredient of traditional Chinese medicine. Typically steeped in hot water or added to medicinal soups, the fungus is purported have aphrodisiac effects, as well as helping a range of conditions from cancer to tinnitus.

Caterpillar Fungus For Sale, Hezuo © Jo James

The caterpillar fungus is hand-collected and dried by nomads that live on the grasslands that cover the high, remote borders of Qinghai, Gansu, Sichuan and Tibet. The caterpillar and fungus only thrive between 3,000m and 5,000m (9,800-16,000ft) elevation, making it one of the few biological riches to be found in this oxygen-starved corner of the world.

The nomads sell their dried and earth-covered fungus to middlemen, mostly Hui Muslims, who converge on Hezuo’s impromptu wholesale market. Street prices range from RMB30-RMB60 for each caterpillar in Hezuo, increasing dramatically by the time the caterpillars reach the end consumers (wealthy urbanites in eastern China and further afield), retailing for over RMB1000 per gram in Hong Kong.

Caterpillar Cleaning, Hezuo © Jo James

While it’s easy to frown upon the way that the rapacious trade in Chinese medicinal ingredients has decimated populations of wild animals elsewhere, the trade in Cordyceps is more nuanced. The caterpillar must be killed by the fungus rather than by humans, and so we can’t have too much impact on the overall population of either species. The caterpillar fungus trade is also bringing money into communities that economic development has thus far eluded. As one Tibetan gentleman, the leader of a group of caterpillar collectors, put it, “Here, this is our only hope to make some money, this is our way forward.” Whatever the health benefits, it’s clear that trade in Hezuo’s market in ‘Nepali Viagra’ will continue energetically for the time being.

P.S. No, I didn’t buy any while I was in Gansu – I haven’t got a clue what to look for and there are a lot of fairly toxic fakes on the market. Plus the caterpillars just look too odd to possibly taste good…