Ouyang Yuancheng runs his factory in Tengchong, selling water buffalo mozzarella and buffalo milk. [Photo provided to China Daily]

His buffalo milk comes from Tengchong, a picturesque town surrounded by forests and mountains, where Ouyang says his Aiai Dairy Farm gets milk from about 10,000 buffaloes after signing up local farmers.

The dairy issues certificates to farmers who produce milk that meets their requirements. To keep milk safe, the dairy asks farmers to mark milk contaminated by antibiotics used on sick buffaloes. Ouyang still pays the same price for contaminated milk, even though it is not used, so farmers are willing to tell the truth.

Currently, Ouyang's factory uses buffalo milk provided by a village on the hillside of Gaoligong Mountain. The villagers here still live very simply; they don't need to close their doors while sleeping at night. With about five months of rain each year, the area boasts more than 70 percent forested land.

"We've tried buffalo milk from other places, but only milk produced in this village is perfect," says Ouyang. He spends most of his time in Beijing, pushing and promoting sales, but he always grabs the chance to visit the village every year.

Ouyang says he has visited cheese factories in Europe and they all have the advantages of fresh air, good water and healthy earth that guarantee the quality of cheese. All are well managed even though they may be small compared to factories in China.

Tengchong's environment gives him the confidence to compete with imported mozzarella.