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COPYRIGHT 2006 Smithsonian Institution
THE DIMLY LIT ROOM has low ceilings and poor ventilation. The machinery is outdated and the glue guns leak. Rubber cement fumes spike the air. Rolls of leather stand alongside a pile of rubber soles. In a corner, a woman cuts synthetic material into shoe linings while her colleagues take a break over bowls of spicy tofu.
Chen Chuang and Dai Wei located their factory in Wenzhou (pop. seven million), China's unofficial shoemaking capital, because of the city's ready supply of laborers. The factory produces some 100,000 pairs of shoes a year--deck shoes to cross-trainers--making a profit of about three yuan, or 37 cents, a pair. Chen, who wears a T-shirt with "Welcome to the Love Hood" on it, says he would have been miserable in the state-run rubber factory that employed his father. "Our future is much more interesting," he says. "We work for ourselves, and we are more successful because we can survive with such small margins."
In less than a generation, Wenzhou, a port city on the East China Sea about 200 miles south of Shanghai, has transformed itself from a charming backwater to a showcase of China's new commercial vitality. Wenzhou churns out not only shoes but also pharmaceuticals, garments, sporting goods, optics, kitchen appliances, valves, paint and metal works. Construction cranes rake across work sites manned by crews on double and triple shifts. The city's annual per capita income of $2,500 is almost double the national average of $1,300. Gated communities of opulent villas have mushroomed in the suburbs, while entire neighborhoods of dilapidated hutongs--wooden homes and courtyards that have stood for centuries--await the wrecking ball. Traffic along the city's main thoroughfares is a frenzied ballet in which bicycles, wagon-pulling tractors and carts pedaled by coolies (derived in part from the Chinese ku li, or "bitter labor") vie with Cadillacs, BMWs and even Hummers.
Since 1989, when pro-democracy demonstrators were massacred in Beijing's Tiananmen Square, prompting many foreign business men and women to vow they would never bet again on China, the country has attracted $600 billion in foreign investment. China now enjoys an estimated $202 billion trade surplus with the United States and owns more than $795 billion in foreign currency, most of which is invested in U.S. bonds, which help the deficit-saddled U.S. government finance itself. In the two decades before 2000, the Chinese economy quadrupled, and it is expected to become the world's fourth largest by the end of this decade.
But the socialist state also suffers high levels of unemployment. Some 13 percent of its 1.3 billion people survive on a dollar a day or less. Chinese banks are stuck with half a trillion dollars in bad loans. And China's roads, railroads, energy grids and healthcare systems are woefully inadequate.
If China's colossal impact on world...
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