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China coast as factory of the world

The Pearl River Delta is growing by double digits and stocking Wal-Mart's shelves.

By Staff writer of The Christian Science Monitor / December 16, 2003


This Christmas, as pajama-clad kids across the US wake early to race to the tree, they will probably be shaking boxes filled with toys made in China - especially from China's southeast coast.

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Once a set of sleepy low-rise fishing towns, China's Pearl River Delta can now, and in the foreseeable future, be justifiably called "the factory of the world." It's the engine that places China as America's No. 1 provider of the toys beneath the typical tree, the ornaments on it, and - if artificial - the tree itself.

But China's clout goes well beyond the holiday season. Every day, year round, Guangdong province alone - which covers most of the delta - exports $300 million of goods to world markets. That's a third of China's total. Ten percent of all Delta exports are stocked on Wal-Mart's shelves. In Guangzhou, Shenzhen, and their environs, well-paved roads pass through a staggeringly crowded landscape of factories, offices, dormitories, apartments, and streams of migrant labor.

What those Chinese peasants from the poor interior find seems a different country - one of manicured coastal highways, wealthy peasants, nuclear power, and boom-time growth.

Whether China's east coast, an important new hub for global commerce, will continue logging 10 to 20 percent growth rates is a subject of some debate. US central banker Alan Greenspan warned last week that China could overheat if it does not curb its breakneck pace, and recent inflation. Also, a crisis in China's banking system, still handing out a surfeit of bad loans, could bring shudders to the Middle Kingdom, analysts say.

Yet, barring social unrest, a global meltdown, or withdrawal of foreign direct investment ($475 billion since 1998), many experts see little to stop China from advancing its prospects. The creation of wealth in a semideveloping country that now has more than 100,000 millionaires, has far-reaching implications, and is altering the power balance in the region, with China edging into the central role. The east coast is now producing both for export and domestic markets.

"A lot of people talk about overheating and how China will implode, or that it can't sustain growth," says a Singapore-based economist. "I don't see it. What's going to stop them? The West Pearl region is next."

For ordinary Chinese along the east coast, the changes boggle the mind. Locals live in a world completely different from the one they imagined growing up.

Take Lei Pei Jing, a manager in a plant in Xiamen that makes packaging for Dell, Phillips, and Disney products. When Mr. Lei grew up in the early 1980s Xiamen was a struggling city with a sewage cesspool in the middle of town, and constant power outages. Locals remember in 1988 that public buses had wooden floors with holes in them and carried no headlights.

Today Xiamen is a little Singapore, with a towering skyline, parks, resort villas, an industrial zone, a tourist island, and a rolling seaside college campus that is one of the nicest in China. From the coastal road looking downtown, dozens of high-rise apartments are under construction, with 80 percent of them sold.

"It is indescribable the changes in Xiamen," says Mr. Lei. "I could not imagine what I was going to do when I was older, there weren't any opportunities."

Tang Ying grew up in Zhuhai, on the west shore of the delta. In the 1970s, it took Mr. Tang two days to reach Guangzhou - six transfers and a boat ride. Tang remembers listening one night to a Hong Kong radio quiz show that asked: "What local town has one street and one policeman?" Answer: Zhuhai.

Today Mr. Tang is director of the foreign affairs bureau in Zhuhai, which has hundreds of police, dozens of hotels, and factory sites ranging from Canon to Panasonic. He can also drive to Guangzhou in 90 minutes on a new multilane highway.

A history of business savvy

China's south was always famous for business savvy; that talent was enhanced almost from the day in 1980 when five "special economic zones" were formed, most famously Guangdong, which boasted the first "joint venture" firms.

What's new today is an important consolidation in the Pearl River Delta: an un-sexy but vital element called "infrastructure."