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Last Updated: Saturday, 31 July, 2004, 15:43 GMT 16:43 UK
On China's fast-track to luxury

By Rupert Wingfield-Hayes
BBC correspondent, Beijing

The rapid growth of the Chinese economy is causing some concern around the globe. Other countries fear they will soon no longer be able to compete. It's a revolution based on a limitless supply of manpower.

Watch out Japan and the US; China already has the world's third biggest economy... and it just keeps growing.

Hummer H2
The Hummer H2 is a status symbol

In Beijing this summer the latest fashion statement is a Hummer H2.

For the uninitiated a Hummer is an enormous gas guzzling American 4X4.

It's about the size of a small house. Just the thing for running around a congested city of 14 million people!

"That has to be the stupidest car on the planet!" I commented to a Chinese friend on seeing yet another one blocking up a Beijing street.

"I can't understand why anyone would want to buy one of those things."

She laughed at me. "I thought you understood Chinese people!" she said.

"They love cars like that. If you're rich in China you want to show it off."

And in Beijing there are plenty of new rich who like to show it off.

I'm not talking about rich compared to other Chinese. I'm talking rich compared to anywhere.

American lifestyle

You can see it the neighbourhood where I live on the outskirts of Beijing.

Two years ago it was surrounded by corn fields.

Now it's surrounded by huge new building sites for luxury housing complexes.

Places with names like Grand Hills, Riviera, or, my personal favourite, Yosemite Park.

A Chinese woman walks past a billboard advocating businesses to advertise in Beijing
China now encourages the art of making money

Here China's new rich can buy a fully packaged American lifestyle, five bedrooms, a real log fire, and of course an extra large garage for the 4X4.

All yours for the bargain sum of $1m, and there are no shortage of takers.

So where's all the money coming from? Well, much of it is far from clean.

In my new area there are no doubt a fair number of corrupt officials, police officers and even the odd gangster.

But an increasing number are from a class that 10 years ago hardly existed in China: private entrepreneurs.

To see them in action you have to leave Beijing behind and head south, 1500 miles south to the little city of Wenzhou on the coast of Zhejiang.

Wenzhou is crowded in between a wall of mountains and the wide expanse of the Pacific Ocean.

Its physical isolation has forced its people to look outwards across the sea.

It's a city of traders and, interestingly, of churches.

Christianity and capitalism have both found fertile souls among the people of Wenzhou.

But as you drive from the airport into the city it's not the churches you notice, it's the factories.

Proud signs

I'd been picked up by the driver of one of those factory owners.

Snug inside the boss' V12 Mercedes Benz we sliced through the traffic at alarming speed, the driver's hand constantly on the horn.

A man eats as he hauls a load of polystyrene on his tricycle in Beijing, July, 2004
Not everyone in modern China is making bags of money

We sped past factory after factory, their oversized gates proudly displaying names like Golden Dragon Footwear, or Bright China Leather.

One even had a huge billboard showing Pierce Brosnan, better known as 007, purportedly wearing one of their suits.

Here capitalism is raw and unregulated. The air is acrid. The rivers run black.

It's not pretty, but it's thriving.

Finally the large black car slipped through the gates of the East Wind cigarette lighter factory.

On its steps stood a short man with a crew cut.

He was the spitting image of China's late communist party chief Deng Xiaoping, the man who coined the phrase "to get rich is glorious".

Success story

Mr Feng has taken the words of his more famous doppelganger to heart.

Starting with a small loan 15 years ago he now produces 100m cigarette lighters a year.

If you have a cigarette lighter in your pocket or your handbag the chances are it comes from Wenzhou, and there's a fair chance it comes from Mr Feng's factory.

Mr Feng's formula for success is simple.

Learn how to make something, then make it cheaper than anyone else.

The first part was easy, he bought samples of the best lighters from Japan, took them apart and copied them.

But it's cheap that Mr Feng really excels at.

He took a sleek red lighter from his pocket and gave it to me.

"In Japan this costs about $25," he told me. "I can make it for $1!"

The world's first magnetic levitation train for commercial use in Shanghai
China's changing society is most evident in its cities

Mr Feng's secret is his work force. In a large hanger I found 600 of them sitting behind rows of desks assembling lighters.

Most were young women.

"They're better at the fiddly work" Mr Feng told me.

But men or women, they all have one thing in common, they are all migrants from China's countryside.

And they'll all work for virtually nothing. Mr Feng pays his workers about $90 a month.

China today is like 18th century Manchester, only much, much bigger.

There are now thousands of Mr Fengs all over southern China, setting up factories and churning out goods.

And there are 900 million poor farmers in China's countryside, all just waiting to up sticks and move to a factory.

The implications for the rest of the world are troubling.

"Just think of it this way," one Chinese economist told me recently.

"If all the industrial jobs in Europe and America moved to China tomorrow, we'd still have plenty of people left over!"

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