Financial Times FT.com

How China is handling cost rises by boosting value

By Tom Mitchell

Published: May 7 2006 18:54 | Last updated: May 7 2006 18:54

After crossing the Sharp Knife Gate waterway, the highway running west out of the Zhuhai special economic zone enters a predominantly agricultural landscape of banana fields and irrigation channels.

But this small hint of Eden on the western fringe of the world?s largest manufacturing base, the Pearl River Delta in China?s southern Guangdong province, will not last long. Green hills are being ripped open for landfill; electricity pylons march across the fields; and factories soon begin to appear, sporadically at first and then in greater concentrations. One manufactures art supplies, a second bowling balls, another cold-weather gear, a fourth yachts.

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