| Pittsburghers
join rush to cash in on China boom SHENZHEN, China --
It took freckled teenager Lem Ying Ling two hours, riding on three
separate buses, to find her way to this dark, dusty boom town and
a job paying $100 a month.
The 18-year-old sometimes works 12 hours a day packing notebook
portfolios and briefcases for a Pittsburgh-area promotional products
company, Leed's, and sends half of what she makes back home to her
parents and younger brother in rural China. The paycheck leaves
her with enough money to hang out at a local Internet "bar"
and chat online with former classmates for 63 cents an hour.
That she can afford such leisure is a point of pride. "I feel
excited about spending my own money," said the dark-haired
Ms. Lem, a multicolored medallion hanging from her neck.
Over the last quarter century, as the Chinese Communist Party opened
itself to the West, millions like Ms. Lem have left behind the wrenching
poverty of inner China for low-skilled manufacturing jobs along
the coasts, where incomes are two-thirds higher, helping to transform
an agriculturally based country into a workshop of the world, just
as European immigrants did in Pittsburgh a century ago.
China's rural-to-urban migration, ranging in estimates from 90
million to 300 million, now represents the greatest mass movement
in human history. And like the American move westward in the 19th
and 20th centuries, the journey is about the search for a better
life, a better wage and new opportunities as China recovers from
decades of extreme poverty, widespread famine and untold hardship.
Perhaps no Pittsburgh-area company is working harder to benefit
from this rural exodus halfway around the world than Leed's, an
Upper Burrell-based maker of tote bags and notebooks decorated with
corporate logos. One of the largest privately held companies in
Western Pennsylvania, Leed's sold $205 million of its products last
year, up from $165 million in 2004 and $123 million in 2003. Because
of the recent revenue increases, more than 1,000 now work at its
corporate headquarters northeast of Pittsburgh, double the number
that worked there five years ago.
It keeps its costs down by importing 98 percent of what it sells
from China, where Leed's co-founder Bruce Weiner first ventured
on a business trip with his father in 1979, a year after the country
opened to the West, believing that "over a period of time that
China would become a low-cost producer."
"To us, it just seemed like the next logical step," said
Mr. Weiner, who started Leed's in 1986 but sold his interest in
2000. "You always want to be ahead of the curve."
The company never built a factory in China, thinking such an investment
would be too "risky," said Leed's President David Nicholson,
36. But it does have 50 employees spread across China , and it buys
from about 30 regular suppliers, some of the relationships dating
back to Mr. Weiner's time with the company.
Half of what Leed's orders each year begins at factories here in
Shenzhen, China's first experiment in homegrown capitalism and a
major destination for rural migrants. When Chinese leader Deng Xiaoping
in 1980 selected the small Pearl River Delta fishing village as
the first of many "special economic zones," Shenzhen had
only 70,000 people. Two and a half decades later, the southern Chinese
city has a population of 7 million, making it a magnet for young
workers (most new arrivals are under the age of 30), foreign investors
and pickpockets.
Money, money, money
The place is representative of China's new freedoms -- and temptations.
"It seemed that everyone had come to this strange city to
make money," writes author Mian Mian in "Candy,"
a 2003 novel about hedonism in the new China. "It was hot and
muggy, and the streets were always full of distraught people. Prostitutes
were everywhere."
At rush hour in late September, Shenzhen is a mix of dust and haze
and smoke, with 40-container trucks and buses and cabs and bicycles
and pedestrians all competing for spots on the choked roadways,
drivers zigzagging for any open space, no matter how small, their
horns blaring.
Cages and bars cover apartment windows and balconies, sending a
signal about crime here. On the roads are billboards advertising,
respectively, the country's one-child policy and civic pride --
a young girl standing amid a field of flowers, saying "Mommy,
just give birth to one, one is enough" and "Build a nice
environment. Be proud of your traditions."
As the sun goes down, a government-enforced power blackout turns
the streets dark. In the southern section of the city, inside the
government-controlled Fuchengau Industrial Zone, is the white-and-blue-checkered
factory that produces bags for Leed's, and pulling up to the gate
are Mark Yuk Cheong and Eileen Chua, the Hong Kong couple that owns
the factory and another one nearby.
Leed's is the biggest client for Mr. Cheong and Ms. Chua, and 90
percent of what is made here travels to Pittsburgh, via Hong Kong,
Long Beach, Calif., and Chicago, by boat and truck and train. Mr.
Cheong has a relationship with Leed's dating back to its founder,
Mr. Weiner, who hired Mr. Cheong in the 1990s as Leed's overseas
operations manager, buying from all over Asia.
Mr. Cheong left Leed's, set up a separate trading office in Sri
Lanka, and eventually returned to Hong Kong to start a manufacturing
company that now has revenues of $8.5 million, according to Mr.
Cheong. He will ship 260 containers to Pittsburgh this year -- about
8 percent of the 3,000 containers Leed's imports from China annually.
Leed's is obviously comfortable with the 39-year-old, English-speaking
Mr. Cheong, the son of a Hong Kong bus driver. Dealing with contract
operators in China can "be somewhat of a crapshoot," Mr.
Nicholson said. "You're dealing in locations halfway around
the world and -- if you don't have people watching it you can trust,
you never know. There is still quite a bit of corruption under the
table."
Greasing the palms
Asked about what it takes to keep a local business going, Mr. Cheong
said his partner in Shenzhen will sometimes put "a few thousand"
Hong Kong dollars -- about $256 in U.S. dollars -- in a red envelope
and slip it to a local official. Other times, it's wine. Or cigarettes
.
It's an accepted practice here, and the amount they provide "is
considered small," Ms. Chua said. When profit margins were
larger, "I paid 10,000 ($1,284 in U.S. dollars), easy,"
Mr. Cheong said.
Work at Mr. Cheong's factory starts at 7 a.m. or 7:30 a.m. and
lasts until 10 p.m. or 10:30 p.m., with breaks for lunch at noon
and dinner at 5:30 p.m. The factory floor on this night is a flurry
of stitching and gluing and packaging and sorting, "Leed's"
boxes stacked throughout the building.
The 400 workers here live in a dorm next to the factory, many sleeping
several people to a room, their bunk-bed frames draped with sheets
for privacy. They also eat every meal at the factory, their dinner
bowls stacked outside on shelves. Live chickens also are on site.
Tonight, they consume a meal of rice, vegetables, cabbage, hot
soup, stir fried pork and chicken. The young women watch a TV serial
on outdoor benches, and some of the boys play basketball, ping-pong
and Chinese chess. Others relax in their rooms, watching TV. During
rare days, when demand is high, these workers will stay on the job
until 2 a.m.
But the long hours are not a problem, Mr. Cheong said. At least
70 percent of the factory workers are from outlying provinces, having
traveled long distances to make what they can and send it back home.
Wages range from less than $100 a month on the factory floor to
$380 per month for the highest-paid office worker. "They come
here just to make money," Mr. Cheong said.
That includes 39-year-old Li Man Chung, one of the oldest workers
at the factory. Although he lives just an hour and half away by
bus, he rarely has had the chance to venture home to his family
since coming to the factory four years ago, visiting them once a
year.
He makes $190 a month, or $2,280 a year, for his work -- a good
wage in a country where the average factory wage is about $1,000
a year. His main task is to make sure all materials are cut correctly
before they are assembled into bags and portfolios.
Prior to getting this job, Mr. Li was a solider in an outlying
province making only $50 a month -- the "burden of the family,"
as he described it. His family could afford to eat meat only once
a week.
Today, there is enough money for his 12-year-old son and wife to
have pork with every meal.
"Now, I am actually taking care of the family," he said.
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