Published: June 2007
Boomtowns
China is in the fast lane, ignoring every speed limit. Cities spread like a cartographic contagion.
By Peter Hessler

At 2:30 in the afternoon, the bosses began designing the factory. The three-story building they had rented was perfectly empty: white walls, bare floors, a front door without a lock. You could come or go; everything in the Lishui Economic Development Zone shared that openness. Neighboring buildings were also empty shells, and they flanked a dirt road that pointed toward an unfinished highway. Blank silver billboards reflected the sky, advertising nothing but late October sunlight.

Wang Aiguo and Gao Xiaomeng had driven the 80 miles (130 kilometers) from Wenzhou, a city on China's southeastern coast. They were family—uncle and nephew—and they had come to Lishui to start a new business. "This whole area just opened up," Boss Gao explained, when I met him at the factory gate. "Wenzhou used to be this way, but now it's quite expensive, especially for a small company. It's better to be in a place like this."

On the first floor, we were joined by a contractor and his assistant. There was no architect, no draftsman; nobody had brought a ruler or a plumb line. Instead, Boss Gao began by handing out 555-brand cigarettes. He was 33 years old, with a sharp crewcut and a nervous air that intensified whenever his uncle was around. After everybody lit up, the young man reached into his shoulder bag for a pen and a scrap of paper.

First, he sketched the room's exterior walls. Then he started designing; every pen stroke represented a wall to be installed, and the factory began to take shape before our eyes. He drew two lines in the southwest corner: a future machine room. Next to that, a chemist's laboratory, followed by a storeroom and a secondary machine room. Boss Wang, the uncle, studied the page and said, "We don't need this room."

They conferred and then scratched it out. In 27 minutes, they had finished designing the ground floor, and we went upstairs. More cigarettes. Boss Gao flipped over the paper.

"This is too small for an office."

"Put the wall here instead. That's big enough."

"Can you build another wall here?"

In 23 minutes, they designed an office, a hallway, and three living rooms for factory managers. On the top floor, the workers' dormitories required another 14 minutes. All told, they had mapped out a 21,500-square-foot (2,000 square meters) factory, from bottom to top, in one hour and four minutes. Boss Gao handed the scrap of paper to the contractor. The man asked when they wanted the estimate.

"How about this afternoon?"

The contractor looked at his watch. It was 3:48 p.m.

"I can't do it that fast!"

"Well, then tell me early in the morning."

They discussed materials—paint, cement, cinder blocks. "We want the ten-dollar doors," Boss Wang told the contractor, who was a Lishui native. "And don't try to make money by getting cheaper materials—do a good job now, and we'll hire you again. That's how we make money in Wenzhou. Do you understand?"

The Wenzhou airport bookstore stocks a volume titled, Actually, You Don't Understand the Wenzhou People. It shares a shelf with The Feared Wenzhou People, The Collected Secrets of How Wenzhou People Make Money, and The Jews of the East: The Commercial Stories of Fifty Wenzhou Businessmen. For the Chinese, this part of Zhejiang Province has become a source of fascination, and the local press contributes to the legend. Recently, Wenzhou's Fortune Weekly conducted a survey of local millionaires. One question was: If forced to choose between your business and your family, which would it be? Of the respondents, 60 percent chose business, and 20 percent chose family. The other 20 percent couldn't make up their minds.

From the beginning, an element of desperation helped create the Wenzhou business tradition. The region has little arable soil, and the mountainous landscape made for bad roads to the interior. With few options, Wenzhou natives turned to the sea, developing a strong trading culture by the end of the Ming dynasty, in the 17th century. But they lost their edge after 1949, when the communists came to power and cut off overseas trade links, as well as most private entrepreneurship. Even in the early 1980s, when Deng Xiaoping's free-market reforms began to take hold, Wenzhou started with distinct disadvantages. Residents lacked the education of people in Beijing, and they didn't attract the foreign investment of Shanghai. When the government established the first Special Economic Zone, whose trade and tax privileges were designed to spur growth, they chose Shenzhen, which is near Hong Kong.

But Wenzhou had the priceless capital of native instinct. Families opened tiny workshops, often with fewer than a dozen workers, and they produced simple goods. Over time, workshops blossomed into full-scale factories, and Wenzhou came to dominate certain low-tech industries. Today, one-quarter of all shoes bought in China come from Wenzhou. The city makes 70 percent of the world's cigarette lighters. Over 90 percent of Wenzhou's economy is private.

The Wenzhou Model, as it became known, spread throughout southern Zhejiang Province. Although nearly 80 percent of all Zhejiang entrepreneurs have a formal education of only eight years or less, the province has become the richest in China by most measures. The per capita incomes for both rural and urban residents are the highest of any Chinese province (this excludes specially administered cities such as Shanghai and Beijing). Zhejiang reflects China's economic miracle: a poor, overwhelmingly rural nation that has somehow become the world's most vibrant factory center.

Over the course of a year, I traveled repeatedly to Zhejiang, every time renting a car in Wenzhou and driving into the province. In the same way that a pilgrim treks across Spain, stopping at the shrines of obscure saints, I passed the birthplaces of products that are usually taken for granted. From the airport, driving south along the coast, I started with hinges—a stretch of road where the vast majority of billboards advertised every possible variation of the piece of metal used to swing a door. A mile later, the ads shifted to electric plugs and adapters. Then I reached a neighborhood of electric switches, followed by fluorescent lightbulbs, then faucets.

Deeper in the province, the shrines became more elaborate. At Qiaotou, I stopped to admire the 20-foot-high (six meters) silver statue of a button with wings that had been erected by the town elders. Qiaotou's population is only 64,000, but 380 local factories produce more than 70 percent of the buttons for clothes made in China. In Wuyi, I asked some bystanders what the local product was. A man reached into his pocket and pulled out three playing cards—queens, all of them. The city manufactures more than one billion decks a year. Datang township makes one-third of the world's socks. Songxia produces 350 million umbrellas every year. Table tennis paddles come from Shangguan; Fenshui turns out pens; Xiaxie does jungle gyms. Forty percent of the world's neckties are made in Shengzhou.

Everything is sold in a town called Yiwu. For the Zhejiang pilgrim, that's the promised land—Yiwu's slogan is "a sea of commodities, a paradise for shoppers." Yiwu is in the middle of nowhere, a hundred miles (160 kilometers) from the coast, but traders come from all over the world to buy goods in bulk. There's a scarf district, a plastic bag market, an avenue where every shop sells elastic. If you're burned out on buttons, take a stroll down Binwang Zipper Professional Street. The China Yiwu International Trade City, a local mall, has more than 30,000 stalls—if you spend one minute at each shop, eight hours a day, you'll leave two months later. Yiwu attracts so many Middle Eastern traders that one neighborhood has become home to 23 large Arabic restaurants, as well as a Lebanese bakery. I ate dinner at Arbeer, a Kurdish joint, with a trader from northern Iraq. He was buying blue jeans and electric lamps.

In the past, Lishui was the only major Zhejiang city that wasn't on the pilgrim's route. It's high in the mountains, where the Ou River runs too shallow for big boats; one local described it as the Tibet of Zhejiang. That was an oxymoron—the Alaska of New Jersey—but he made his point: In an industrial landscape, Lishui was the final frontier. It was the poorest city in China's richest province, but the new highway was almost finished, and investors were moving in fast.

Three months after designing the factory, Boss Gao and Boss Wang tested the equipment. Since my first visit, they had poached half a dozen skilled workers from another factory in southern China, and an assembly line had been installed. The 50-foot-long (15 meters) machine lurked sullenly in the corner room, six tons of steel painted sea green.

The thing rumbled when the head technician threw the switch. Gas burners hummed beneath blue flames; a stainless steel belt lurched forward. The digital console tracked the rising temperature: 200 degrees Celsius (390°F), 300 degrees (570°F), 400 (750°F). It hit 474 (885°F), then dropped. They needed to reach 500 (930°F) before production could begin.

"Maybe it's because it's colder here than in Guangdong," the technician said. His name was Luo Shouyun, but everybody called him Mechanic Luo. He put on a pair of fireproof gloves and tried to open the door to one of the machine's ovens. But the handle melted off in his hand; he dropped it, cursing. The red-hot piece of metal lay on the floor, hissing like an angry snake.

"Mei shir," Boss Wang said. "No problem."

Mechanic Luo fiddled with the control box. He theorized that the natural gas canisters might be too cold. The men adjusted the valves and began to rock the massive metal tubes. The temperature didn't rise. They shook the tubes harder; nothing happened. Somebody went to get a stepladder and boiling water.

Boss Gao looked even more skittish than usual; he'd never installed such a big assembly line. More than a decade ago, he had started his first workshop in the outskirts of Wenzhou. With his parents and two sisters, he produced the fabric that lines the waist of cheap trousers. Initially, profits were 50 percent, and the workshop steadily expanded. But the neighborhood became home to more than 20 other companies making trouser lining, and the margins dropped until Boss Gao finally quit. "It used to be that you'd try to find a product that nobody else was making," he explained. "But now everything is already being made by somebody in China."

That's one weakness of the Wenzhou Model. Entrepreneurs produce goods that require little capital and low technology, which makes it easy for neighbors to jump in. Boss Wang, the uncle, had slipped into the same pattern. Previously, he had manufactured the steel underwire for women's brassieres, and his profits had dropped steadily. When the two men joined forces, they decided to continue manufacturing underwire, but their goal was to find a more profitable main product.

Fortunately, the average bra is composed of 12 separate components. In a figurative sense, the men began their quest at the bottom, with the underwire, and worked their way up. They thought about thread; they looked at lace; they considered the clasp. But when they reached the top, where tiny 0- and 8-shaped rings adjust the bra straps, they found what they were looking for.

A bra ring consists of steel coated with high-gloss nylon, requiring a specialized manufacturing process. The key equipment is a computer-regulated assembly line, divided into three separate stages, each of which heats the object to over 500 degrees Celsius (930�F). Originally, Europeans produced the rings, but by the early 1990s Taiwan dominated the market. In the middle of that decade, a mainland Chinese company called Daming imported an assembly line.

After its arrival on the mainland, where production costs are much cheaper, "the Machine" essentially minted money. The boss got rich, and then a worker named Liu Hongwei got an idea. Despite his lack of formal education, Liu was a skilled mechanic, who worked closely with the Machine. Meticulously, he memorized the assembly line, piece by piece, and in secret he sketched out blueprints. When the plans were complete, he contacted a second boss at a company called Shangang Keji, in the city of Shantou.

In 1998, Boss Number Two hired Liu and took the blueprints to Qingsui Machinery Manufacture Company, in Guangzhou, which custom-built the assembly line. Initially, the new Machine didn't work—nobody's memory is perfect, after all—but two months of adjustments solved the problems. Shangang Keji began producing bra rings, but then Liu found Boss Number Three, at a company called Jinde. Every time Liu jumped, he demanded money for his blueprints and expertise; some believe he made as much as $20,000.

Without knowing it, the man was following a path blazed by other societies that had also experienced sudden manufacturing booms. In 1810, a wealthy American named Francis Cabot Lowell traveled to England, where he used his connections to tour the world's premier textile mills. British law forbade the export of machinery or blueprints, but Lowell had an excellent memory. He returned to the United States, where, in the words of his business partner, he re-invented the Cartwright loom. Lowell became an American hero, with a Massachusetts factory town named in his honor.

Nearly two centuries later, Liu Hongwei's luck ran out when he tried to switch to Boss Number Four. According to a former co-worker, Number Three put a $12,000 bounty on Liu's head, and he fled. "I know that Jinde was looking for him, and they were angry," said Gu Hong, a Qingsui business manager who had helped custom-build the Machine. "He disappeared."

The industry, though, had already been changed. In the five years after Liu's reinvention, the bra-ring price dropped by 60 percent. Today, more than 20 Chinese companies manufacture the object, and the Machine is available to anybody with $65,000. Previously, all major manufacturers had been concentrated in the south, but now Boss Gao and Boss Wang hoped to be the first to make rings in Zhejiang.

On the day they tested the Machine, the temperature refused to budge, and the men took turns standing on the stepladder and dumping buckets of boiling water over the gas canisters. Half an hour later, steam filled the room, and they had discovered a new axiom: Pouring boiling water on natural gas canisters has no effect on the production of bra rings.

After four hours of testing, they gave up. In the end, Mechanic Luo disassembled the Machine, replaced a key part, and moved the burners closer to the assembly line. It took nearly two weeks. Some sections of the Machine had to be jury-rigged with plywood and string; they never reattached the melted handle. "The blueprints still aren't very good," Mechanic Luo explained. Years ago, he had worked alongside Liu Hongwei, and he said the same things about the technology thief that I heard from others. Liu was tall, devious, and from Sichuan Province. People speculated that Liu wasn't his real name, and they had never met his wife or child. Nobody had any idea where the man had gone.

The government motto of the Lishui Economic Development Zone is "Each person does the work of two; two days' work is done in one." The slogan may be too modest. From 2000 to 2005, the city's population went from 160,000 to 250,000, and the local government invested 8.8 billion dollars in infrastructure for the region it administers. During those five years, infrastructure investment was five times the amount spent in the previous half century. In money terms, what was once 50 days' work is now done in one.

For the past three decades, China's economy has averaged nearly 10 percent annual growth. The economy is fueled by the largest migration the world has ever seen: An estimated 140 million rural Chinese have already left their homes, and another 45 million are expected to join the urban workforce in the next five years. Most have gone to factory towns along the coast, but in recent years migrants have been drawn increasingly to cities in the interior, where there's less competition for jobs.

Such cities must expand and attract industry on their own, because the central government no longer provides the funding and guidance of the old planned economy. One common strategy is to establish a factory zone: Clear out land, sell it at reduced rates, and give investors tax breaks. In 2002, Lishui began construction of a factory zone, which consists of a 5.6-square-mile (14.5 square kilometers) plot to the south of the city proper. By 2006, nearly 200 plants had started production, attracting 30,000 migrant workers.

This early growth had been guided by Wang Lijiong, the 48-year-old director of the development zone. As a young man, Wang's first job had been in a dynamite factory, and then he spent five years driving a tank for the People's Liberation Army. Upon leaving the military, he worked in a state-owned bank, and then he began to rise through the government bureaucracy. He is friendly and open—qualities unusual for a Chinese official. He told me that he still draws inspiration from his military experience. "In a tank, you go directly at your goal," he said. "You need the spirit of persistence."

Lishui's zone occupies what was previously rugged farmland. Director Wang told me that approximately one thousand peasants had been relocated, as well as exactly 108 separate mountains and hills. He said, simply, "We lowered the higher places and raised the lower places." During one of my earlier trips to Lishui, I had watched a higher place get lowered. There were 30 dump trucks and 11 Caterpillar excavators; workers had just packed the hillside with 9.9 tons (9 metric tons) of dynamite. Eventually, this site would become home to a half dozen chemical factories.

A worker noticed me and walked over. In each hand, he carried a cheap plastic shopping bag filled with explosive. He set the bags on the ground and said, "Will you take my little brother to New York?"

Having lived as a foreigner in China for a decade, I was accustomed to non sequitur conversations, but that opener left me speechless. Anyway, I couldn't take my eyes off those plastic bags. The man smiled and said, "I'm joking. But he really wants to go to America."

He introduced me to Mu Shiyou, who was in charge of detonation. Mu and I walked to the base of the doomed hill, where a tangle of wires connected to the packed dynamite. He spliced the wires to a single line and payed it out as we walked away. All vehicles and workers had been evacuated; it was so quiet that I could hear birds overhead.

The detonator box had two switches labeled "Charge" and "Explode." We stood behind the treaded wheels of a parked Caterpillar. A command crackled over Mu's walkie-talkie: "Charge!"

He hit the switch and said, "Get out there where you can see it better!" A countdown, another command ("Explode!"), and he flipped the second switch. For the briefest instant, before there was any sound, a web of electricity flickered across the hillside, like lightning come to earth.

On February 6, half a month after testing the Machine, Boss Wang officially opened the factory by igniting two boxes of fireworks. According to the lunar calendar, it was the eighth day of the new year, and a feng shui expert had advised the owners to take advantage of eight, a lucky number in China.

Like most Wenzhou businessmen, Boss Wang was deeply superstitious. He had a high-pitched voice and a slight stutter; his eyelids fluttered rapidly when he spoke. He was 40 years old, and in the past he had always manufactured parts of objects: pieces of piping, pieces of bicycle bells, pieces of brassieres. In hindsight, he wished that as a young man he had gone into the shoe business. "I have some regrets," he told me, because a number of his boyhood friends had become shoe-factory millionaires. Even in the new Lishui factory zone, where virtually everything was still under construction, the grass was already greener next door. Boss Wang's neighbor was Geley Electrical Co., whose owner had started as a lowly button manufacturer in Qiaotou before moving on to bigger and better things. Now Geley employed hundreds of workers, and the new factory produced three-dollar plastic electric outlets that were marketed proudly as the Jane Eyre model.

Boss Wang and Boss Gao gave their company the English name Lishui Yashun Underdress Fittings Industry Co., Ltd. Branding was instant: For less than $800, a Wenzhou designer created a logo, sample books, website, and business cards. Everything was hot pink; the website and sample books featured photographs of sultry foreign women wearing bras. The men's business cards bore the logo:

I wondered if the design represented a bird in flight, or maybe a heart, or perhaps a pair of—"I don't know what it's supposed to be," Boss Wang admitted. "It doesn't matter, as long as it looks good. The designer probably took it from some other company."

Three days after setting off the fireworks, Boss Wang posted a handwritten job notice on the factory gate:

1. Ages 18 to 35, middle-school education
2. Good health, good quality
3. Attentive to hygiene, willing to eat bitterness and work hard.

All across the Lishui development zone, young people wandered in packs, reading the factory signs that had been posted at the end of the New Year holiday. At the local job fair, migrants gazed up at a digital board with listings so terse they read like code:

"Cashiers, women, 1.66 meters [5.4 feet] or taller"
"Willing to eat bitterness and work hard, 25 to 45 yuan a day, male,
middle school"

"Male workers 35 yuan, female workers 25 yuan"
"Average workers, people from Jiangxi and Sichuan need not apply."

There were no euphemisms, no apologies. If a company preferred its women to be tall, they asked for tall women. If they had a prejudice against a certain region, tough luck. At a factory called Jinchao, the guard turned away all applicants from Guizhou, the poorest province in China. When I asked the manager why, he said, "Around here, a lot of the petty criminals are from Guizhou." At Yashun, Boss Gao's father handled the hiring, and I sat in on a job interview in which he asked an applicant how old she was. The woman said, "Do you mean my real age, or the age that's on my identity card?" She explained that seven years ago, when she had first left home, she'd forged the ID because she'd been so young. The man offered her a job; he told me that a woman like that must really enjoy working.

In China, minimum wage varies by region, and Lishui's is about 40 cents an hour. Yashun offered jobs at the lowest rate, but applicants poured in; there was no shortage of unskilled labor. Boss Gao's father kept a pile of bra rings on his desk, to show what the factory produced. On the second day, after the workers' list was full, he told an applicant that her name would be on the backup sheet.

"Just switch my name with somebody else's," she said.

"I can't do that. We already have enough. We have 19."

The woman had short-cropped hair and lively eyes; her identity card said she was 17. She leaned close to the desk and fiddled nervously with the bra rings, as if they were pieces in a game she was determined to win.

"Just change a name," she said. "Why does it matter?"

"I can't do that."

"I would have come yesterday if I'd known."

"I'll make sure you're first on the second list. See, I even wrote 'good girl' next to your name."

But the woman wouldn't give up. At last, after ten minutes of pleading, he added her name—but then the Wenzhou superstition struck. "Now it's ershi," he said. "Twenty. That's a bad-sounding number—too much like esi, starving to death. So I'll have to add another."

The woman thanked him and headed toward the door.

"But if the boss says 21 is too many, then it'll have to be 19," he warned her.

The woman walked back to the desk. "Move my name up the list."

Five minutes later, her name was squarely in the middle of the sheet. When she finally left, the man shook his head admiringly. He said, "That girl knows how to get things done."

Later they realized that she had used her older sister's identity card. The girl who got things done, it turned out, was barely 15 years old.

The first time I visited the factory, the road in front was dirt, and the development zone's billboards were mostly blank. By my second visit, six weeks later, the Yintai real estate company had posted an advertisement. The road was being paved during my third trip. On the fourth, I saw a woman drive the front left wheel of her Honda into an open manhole. The manhole covers were installed by my fifth visit. A medical clinic appeared before the sixth trip. Sidewalks and streetlights by the seventh. Trees and bus stops by the eighth.

Factory production didn't wait for finished infrastructure, and neither did daily life. In a Chinese development zone, construction sites are essentially public space, and the factory's street hosted all sorts of makeshift entertainment. One week, a traditional Wu opera troupe erected a stage in the middle of the road; later, a traveling carnival set up shop. Every month, the local government parked a truck at an intersection, unfurled a white screen, and showed a free double feature. Nearby, a real estate company used its construction site to sponsor the Harmonious Sound Workers' Karaoke Contest. Representatives from local factories competed, and over 12,000 workers came to watch. The winner was a security guard from a plant that made down blankets and clothing. He sang a popular love song—"A Woman's Heart."

One week, the Red Star Acrobatic and Artistic Troupe came to town. Their battered truck had side panels that unfolded to reveal a marquee with photographs of half-dressed women, along with bright slogans (Passion! Perfection!). The truck's body converted into a box office; they pitched a tent in back. Admission was 60 cents, and 160 people bought tickets—almost all men. Troupe members sang songs and performed skits; one man acted out the heartbreaking story of a migrant imprisoned for theft. Another man popped his shoulder out of its socket and writhed on stage while his brother took up a collection. At the end, a woman stripped.

It was all illegal. Nude shows are banned in China, and the troupe wasn't registered; no one even had a driver's license. They were an extended family from Henan Province, bouncing their way south—in succession, they'd been kicked out of Nanjing, Hangzhou, and Yongkang. When I asked Liu Changfu, the troupe leader, why they included nudity, he said, "Before people buy tickets, they often ask if we have some 'open entertainment.' We need to be able to say yes." The task of stripping fell to the wife of the most distant cousin. Liu told me they were profitable as long as they kept moving, and there was always another half-built development zone down the road.

Lishui depended as much on construction sites as did the itinerant entertainers. Chinese cities aren't allowed to raise funds through municipal bonds or sharp tax increases, so they turn to real estate. Legally, all land belongs to the nation, but local governments can approve the sale of land-use rights—the closest thing to private ownership. Cities acquire suburban land from peasants at artificially low set rates, approve it for development, and sell for a profit on the open market. Across China, an estimated 40 to 60 percent of local government revenue is acquired in this way.

New apartment complexes were rising all around Lishui, and one of the biggest was the Jiangbin development. Formerly, the 16.5 acres (6.7 hectares) had belonged to the village of Xiahe, but in 2000 the city government bought the land-use rights for one million dollars. Three years later, Lishui flipped the land to Yintai Real Estate for 37 million dollars. Given that corruption is endemic in Chinese real estate, the actual price may have been even higher.

In such an environment, everybody gambles on growth. Most of the city's massive investment in infrastructure had been borrowed from state-owned banks, which also loaned money to the developers—Yintai had borrowed over 28 million dollars for its Jiangbin venture. If the real estate market went cold, the whole system was in trouble, and the central government had recently instituted new laws intended to slow down such expansions. But the money kept pouring in—during the past five years, the average price of a Lishui apartment had risen sixfold.

On paper, it looked untenable, but the Chinese economic and social environment is unlike anything else in the world. Real estate laws are skewed in the government's favor, and migration and the export economy create a constant demand for expanding cities. After the hard times of the 20th century, the average citizen is willing to tolerate unfairness as long as his living standard improves. In Jiangbin, I met Zhang Qiaoping, whose family had formerly farmed one-third of an acre (0.13 hectare) on the site. The government paid him $15,000 for a plot of land that was worth at least $200,000. Zhang wasn't happy, but he hadn't protested; instead, he invested in a small shop next to the site. Most customers were construction workers. There wasn't much money trickling down to the lowest levels, but Zhang had tapped into enough to support his family.

Some peasants even made it to the top. Yintai is owned by the Ji family, whose patriarch had been a farmer before engaging in small-scale construction work in the 1980s. Eventually, he expanded into real estate, and now his three sons help manage the company. I met the youngest, Ji Shengjun, at the nightclub he owns. Flanked by his bodyguard, the 26-year-old was drinking Matisse scotch mixed with green tea, and listening patiently to the entreaties of a pretty young woman. Ji wore Prada trousers and a Versace shirt; his Piaget watch had cost $10,000. He told me that Yintai expected to profit 19 million dollars from Jiangbin. The apartment complex would feature a musical fountain bigger than a football field. The pretty young woman was begging Ji to help her acquire a visa to Portugal.

Much of China's economy depends on peasants who have left the land, and that was also true at the Yashun factory. Boss Wang and Boss Gao come from rice-growing families; Mechanic Luo was born on a cotton plot. A former orange grower worked the metal punch machine, and the chemist had grown up with tea, tobacco, and peanuts. The assembly-line women knew wheat and soybeans. The accountant came from pear country. Despite their varied rural backgrounds, now everybody concentrated on the production of exactly two things: underwire and bra rings that weigh half a gram each.

Even the bosses were willing to work like peasants—every day, the men spent long hours on the factory floor. Each had invested his life savings in the business—cash—and only Boss Gao had borrowed a little from the bank. There was no management board, no investment schedule, no business plan. They began production without a single guaranteed customer. Throughout March and April, Boss Wang traveled to bra assembly plants, bearing gifts: Chunghwa cigarettes, Wuliangye alcohol, yellow croaker fish (a Wenzhou favorite). But potential customers were slow to make orders, and by summer the factory had over one million bra rings in storage. They laid off most unskilled workers and slashed the technicians' salaries in half.

Initially, the bosses had moved with remarkable speed, but now they paid for the lack of a system. Such institutional weaknesses are becoming more apparent in Chinese businesses because of the increasingly competitive environment. And the nation's next desired economic stage—innovative products and the creation of international brands—will require more creativity and logical organization.

At Yashun, only Boss Gao had as much as a trade-school education, and Mechanic Luo, the most important employee, hadn't finished elementary school. When he began working full-time at the age of 14, he was nearly illiterate, but he enrolled in night classes in Shenzhen. Such courses are common in Chinese boomtowns, and Luo eventually received his high school certification. He also acquired technical skills that allowed him to work with the Machine, and over the years he had been poached three times from bra-ring jobs. Along the way, his salary had risen to $760 a month, a high wage in China. As is common in the cutthroat factory world, he left every job without notice. Each time, he simply asked for a few days' vacation, changed his cell phone number, and never returned.

When Yashun struggled, the bosses cut Mechanic Luo's salary in half, and then they stopped paying him at all. Perversely, this reflected his value—he was the only person who understood the Machine. During a crisis, small Chinese factories sometimes withhold salaries, because workers won't leave when they're owed money. Everything came to a head in July, when Mechanic Luo's wife was about to give birth. She was in his hometown in Hubei Province, and he told me that this would be their second child.

The bosses refused to grant leave. On July 27, the baby was delivered by C-section, and Mechanic Luo told the bosses that he absolutely needed to return, to help his wife recover from surgery. Finally, they agreed, but they balked on paying the back salary. That evening, when I took Mechanic Luo out for a celebratory dinner, negotiations were still in progress. In the end, the bosses paid one-third of what they owed him, and he promised to return within a week.

Later, the mother and baby traveled 21 hours by bus to Lishui. They shared the factory dorm room with Mechanic Luo, who proudly introduced me. I asked how the child's brother was doing; I assumed he was still in the village with his grandparents. But the man's face fell, and I feared that something terrible had happened.

"This is actually our first child," he said, dropping his voice. "When Boss Wang and Boss Gao hired me, I told them I already had a son, so I could ask for a higher salary. I didn't want to lie to you, but they were around when we were talking."

After two months, his wife took the baby back to her home province of Guizhou. At the Guiyang rail station, two women approached and offered her a ride. They led her to a minivan that contained two men. After they left the city, she noticed a strong chemical smell and felt disoriented. The next thing she knew, they had robbed her of $120 in cash, her cell phone, and her earrings. Afterward, the baby was unusually sleepy, and the mother called Mechanic Luo in a panic. He told her to wash the child immediately. Since then, the baby had seemed healthy. Not yet four months old, he'd lived in a factory, served as a pawn in salary negotiations, and been drugged and robbed. Mechanic Luo had named him Wen, "cultured," because he dreamed of his son becoming an educated man.

The 15-year-old at the factory had dropped out of school after the seventh grade because her family needed money. Nobody at the factory seemed to mind that she had initially used her older sister's name. In China, where the legal working age is 16, it's common for workers to register with false IDs. In fact, the sister ended up working there, too, as did the father. Their name was Tao, and they had migrated from Anhui Province. Unlike most workers, they lived in a rented room nearby instead of the factory dorm. During the summer months, when the plant verged on failure, the Taos were rarely called in to work. But then Boss Wang's courtship of customers finally began to pay off. By August, the factory had five steady buyers. In September, 11 months after the factory had been designed, it turned its first monthly profit. By October, business was good, and the Taos were working long hours every day.

The older sister sorted bra rings on the Machine's assembly line, while the 15-year-old, whose name was Yufeng, handled underwire. She placed the curved wires onto a spring that was sent into an industrial heater. The job paid by the piece, and on a good day Yufeng could finish 30,000 wires, for a wage of $7.50. She was quick, reliable, and completely self-possessed. She talked back to Boss Wang like nobody else. One evening, when a co-worker celebrated her 16th birthday, Yufeng used the occasion to bully her foreman into drinking shots. Chugging Sprite to his Double Deer beer, the girl was relentless. "Drink! Drink! Drink!" she shouted, turning to me and the other men at the table. "Toast him! I want to get him drunk so I won't have to work hard tomorrow!"

Yufeng, like her sister, gave all her earnings to the parents. Her dream was to open a shoe factory someday; she told me that if she became successful, she'd build a three-story home in her grandparents' village. When I asked about the grandparents, the girl's eyes filled with tears, and then I didn't ask about that anymore.

By November, the Machine was turning out 100,000 rings daily, and the bosses had installed a bigger assembly line for underwire. But like everybody in Lishui, they had gambled on rapid growth, hoping to expand to 60 workers by the end of the first year. In fact, they had only 20, and the building was three times bigger than necessary. "It's still too early," Boss Wang grumbled, when I asked about Lishui's development. "If we have to get a part, or do anything related to machinery, we have to go all the way to Wenzhou."

That month, the bosses decided to relocate the factory. The decision was instant; there was no consultation with Mechanic Luo or anybody else. Boss Gao found two available buildings in the marshlands north of Wenzhou, and then they consulted the feng shui expert. His advice was unequivocal: November 28 was also the eighth day of the lunar month, and you can't do better than double eights.

Most workers decided to move with the factory, but the Taos' situation was complicated. The mother ran a small dry goods stand nearby, and the youngest son was enrolled in a local middle school. If the father and daughters kept their jobs, the family would be divided. At the factory, the decision became a topic of daily discussion.

"You should be independent by now," Mechanic Luo said to Yufeng, one day at lunch. "You don't have a bank account, do you?"

"No," she said.

"You're still giving all your money to your parents!"

"They need my help."

"It helps more if you learn to be independent."

The man scoffed that he had first left home with only six dollars in his pocket. The way he told it, Yufeng was just another overprotected 15-year-old working 50 hours a week on an assembly line. But the father refused to leave the decision to his daughters. He insisted they would leave together—but only if the salary was renegotiated.

The night before the move, the bosses finally offered a raise. The father asked for more; the bosses dragged their heels. No one was willing to meet directly, so Mechanic Luo carried messages back and forth. At eight o'clock, he visited the Taos' mud-walled room. The girls went outside; the men lit West Lake cigarettes. The father said, "I'm not willing to move unless they make it worth my while."

"I know," Mechanic Luo said. "And I don't want to train new workers."

The mother said, "Maybe we should just send them to work in a shoe factory."

"Don't talk about that yet," the father said. "We need to figure this out first."

He demanded the same wage for everybody: a guaranteed 127 dollars a month, plus overtime, and six dollars in living expenses. Mechanic Luo returned to the bosses, who cut the expenses in half—a difference of three dollars. The father didn't reply, and that offer was still on the table when the night ended.

That fall, Lishui applied to add another 13.5 square miles (35 square kilometers) to the development zone. The expansion would require an investment of almost 900 million dollars, most of which would come from bank loans. They planned to double the city's population by 2020. With energy demands rising, the Tankeng Dam was being constructed in the mountains south of Lishui. In preparation, 50,000 people were being relocated from 10 towns and 80 villages. I had watched the final evacuation of Beishan, the largest town, on October 25 of 2005—an auspicious date according to the feng shui experts. There were good days for everything, even abandoning your hometown. Families packed flatbed trucks full of furniture; they unloaded in eight new resettlement communities that had yet to be finished. In Youzhou, Chen Qiaomei told me she'd had trouble finding her apartment, which had no windows yet. "They all look the same!" she said.

When I talked about Lishui's factory zone expansion plans with Director Wang, he acknowledged that approval for such projects was becoming more difficult. The central government feared a real estate bubble, but he remained confident. "We're applying to develop an area where the land isn't good for farming," he explained.

On his office wall hung a map of the proposed expansion—future roads, industrial blocks, waterworks. "We'll have to move more than 400 mountains and hills," he said. He invited me to return in January, when his boy would be home for vacation. The son of the former tank driver was at the University of Auckland, studying international finance.

They moved the bra-ring factory in one day. The bosses hired a forklift, four flatbed trucks, and seven laborers. Mechanic Luo disassembled the Machine into three parts; the finished bra rings were packed into 94 boxes. They removed everything of value, even the carpet and the lightbulbs. A year earlier, they had ordered ten-dollar doors, and now they took them off the hinges.

At three o'clock, the Tao sisters showed up with their bags packed. Their father, it turned out, had found a better-paying job for himself at a nearby factory that produced synthetic leather. He had arranged it days ago, in secret; the insistence on staying with his daughters turned out to be a negotiating ploy. There weren't any tears at the factory gate. The last thing the father said was, "You need to dress warmly. It's going to get cold, and you'll get sick if you're not careful. If you're sick, you'll have to spend money on medicine. So dress warmly, OK? Goodbye."

Two days later, I drove to the development zone, past rows of finished billboards: Amway, Haishun Steel Structure, Fengchang Steel Hooks. The former Yashun factory was unlocked. Inside, bra rings were strewed everywhere—bent rings, dirty rings, broken rings. There were crumpled cigarette packages and used rolls of tape. An empty diaper bag. A wall calendar frozen at November 22. A good luck charm with Mao Zedong's face on one side and a bodhisattva on the other. And throughout the dormitories, on the white plaster walls, graffiti had accumulated over the months. Next to his bed, one worker had listed numbers: winning lottery combinations. Another had inscribed, "Find success immediately." Others wrote:

"Reflect on the past, consider the future."

"Pass every day happily! A new day begins from right now!"

"Face the future directly."

"Leave the world."

"A person can become successful anywhere; I swear I won't return home until I am famous."

A cold wind blew against the windows. Outside, I heard neighboring plants—the rattle of glassmaking, the rumble of plastic molds, the pneumatic hiss of water heaters being produced. But there wasn't a single human sound, only the silent voices on the walls of the abandoned factory.