SPIEGEL Special: Globalization, the New World Cheap, Cheerful and Chinese?

China’s overwhelming ambition is to become an economic superpower. Everything takes second place to this goal, not least the well-being of the people laboring toward it. They earn little and have even less say. Yet waves of willing workers continue to deluge the country’s industrial regions.

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Morning roll call at the Yuanda air-conditioner factory in Shanghai.

Morning roll call at the Yuanda air-conditioner factory in Shanghai.

The global factory is gearing up for a change of shift. The streets of Dongguan are still relatively deserted -- filled only by the rising heat and swirling dust. Trucks rattle along the multilane thoroughfares, thousands every hour. They keep the supplies coming for the plants that line the streets, mile after mile, like gigantic military compounds.

Then, suddenly, Dongguan explodes into life. It's the same bustling picture every day, morning and night: Workers, most of them women, stream in from every direction, with uniforms in every color of the rainbow. Laminated company IDs dangle from their necks -- IBM, Siemens, Nokia, Duracell, Sanyo -- to name but a few of the major international brands that have set up shop here. 

Most of the workers look like schoolgirls. Holding hands, some are returning to their hostels exhausted, while others dutifully head off to the night shift. Outside the factories, the flags of the world have been hoisted to announce where the employers come from and what their employees are producing: cables for Germany, batteries for the United States, computer components for Japan, cellphones for Finland, clothing for France, toys for Hong Kong, shoes for Taiwan. There is almost nothing that this city of 1.5 million and its roughly 5 million migrant workers cannot supply.

Dongguan is only a small part of the Pearl River Delta Economic Zone, which is booming like scarcely any other region on the planet. Export plants are mushrooming from the red earth all along the highway that leads to the nearby industrial center of Shenzhen. Here, as everywhere in China, international corporations have turned the battle cry of Karl Marx and Friedrich Engels' 1848 Communist Manifesto, "Workers of the World, Unite!" into its opposite: "Producers of the World, Unite!"

Where communism meets capitalism

Here, in China, nominally still communist but in reality a hub of unbridled capitalism, the corporations of the world have found a bottomless reservoir of cheap -- and eager -- workers. Here they can operate largely unfettered by all those niggling social benefits that, from a management perspective, make products so prohibitively expensive: high wages, well-paid overtime, occupational health and safety regulations, maternity leave, free trade unions, and the right to strike. 

Like many other German companies, the electronics producer Wickmann from North Rhine-Westphalia knows how to make the most of this situation. Some 200 Chinese workers have the company logo -- "Weiwen Dianqi" in the local language -- emblazoned on their light blue jackets. For 500 to 700 yuan a month, roughly €48 to €68, they produce electrical fuses: nine and a half hours a day, six days a week. Overtime pays 3.5 yuan per hour. "It might actually be less," says one worker, "because we don't really know how our wages are calculated." 

They can rest assured that the company calculates very carefully. Wickmann plans to relocate its production altogether to China by the middle of next year. At the main plant in Germany, which still employs some 240 people, the first will soon be getting their marching orders. The company says the high cost of production in Germany and the rising value of the euro against the dollar make products 40 percent more expensive on the Asian market. "We can't absorb that kind of shock," managing director Matthias Huber recently noted. 

The new El Dorado for German craftsmanship is located in a small alleyway in Changping. Only a village a few years ago, it is now part of Dongguan's urban sprawl. At the end of the street, close to the pink-and-blue-tiled Wickmann plant, stands the drab factory hostel. 

Migrant workers or slave workers?

Despite the wretched conditions, the German company is considered almost exemplary in this Chinese neighborhood. There are certainly worse jobs in south China, much worse. At Tyco, a U.S. company across the street, the work is so grueling that after just three days on the job, four young women from Hunan packed their bags, grabbed their washing bowls and headed for the bus stop. "We're going home," one of them says, frantically counting out her fare.  

The four women belong to the roughly 120 million migrants who have moved south from poverty-stricken rural provinces like Sichuan, Hunan or Guangxi in search of work. They were prepared to sacrifice their youth and health, but not under these conditions. 

Their dream of a better future has vanished now, as has the 1,000 yuan they paid a job broker. They could have earned 800 yuan a month, including overtime, for soldering wires onto small circuit boards. "But the work is too hard, especially on the eyes," a young girl complains. The minimum working age in China is 16. Though she is underage, she was forced to labor like the adults. "The pace was too much," she says. 

The four Chinese women are leaving. But, all over the country, millions of other migrant workers continue to slave away. Their numbers are swelling every day: About 800 million Chinese live out in the rural areas, and an estimated one-sixth do not have work. 

They all want a piece of the prosperity that globalization promises to bring to their country. That's why they bow to the fate of wage slavery for a few years -- in hopes of a brighter future. Few of them have electricity or running water in their villages back home. They have watched neighbors spending their savings from the new jobs, first to buy television sets and then to build homes or open small restaurants and shops. A desire to share in the new affluence drives them into China's wealthy coastal areas. 

An economic power at all costs

The Chinese leader who initiated the biggest migratory wave in his country's history is omnipresent in the Pearl River delta: Deng Xiaoping. The Communist Party head, who died in 1997, smiles down from propaganda billboards as big as houses, cheering the huge country on to maintain his legacy. 

For his successors, Deng's teachings often come down to the single mantra with which he freed China from decades of ideological torpor in 1978: "It doesn't matter if a cat is black or white," Deng proclaimed, "as long as it catches mice." 

Deng's pragmatism powers the brute force with which the political elite surrounding President Hu Jintao are catapulting China's 1.3 billion people into the industrial age. China wants to become an economic power at all costs. And consign to the past the humiliations it has suffered from foreign subjugation since 1842. 

Personal well-being and environmental protection have fallen by the wayside during this patriotic leap into the future. Whether more than one million farmers are being resettled at the Three Gorges Dam, or an army of migrant workers is being redeployed from the fields into the factories -- what counts is "fazhan" -- the incessantly trumpeted "development." 

The strategy, which simultaneously cements the power of the communist leadership, is paying off with breathtaking growth that has reached an average annual rate of 9 percent. The reform course steered by Deng and his successors has lifted some 300 million Chinese out of abject poverty. Per capita income in China has quadrupled since 1990 to well above $1,000. 

The effects of this dramatic revolution are reverberating throughout the world. The abundance of cheap goods "Made in China" may well quicken the pulses of Western bargain hunters. But few consumers are aware of the price they will pay for this windfall: the loss of their own prosperity and, increasingly, of their own jobs. 

A free hand for employers

The Chinese economic miracle is working, thanks to investors like the Wickmann electronics company which can no longer afford German labor. In Dongguan, Wickmann's management has a much freer hand than back home. According to its workers, the company provides insurance benefits for white collar workers only -- a blatant violation even of China's social laws. 

"I don't know why," one young woman says. "Maybe you have to stay with them longer. Three years is what I've heard." But does anyone really care? 

The Chinese women at least have valid employment contracts at Wickmann: a luxury in the Pearl River delta. "Anybody who is laid off here can expect one month's base wages as severance pay," says one of the women in the company's blue uniform: "390 yuan" -- 180 less than the legal minimum wage. Wickmann grants its employees seven days off three times a year: to mark the Spring Festival and the national holidays on May 1 and October 1. But the women say that only three days of each week are paid. 

Wickmann Chairman Horst Hübner paints a different picture. "We pay the legally required minimum wage of 565 yuan. We insure 90 percent of our employees and provide paid vacation. We comply with the laws." 

Even in China, Dongguan has a reputation as a sweat shop. Not that workers automatically fare better in other areas. Such as Wenzhou, which produces some 75 percent of the world's disposable lighters. Or Yiwu in Zhejiang Province,where cheap Chinese workers churn out Christmas decorations and toys for western consumers. Including Germans. 

Or in Ningbo, with its mammoth garment factories. At Youngor, China's largest shirt manufacturer, some 6,000 seamstresses produce fashions for Pierre Cardin and Nike -- in piecework. At the BenQ factory in Suzhou near Shanghai, a workforce of 10,000 builds TFT monitors and other technical equipment for the Taiwanese electronics specialist. And then attaches the logos of HP, Thomson and other global brands. 

The hidden side of Shanghai's glitz

Booming Shanghai: The glittering facade of the world's factory

Booming Shanghai: The glittering facade of the world's factory

Western executives who fly in to China by the hundreds every day train their blinkered sights only on the glittering façade of this global factory. Yet a few yards away, in the backstreets of Shanghai's neon-lit commercial center, they could readily meet the true heroes of China's boom: modern-day coolies, who work their hands to the bone every day in the cement dust of construction sites and then collapse into bed exhausted every night. Or the children of migrant workers, who are forced to beg because officials deny them residency permits and thus the right to attend school. In Shanghai alone, half of the eight million workers are migrants.  

But western investors walk on by, oblivious to the squalor. Their attention is fixed on new production sites, where labor is even less of a cost factor. The number of businesses outsourcing production to China grows daily. A recent headline read "Rowenta vaporizes Erbach." The venerable brand from southern Germany's Odenwald region is planning to manufacture its low-end irons in China -- for a fraction of the previous cost. 

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