China has become the world's fastest growing big economy in large part because of its huge volume of manufactured exports to America, Europe and Japan. VOA's Barry Wood got insight into China's heavy involvement in the global economy by visiting an Austrian-owned shoe factory in the booming southern city of Shenzhen.
A local man looks at shoes from Giorgio Armani on display in the show window in Shanghai, China
At peak periods there are 800 women and a few men working in this three-story shoe factory in Shenzhen. The company, Emper Industrial, manufactures woven and knitted leather shoes for women. They are sold primarily in Europe under the high-end brand name Armani.
Austrian entrepreneur Helmut Widdek has been involved in the shoe business in Asia for over 25 years. He has operated this factory in southern China for 15 years.
"Our aim is here to make a product in a way where the labor intensive part is made in China and the final product will be finished in Europe. That is the key," he explained.
For the shipments now being made, only the soles of these fashionable shoes will be added in Europe. Under European Union rules they will be labeled as made in Italy.
Mr. Widdek keeps stacks of leather hides purchased in India in his first floor warehouse. This extensive inventory allows the company to respond quickly to buyer requests. An order received at the beginning of the week can be ready for air shipment from Hong Kong to Italy within seven days. This division of labor, an essential element of globalization, says Mr. Widdek, is typical.
"We do the same as the car industry," he added. "We make the components and they put it together in Europe. Do you think a leather seat of a BMW is made in Germany? Definitely not. The steering wheel, I know, at the moment in made in Thailand."
The workers live in large dormitories adjacent to the factory. The young women come from the interior province of Sichuan. They work on long-term contracts. Their pay, says Mr. Widdek, is above average.
"If a good girl doesn't earn $200 per month, it's not good enough," he noted. "You have to consider also that we pay for the food, for the dormitories. This is on top. We are not charging the people for hot water, not charging for food. We charge them one renminbi for food, because otherwise they throw the food away. So we charge them one renminbi as a gesture."
Seated at a bench beneath an overhead light and a paddle fan, 26-year-old Tu Kerong, is typical of the 200 workers in the shoe weaving department.
Ms. Tu says she works 40 to 45 hours per week and is satisfied with the labor conditions.
Mr. Widdek rejects suggestions that a company like his has taken jobs away from Europe or America. He is proud that his is the only factory anywhere doing this kind of work. Europeans, he says, are no longer interested in hand-making shoes. He points out that retailers typically sell his shoes at prices several times higher than what they have paid to his company. Labor costs, he says, represent no more than seven percent of the retail price of a high fashion women's shoe.