Next up in the Doing Business in China
series (previous entries here): a look at China's factories.

What I like about this segment (not including the load of industrial goo slathered on my hair by a well-meaning Shanghai stylist just before filming, but I digress) is its emphasis on the elements other than cheap labor that have been crucial to China's manufacturing success. Yes, $10-a-day factory wages give Chinese producers a big edge. As I explained in the magazine two years ago, they also affect the way the whole production process is planned and laid out. Eg: Some functions that would always be mechanized in the US, Japan, or Europe are done by hand in China, because the cost of the machines isn't worth it. This has its disadvantages, yet it also can allow Chinese factories to switch from product to product much faster than a more "modern" facility could.

But there are a lot of places with much cheaper wage rates than China now. The Chinese advantage over such places -- Cambodia, Bangladesh, much of Africa --  is the combination of relatively cheap labor and absolutely superb production infrastructure. Ports, industrial zones, highways headed to airports, whatever else it takes. This clip mentions the issue; the whole series goes into it at some length, and gives you an idea of what these factories look like on the inside.