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Growing pains on road to urbanization

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Staff are hard at work on the factory floor at Truly Semiconductors, arguably the largest employer in Shanwei. It is a major LCD screen producer. [China Daily]

This growth is not only a result of Zheng's relentless courting of investment, however. Central and provincial authorities are implementing policies designed to help the country's interior develop, including major investments in infrastructure and transportation.

"The most important reason Shanwei didn't develop previously is that the province's transportation infrastructure did not do a good job of connecting us to other places - Guangzhou, Fujian, the Pearl River Delta," said Zheng Jifen, director of Shanwei's city planning bureau.

Today, China is in the process of constructing a 120,000-kilometer national rail network, and plans to lay almost 85,000 kilometers of highway by 2020.

As a part of this broader effort, several new transport links are being built to connect Shanwei to Shenzhen, provincial capital Guangzhou and other cities in the region. When completed next year, travel time between Shanwei and Shenzhen will be cut to just 50 minutes.

The Guangdong government is also pouring money into its own urbanization policy. Dubbed the "two shifts", the program aims to encourage companies and suppliers to move labor and industry from major cities in the Pearl River Delta to less developed cities, like Shanwei.

And at the most recent National People's Congress in March, Premier Wen Jiabao announced that Beijing would gradually relax its restrictions on the hukou household registration system for migrant workers moving to small- and medium-sized cities, enabling them to eventually receive the same benefits and social services as city residents. In Shanwei, these polices have resulted in perhaps the most typical of government-directed development schemes: A special economic zone that Zheng Yanxiong hopes will provide a stable nucleus for future growth.

The Shenzhen and Shanwei Cooperation Industrial Park will be an entirely new city on the outskirts of Shanwei, near Shenzhen, explained the mayor. It will include subsidized housing for the expected thousands of workers, schools and stores, and will be located near a highway running directly to Shenzhen.

And in perhaps a new twist, its residents, expected to be mostly migrant workers and their managers, will all be issued local hukou.

"There was a labor shortage in Guangdong this year," said Zheng Yanxiong, "but if we can get migrant workers to settle down in Shanwei, we'll eventually have a stable supply of cheap and skilled labor that will attract investment."

The park is funded by massive subsidies that the Shenzhen government is required to provide under the "two shifts" policy, as well as bank loans and investments from participating companies, including Japanese electronics maker Toshiba.

However, whether it will actually succeed remains unclear.

"It's easy to say that the answer is to have a big factory," said Woetzel at McKinsey. "You may well have a big project, but it's much less likely to be implemented successfully. There are lots of white elephants scattered around the Chinese countryside."

For Zheng, though, at least one thing is certain: "In my next position, I am definitely not going to be a mayor. It's just too tiring."

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