British firms follow old colonial footsteps in southern boom town celebrates

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The Independent Online
You can still find relics of another era scattered about Canton. On Shamian Island, by the Pearl River, the old colonial-era buildings and missionary buildings, Jardine & Matheson's godowns, and a clutch of former consulates are grouped in a foreign-devils cluster dating back to the time of the Opium Wars. In the Qing Ling market, you can buy everything from dogs and cats (for eating, naturally) to Mao badges and ancient sets of mah-jong.

Much in the city, however, has changed beyond recognition in the past few years. Yesterday, band music and flags in the city centre seemed to indicate that a festival was taking place. Which, in a sense, it was. Outside a skyscraper still shrouded in bamboo scaffolding, a sign proclaimed: "Welcoming our honourable guests to attend the topping-out ceremony of the Bank of America plaza."

New buildings are going up in every corner of the city. Canton (or Guangzhou, to give it its Chinese name) is turning itself into a boom town - with British participation.

When Michael Heseltine arrives in China today his mission will be to sell the UK to China, and China to the UK. The Deputy Prime Minister comes with 280 businessmen in tow, in the largest-ever British trade mission to the People's Republic. British businesses are key investors in Canton. The investment is profitable, if not glamorous.

A typical British presence is to be found on the fifth and sixth floors of a scruffy building in a special business zone, just outside Canton.

Newport (Guangzhou) is a wholly-owned subsidiary of a British electronics company, producing components used in telecommunications systems worldwide. The firm began with 20 employees in 1994. Now, two years later, it has 170.

At Newport, dozens of young women sit for eight hours a day, winding and threading components by hand. According to the general manager, Wang Wei Ping: "No machine has yet been invented which could do this job precisely enough."

Guangdong province (the province of Canton), is China's most prosperous region. Most of the women at Newport come from Hunan province, immediately to the north, which has seen a huge migration to Guangdong in recent years. The women live in dormitories, and see their families only once a year. If they stayed in Hunan, they say, they would not find jobs at all. "It's hard," says 18-year-old Qiao Huong. "But what can you do? I would like to return home, one day."

Just around the corner from Newport is another British investment - this time, aimed at China's own domestic market. Its success relies on growing Chinese affluence. On a greenfield site, the chemical company ICI has set up a huge joint-venture plant producing Dulux paints, with a Chinese minority stake. Here the emphasis is on high technology, with computer control at every stage.

After two years, annual production is valued at around pounds 50m; the number of employees has doubled to almost 300. Meanwhile, work has begun on a plant in Shanghai which will more than triple production.

The general manager, Lee Weng, who is from Malaysia, says the potential remains enormous. "Nobody knows how big the market is. We've just got no idea." China's 1.2 billion people are more than the combined populations of the EU, Russia, and the United States.

In short: gold fever. For the moment, both the British and the Chinese are pleased. But it is trickier to quantify the political fallout of greater commercial involvement.

China is still a repressive regime. Freedom of speech is non-existent. And yet many Chinese, while bewailing their lack of freedom, insist that they are in favour of foreign business deals going ahead. They hope economic change may lead to an opening-up of politics. In southern China many have stopped thinking about politics, and decided to focus on money-making. "Never mind the liberty, feel the wealth" could be a motto for the Cantonese.