Today, a city of nearly five million people, Shenzhen, sits at the border. The hinterland behind Shenzhen, the Pearl River Delta, is the heart of the fastest growing industrial zone in the world, the Chinese province of Guangdong. This is the landscape that produces two-thirds of the world’s photocopiers, microwave ovens, DVD players and shoes, more than half of the world’s digital cameras and two-fifths of its personal computers. Guangdong’s business is to make things. It sucks manufacturing from Europe and North America and other economies with high wage rates, cheapens it, increases it, then ships it by container to overseas markets. The factories here bear no relationship to the ones I knew thirty years ago in Shanghai. It is as different as Manchester in the 1840s was from rural England in the eighteenth century and to come here is to feel a little of what Friedrich Engels felt when he set out to describe Manchester, the world’s first uncompromisingly industrial city. Here too, the visitor marvels at the industrial energy and is appalled by the degrading conditions in which the workers live. ‘In this place,’ as Engels put it, ‘the social war, the war of each against all, is here openly declared.’

When had it begun to change? In fact, not long after I first saw it. In 1976, Mao died and his widow was swiftly arrested. By 1979 her old enemy, Deng Xiaoping, was moving China in a new direction. Deng was, as Mao had always maintained, a man bent on taking the capitalist road. Unlike Mao, he had travelled—as a young man he had worked in the Renault factory in France—and he wanted to liberalize China’s economy and open it up to the world. He rationalized the labyrinthine and bureaucratic foreign trade system and gave the southern provinces of Guangdong and Fujian the freedom to pursue their own foreign trade and investment without having to go through Beijing. In 1980 he set up four Special Economic Zones for foreign investors, three of them in Guangdong. Hong Kong and Taiwanese businesses began to set up factories, encouraged by the tax breaks and the fact that labour costs in Hong Kong were eight times as high. Across the world, an old dream began to stir in the heads of businessmen—that their companies might sell into what was potentially the biggest market in the world. What they had still to discover was that China would put many of them out of business.

The factory was in Bailijun Village in Pingfu County, near Shenzhen. Its Hong Kong owner had moved his business here in 1984 but it was still a relatively makeshift affair. He employed around 200 workers to turn out semi-precious jewellery for the lower end of the international market. There were local regulations, including health and safety laws, but nobody bothered to enforce them. The boss was often around on the factory floor. ‘He didn’t even have a car in those days,’ Wu said. ‘By 1993 he had four—one of them was a Mercedes Benz.’

Wu was earning a hundred yuan a month and spending sixty on his living expenses. At first he planned to make money for a few years then return to the village, but gradually he got used to urban life. In 1992 his wife joined him. They lived apart for the first two years, each in a crowded dormitory room shared with eight to ten other workers, before the factory gave them permission to live together. They had left their two children behind in the care of Wu’s parents. They saw them only once every couple of years, after they’d saved up the time and money for the journey home. In the meantime they wrote to them. Each reply took a month to arrive.

The men who crowded into Wu’s room no longer worked for Lucky Gem. Wu pointed to a small man who, like the others, had slipped off his sandals at the door and who was now sitting barefoot on the concrete floor, leaning against the wall, his legs stretched out in front of him. His face was pale. Liu Huaquan, Wu said, was the first to fall ill. Liu acknowledged Wu’s introduction with a smile—a perverse pride in being the first one afflicted. It was 1999 when his symptoms—breathlessness and coughing—first appeared. They were diagnosed as tuberculosis and for two and half years he paid 300 yuan a month—nearly half his wages—for treatment. But his health continued to worsen and when he finally sought a second opinion at the Guangzhou Occupational Diseases Centre, he was told he had silicosis.

‘I had never heard of it,’ Liu said. ‘They said it was an occupational disease and I shouldn’t work any more. They said I should get compensation from the factory. I wanted to work. I still do. I have a wife and two children. But now they ask you for a health certificate and I can’t get a job anywhere.’ His weight had dropped from 121 pounds to ninety and he could barely climb the stairs. Silicosis is incurable, but the right treatment can slow the disease’s progression. Liu had received some compensation from a social insurance fund but he could not spend the money on the treatment that might slow his decline because he fears that his wife and children would be left destitute. His only hope was somehow to force the factory to compensate him. ‘I never thought this was going to happen,’ he said. ‘I thought I would work for a while, then go home and set up a business.’

From the moment that Deng began to move China towards the market, the character of the Chinese factory began to change. The balance sheet might be improved if the burden of the factory’s social obligations and surplus labour was shed, but how could this be squared with the state’s ideology? In 1979 Deng made a gesture to Marxist theory by announcing that China was not, after all, in the advanced stage of socialism but in the primary stage. Having said this, the way was open for factory workers to be switched from employment arrangements that offered lifetime security to fixed-term contracts with reduced or non-existent welfare provisions. By the early 1990s, the government was talking about bankruptcy and closing unprofitable enterprises.

For China’s factory workers, the shift was cataclysmic. Since 1990, 30 million of them have been laid off from state-owned enterprises with a pay-off of 200 yuan (less than thirty dollars) for every year of service, and no continuing medical insurance or pension. If they wish to stay in their factory housing, they must find the money to buy it. Once a privileged elite, they are now near the bottom of the heap. Their factories, once the centre of their lives, have been stolen from them.

As I left, I asked Wu to show me the Lucky Gem factory, less than a quarter of a mile away. We drove cautiously past it, trying to avoid the notice of the security guards. Wu directed us to the back where he pointed out the third-floor windows behind which he used to work. Thick dust caked the glass and lay in drifts across the window ledges. I asked Wu and some of his old colleagues in the car how they thought the government viewed factory workers in China. Wu looked at me as though I had descended from Mars. It was then that he said, ‘In China, it is a death sentence to be a worker.’

[...] In the old days it was argued that industrial action was a counter-revolutionary act under the dictatorship of the proletariat. Today, the prohibition is the bald expression of a fearful, authoritarian state that dares not allow its aggrieved industrial workers the right to organize. There they were, several hundred workers in the centre of Xianyang. Most were women. They sat in two semicircular arcs to either side of a factory entrance gate over which hung a large sign that read tianwang textile company. Smaller, hand-lettered signs below it proclaimed protect workers’ rights and give us back the funds we worked hard for.

A cheerleader with a megaphone was leading a chant that, as I watched, gave way to a playful rendition of the childish Maoist anthem of the Seventies—’I love Beijing’s Tiananmen’—and then moved on to the ‘The Internationale’. Uniformed and plain clothes police stood by, waiting for an identifiable transgression that would permit them to use force against a group of female factory workers who were unhelpfully singing socialist and patriotic songs.

Another woman offered a clean tissue as she began to explain their grievances. Their factory had been sold, she said, and new contracts had been issued to the workers that would slash their wages and remove their pensions. Experienced workers were being asked to accept a probationary period at less than a quarter of their normal salary and nobody knew whether they would have a job at the end of it. When they had seen the contracts, all 7,000 of them had downed tools. Now they had resolved not to give in until their grievances were addressed.

Back on the street, I watched a middle-aged man slowly dip a paintbrush into a pot of vermilion paint and methodically paint a long message of protest on the window of a clothes shop, we demand the minimum, he wrote, in characters so regular that I wondered if, in happier times, he had been the man who did the notices announcing price reductions or the arrival of new lines. [...]

The strikers at the Tianwang textile factory had also expressed their indignation in terms of betrayed idealism as they chanted the slogans of the Revolution and sang ‘The Internationale’. Their solidarity with each other, for as long as they could maintain it, was the last expression of a shared belief that Revolutionary China had, indeed, belonged to the workers and peasants. Now they didn’t know when they had been betrayed. Had it never been real, their ownership? Or had it once been real and now was real no longer? These things could be debated. An incontestable truth, on the other hand, was that someone had stolen the factory they thought of as theirs, banishing them to the outer edge of a society that showed no sign of making room for them.

Then in the early 1990s another model train maker called Bachman (originally an American company, now owned in Hong Kong) began to make miniature British locomotives. In the shops, they were priced the same as Hornby’s, though they were made in China. And, as Hornby could not help but notice, the quality was ‘demonstrably better’. Hornby was struggling to survive by this time and made the obvious decision. In 1995, it closed its factory in Margate, Kent, cut the Hornby workforce in Britain from 550 to 110, and moved production to China.

The quality of its models didn’t suffer—if anything, the reverse—and five years later it was able to buy up other model-makers who hadn’t made the move in time. In 2004 the company expanded again by purchasing the leading model train-maker in Spain and the assets of a defunct Italian model-maker. Both countries will in future be supplied from the factory in China. But who owns the factory? Not Hornby.

Like many much bigger and truly international brands—Nike and Reebok, for example—it has become a company that ‘doesn’t do stuff’, that is, it makes nothing. Instead it concentrates on brand management and marketing. It negotiates a price with its Chinese contractor, sends the designs of what it wants made to the contractor at his factory near the town of Dongguan in Guangdong, and waits for the results to arrive in England by container. Hornby has no share in the Dongguan factory although it now depends on it entirely for its products. You might say that the only manufacturing secret that Hornby still truly owns is the name of its Chinese partner. [...]