National Geographic : 1997 Mar
situated at the zone's western edge where a fishing village once stood. Analogic's assem bly room is a quiet place with only a handful of workers. They thread bundles of electric wires into tall metal cabinets, the brains of $500,000 magnetic resonance imaging machines, or MRIs, that are used in medical diagnoses. Analogic's manager, Tao DuChun, had been a research physicist in Beijing. "I was just writing research papers," he told me. "I didn't think that was very useful. Here I can make a real contribution to China." Tax incentives-no tax at all in the first three years and then rates substantially lower than China's 33 percent maximum- attracted the company. But taxes weren't the only fac tor. "If we had chosen Beijing as our site," Tao said, "we would have spent years obtain ing the necessary bureaucratic approvals. The people here got this factory ready for us in one year." No doubt freedom from bureaucratic inter ference also explains why a shop dealing in pirated music tapes and compact discs flour ished for a time in a highly public place in Shenzhen-above the McDonald's on busy Changan Street. "You could buy a Michael Jackson disc for about one dollar," a young woman told me. "A legitimate disc would cost about $20." After piracy became a hot trade issue between the United States and China last year, authori ties finally closed the shop, along with a dozen or so Guangdong factories that produced ille gal tapes, discs, and software. FREE ENTERPRISE takes another guise as night brings crowds to restaurants and nightclubs. Touts hand out cards adver tising "massage parlors." But prostitution isn't the most serious offense that has followed the flow of cash to Shenzhen: Several entrepre neurs have been kidnapped for ransom. "To be a businessman here involves some risks," acknowledged Xia Chunsheng. "In the evening I don't go to a public place alone." Xia travels in an expensive German car with bulletproof glass and a chauffeur who dis creetly doubles as a bodyguard. Xia and his three brothers transformed their small lighting-fixtures business into a major company, Gold Lighting. The name could refer to the luster of profits, if I judge by such Gold undertakings as providing lights for Shanghai's airport terminal and selling $5,000 crystal chandeliers from France to Shenzhen's tycoons. Xia wears tailored suits and enjoys expen sive restaurants. In one of them we worked through a lunch of eight dishes, including slivers of lobster heaped in a boat-shaped bowl of ice. Afterward I asked him what the rela tionship of Shenzhen and Hong Kong would become after the handover. "Shenzhen will catch up economically," he said. "These two are like one reservoir, and the border is a dam between them. The water on the other side is high, and here it is shallow. Once we break the dam-the border-the water will be at the same level on both sides. There will be even more development in China because land costs are still four times higher in Hong Kong." This assumes that hard-liners won't take control of China and restrict capitalism after Deng Xiaoping, who is 92, passes from the MADE IN CHINA Scoring points for China's 40-billion dollar export market to the United States, an assembly line of women in Zhong shan glue sole after sole onto Reebok basketball shoes. With the real comes the fake. In a gesture to appease American trade offi cials, heavy machin ery crushes pirated copies of mostly U.S.-made videos, software, and CDs (right), all confis cated from vendors in Shenzhen. Says Robert Holleyman, of the Business Soft ware Alliance, an antipiracy group, "Sadly, it's just the tip of an iceberg."