Reporter's Notebook: Inside a Chinese Factory Town

SONGXIA, China Nov. 15, 2010— -- Our journey to the factory towns south of Shanghai began early in the morning, just as the day does for the estimated 140 million Chinese workers who have moved away from their families and their homes to go work in the factories closer to China's east coast.

During our trip south, the billboards were more telling than any city sign. On one stretch of highway, there are countless billboards for zippers. There are entire towns here devoted to manufacturing one product.

We visit Songxia, China, two hours south of Shanghai, where much of the town has devoted itself to manufacturing umbrellas. The large factory sits among others like it, with a vast warehouse.

And right beside the factory, sits a dormitory for workers. They live in small rooms they now call home. Many of the workers share these rooms with others. It's a trade-off for what they say is a job and a chance to send money earned home to their families in rural China.

On the fourth floor we meet Chang Yuna, 22-years-old and about to start her day at 7 a.m. She left her family, hundreds of miles away in Chengdu. She told us she brought nothing but a small bag of clothes and a prized wooden jewelry box when she left home to come work in the factory. She is like many of the younger factory workers who now say they have no plans to return to rural China, a generational shift from their parents and grandparents before them.

Her daily routine begins with a simple five-minute walk, past the guard, beside the factory buildings and into the towering doorway where she makes her way to sewing machine number 52. With her bosses with us, she tells us she works eight hours each day, five days a week and that sometimes there is overtime. She makes $14 a day, $270 a month. Half of that money automatically goes home to her family.

"Even though these factories pay wages that seem ridiculously low to us they can quadruple the wealth of a family in a year," Ted Fishman, author of the book "China, Inc." told us. "Every person who walks into a factory from a farm is taking their family outside of an economy in which there virtually no money changing hands, subsistence economy into the modern industrial economy. So a wage of a beginning factory worker could quadruple, quintuple the wages of an entire family."

Chinese Factories Discovering Labor Shortage

She gets a daily lunch at the factory and her room is paid for by the factory, but there is no health insurance here. She is just one of dozens of workers we see at sewing machines and assembly tables at this umbrella factory. The factory tells us each worker will sew 40 umbrellas an hour, 1,600 a week. By year's end, that's 80,000 umbrellas a year from each worker like Chang. More than half those umbrellas will be sold in the United States. The factory chairman Lu Xinmiao reveals to us one of their biggest clients is Costco.

We continue our journey further south. Two more hours on the road finds us in Datang, China, where we visit a factory that produces socks.

We meet Chen Guifang, who has been working here for four years now. She runs eight machines in the factory, working up a sweat on her forehead, and carefully measuring each sock.

Her husband, Chen Guilin works in the factory too. His job is in the shipping department. As we talk with his wife, she pays a visit to Guifang carrying with him their prized image on the cell phone they share. It is a picture of their son, Chen Xinglong. He's only 9-years-old, but as so many parents do here, they left him behind to be cared for by his grandparents. When we ask if it is hard to be apart from their son, the father answers no and explains to us they are able to get home to him once a year for the Chinese New Year.

With China's growing economy we notice something else here. There are empty stations among the rows and rows of machines that produce the socks. The head of the factory, Zhejiang Qingyi Knitting Company, tells us that if they could, they would hire 200 more workers today. He tells us that there is now more competition for workers. Some estimate it will take another 45 million workers from rural China within the next five years just to keep up with the demand for product. Here in Datang, Lu Xinmiao has given his employees 20 percent raises to make sure they stay. Cheng now makes 2,500 yuan a month, equal to $357.

Life Inside a Chinese Factory

"The young people who come to factories the first wave of them came, they came with a sense of destiny, it's for my family, it's for my country," said Fishman. "Now when Chinese workers arrive in factories or find themselves in factories over a number of years they say, 'We have toiled so hard. Our wages are going up, but they are not going up enough to stay pace with the cost of living or our expectations. When do we start getting our bigger share of this miracle?'"

On our journey further south, we discover cargo trucks, parked right in the middle of the highway – stretching as far as the eye can see. They are parked there waiting to pick up their goods. At the central markeplace in the city of Yiwu, we are told 1.7 million different products are shipped from this region. We discover endless vendors with buttons, zippers, and Christmas toys that will be sent to the United States.

The workers were eager to show us their talking babies, and their life-size versions of Santa Claus that will likely land in American front yards.

In this economy, Christmas has come early with millions of goods headed to the United States.

Among them, those umbrellas we discovered along the way. More than 300 more were sewn by Chang Yuna today, as the sun sets on another shift at the factory.