If China's north-east with its hulking state-owned industries is a monument to socialism, Zhejiang province, hugging the coast just south of Shanghai, is its capitalist heartland. Combining an entrepreneurial trading heritage with a meticulous division of labour, Zhejiang's family-controlled businesses are taking global markets by storm. In the city of Wenzhou, 3,000 small firms have clubbed together to concentrate on making cigarette lighters some specialising in components, some in final assembly. Production is flexible, fast and competitive: in 2002, Wenzhou made 750m lighters, the equivalent of 70% of world demand. Companies elsewhere in Wenzhou manufacture nothing but pens or low-voltage electrical equipment. Cixi is a base for kitchen-equipment makers, and Datang turns out 8 billion pairs of socks a year from 8,000 factories-one-third of all socks sold worldwide. Other parts of the province make vast quantities of shoes, toys ties, watch movements and Christmas decorations.
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