RTÉ Foreign Editor Margaret Ward looks at how China is moving up the value chain from low cost manufacturing to high tech industry.
It took Zhang Haowei three days to travel by train from a remote village in Gansu province to China's gold rush town, Shenzhen. Although he now shares a dormitory with nine others workers he doesn't regret it.
'I came here because the economy is growing very fast here. This is a young persons town,' he said. 'I can earn around 1500 RMB (€135) a month if I work hard, that's more than I would get back home.'
As the sun rises Zhang and his roommates take turns brushing their teeth at their one wash basin.
The room is tidy but spartan. Iron bunk beds are lined up in two rows, cheap suitcases are stacked in a corner. 600 people live in the dorm at this plant which makes security cameras and other specialist camera products like baby monitors.
Shenzhen is full of factories like this. Migrants flock here from all over China for a chance to escape rural poverty and experience urban life. The huge number of willing workers keep wages low and consumer goods cheap.
But China is no longer Asia's lowest cost manufacturing base. There are reports in the newspapers here that Olympus, which makes cameras, will close one of its two plants.
Where are they going? Vietnam.
China knows it needs to move up the value chain, not just in manufacturing but in services.
At the other end of the country in the city of Dalian, the energetic city administrators decided some years ago to make their city the software outsourcing centre of China. They've been to Dublin and they liked what they saw.
There are now 40,000 software workers, many of them in a high tech park where the buildings are occupied by IBM, Microsoft, Accenture, HP and 600 other companies.
Dai Yulin, of Dalian's municipal government, told us that he learned three things on his trip to Ireland: invest in education, have a plan to move up the profitability chain from low-end to high-end products, and be open to overseas students and investment.
And he says when he came back he implemented what he learned, focusing in particular on talent training.
Dai Yulin is also the point man for the city's engagement with Intel. The company is investing $2.5bn in a FAB facility similar to their plant in Ireland, its first in Asia.
On the outskirts of Dalian, a four square kilometre facility is taking shape and will open in 2010.
The city is ramping up its education facilities so it can supply Intel with the right kind of graduates.
'Intel settling in Dalian will have a clustering effect', says Dai Yulin. 'They'll bring their upstream and downstream industries with them.'
So what does all this mean for Ireland? While no one is suggesting that Intel is about to close down, it's clear that it's not just Eastern Europe that's been looking at the Irish development model.
Irish policy makers are doing the right thing by focusing on R&D and innovation. The thing is everyone else, including China, is doing the same thing.
After spending time in Shenzhen and Dalian, it's hard to see a future for any but the most specialised manufacturing in Ireland. For now China's quality problems are affecting the country's reputation. High-end companies, for example those in the medical/pharmaceutical area, probably wouldn't put all their eggs in one basket here for a host of reasons.
Ireland and the rest of Europe will lose more jobs to China over time, but will need to find new ways to sell things to China that it needs and wants. Right now those things are education and technology.
What's abundantly clear is that China has a plan. The trajectory may not be linear and smooth, and social and environmental problems could derail progress, but the country of toys and trainers is aiming higher every year.
- Margaret Ward
