The killing fields

It looks like a bizarre mirage. On a sweltering mid-summer's day, the sun beats down on an open-air market, dust and diesel fumes blow in from the nearby main road and for as far as the eye can see, the streets are lined with animal fur.

But this is no illusion. Step through the arched entrance of the vast new market in Chongfu, 150km south of Shanghai, and you see a carpet of thousands of furs - raccoon dogs, fox and rabbit - laid out to dry in the sunshine. The smell of animal skins and chemicals is overpowering. Motorbikes and trucks trundle back and forth past the furs. In shops lining the vast plaza, homesick traders from the mainland's far north sit playing cards listlessly, waiting for factory buyers to make an offer for the clusters of carefully brushed skins hanging on hooks. Outside, giant billboards hailing this once poor market town as China's Fur World, show five-metre-high images of blonde, western women swathed in fur coats against snowy Alpine backdrops.

In one of the dingy stalls, Wu Zhenyu, 55, describes the trade that draws him 2,000km from his home in Liaoning to a town where he spends two months at a time selling furs. 'We wait until the coldest part of winter, when their fur is at its thickest, to kill the foxes,' he says. 'When you kill them, the important thing is to make sure you don't damage the fur. Some farmers kill them by electrocution, but many others beat the fox to death with a bamboo stick.' Asked if he thinks beating the animals is cruel, he laughs and shrugs. 'People murder each other all the time. Isn't that cruel?'

Here, the price of an animal sold for its fur is pitifully low compared with the lavish price tag a fur coat commands in a Hong Kong boutique. For 600 yuan, you can buy a full fur of a silver fox, cut expertly from its body with the eyes and nose intact. The skin of a spotted mountain cat will set you back 260 yuan, and if you want to trim your winter boots or jackets, white rabbit skins are available for 18 yuan each. For fur lovers, it is a cut-price paradise. For animal welfare groups alarmed at China's rapidly expanding fur trade, it is a nightmare.

Once a rural backwater, in the past four years Chongfu has become the mainland's fur capital. Five hundred traders have set up shop in the town's wholesale fur market, the country's biggest. Within a few years, the number is expected to double. They are open year-round and last year, the market trade reached almost one billion yuan. The town's economy is booming, with garment factories - many Hong Kong-owned - setting up in the streets around the market and specialising in fur-trimmed coats and jackets.

China has long been dubbed the 'factory of the world', a heaven for companies needing anything made, from toys to car spare parts to clothing. Buoyed by the revival of fur in the fashion industry in recent years, the mainland is, according to estimates by business experts, manufacturing up to 80 per cent of the fur coats sold around the world. While countries such as Finland, Denmark, Canada and Russia have had fur farms for generations, Chinese farmers, sensing the lucrative profits for the pelts of minks and other animals, have turned their land into breeding grounds. The market in Chongfu comes to life in the spring, when traders swarm in from the northern provinces, carrying cargos of fur that can only be cultivated where the winter is cold enough to generate thick coats.

China is the fastest growing fur exporter in the world, but it is not just the scale of the fur trade on the mainland that concerns animal welfare groups, such as Peta (People for the Ethical Treatment

of Animals) and Animals Asia, they are also alarmed at the lack of regulations and the cruelty the trade involves.

'The problem is that China doesn't have an animal welfare policy. The animals have no protection,' says Jason Baker, Peta's Asia-Pacific director. 'There is blatant cruelty in fur farms across China ... There aren't any good fur farms anywhere in the world, but in China they are exceptionally bad and our evidence suggests they are getting worse.'

Baker believes part of the problem is a lack of desire on the part of the central government to step

up regulation. For Beijing, the fur industry has provided a welcome diversion for the disaffected rural masses who are seen as one of the biggest potential threats to mainland social stability. In the same way it has taken over the global garment manufacturing industry, China has grabbed the fur trade by the throat, undercutting its rivals in America and Europe with an irresistible combination of cheap labour, generous government subsidies and a convenient lack of monitoring.

Posing as fur traders, we visited farms and markets across a wide sweep of central and eastern China and found a booming industry that has revitalised poor rural communities, making at least one farmer's son a millionaire.

A day-and-a-half's drive northeast of Chongfu, in farmlands dotted around the dreary industrial city of Linyi in Shenyang province, farmers divide their time between manually ploughing fields and tilling soil between the spring and autumn harvests, and a newer rural pursuit: breeding mink and other animals.

One farmer proudly shows us how, in the past two years, he has turned his unprofitable orchards into a mass of cages where he breeds foxes and raccoon dogs. Female foxes are confined in small, stinking coops with litters of cubs and fed twice a day on bowls of grey slop. Nearby, raccoon dogs and silver foxes show signs of severe stress, ramming their heads and trunks repeatedly against the crude wire that encloses them from birth until about four months old, when they are killed for their fur. In one cage, a young female fox stands protectively over the body of a month-old cub lying lifeless, its paws covered in flies dangling through the bottom of the cage.

The animals that survive their brutal infancy are slaughtered and skinned, the pelts taken to the new Cuiwang Fur Company complex on the outskirts of Linyi. There, up to 1,000 skins a day are processed, dipped manually into huge vats of chemical preservative by female workers and eventually loaded up and taken to market in Chongfu. 'We never see the buyers,' says Ma Hongtu, a supervisor at the processing plant. 'The furs go to market where traders buy them in bulk. We know they end up on fashion goods, but we never see the final product.'

One of the biggest buyers of the goods is Hong Kong, which, according to the 150-member Hong Kong Fur Federation, is the world's leading fur trading centre thanks to the garment factories, mostly in southern China, owned and run by SAR businesses. While European fur is still regarded as being of higher quality, Chinese fur is used increasingly for trim and boots, often without the origin of the fur being revealed. Buy a jacket labelled 'Made in Italy' and its rabbit-fur lining may have started as an 18 yuan pelt in Chongfu. There is a strong chance the rabbits may have lived their brief and joyless existence on the farm of Tan Jiyou, the Rabbit King of Jiangsu. A peasant farmer's son who epitomises the inexorable rise of the fur farmer in the mainland, Tan now owns the biggest fur farm in the country.

Last year, one million rabbits were killed for their fur at Tan's farm outside Guanhu Town in Jiangsu province. This year, he expects to kill close to two million as his 100 workers struggle to keep pace with demand from the fashion industry. In the two hours it takes 43-year-old Tan to treat us to a banquet washed down with bowls of rice wine in the town's smartest restaurant, 600 rabbits have been slaughtered and skinned at his property, producing enough fur to trim the cuffs and collars of about 50 women's jackets. Japan is one of his biggest customers. 'Our fur goes everywhere in the world,' says Tan, tucking into a bowl of steamed rabbit meat, a bountiful dish in Guanhu thanks to him. 'We can't keep up with demand. We are very happy about this.'

The rabbits at Tan's farm are kept in dark cages with insufficient room even to turn around. They are stacked six high inside row upon row of concrete, metal-roofed sheds. At between three and six months old, they are strung up by their legs on hooks on a conveyor belt, where female workers grab them by the ears and hack off their heads with oversized scissors. The rabbits kick and twitch for seconds after being beheaded and are then sliced and skinned in one downward wrench by a second worker just a few metres along.

Near the slaughterhouse, Tan has had a giant mural painted showing rabbits playing freely in green fields next to an idyllic lakeside Chinese pagoda - the rabbit kingdom's equivalent of the Arbeit Macht Frei (Work Brings Freedom) sign above the entrance to Auschwitz, the most notorious Nazi concentration camp. Seven years after giving up his job at a state-run factory to set up the rabbit farm (when the government was handing out cheap land to stimulate the fur industry), the Rabbit King is wealthy beyond his wildest dreams.

In a town of 50,000, where most people still ride bicycles and farmers earning about $3,500 a year consider themselves lucky, Tan drives a new Audi A6 with a top-of-the-range sound system belting out Japanese pop music. He wears designer clothes and next year will send his eldest son to university in Britain, where he will study, not agriculture, but information technology.

Tan - who wears shiny black leather shoes with a Playboy bunny emblem - insists he has shared his good fortune widely, starting something resembling a fur farm co-operative. Sixty per cent of the rabbits killed at his property are bred for money by poor local farming families like the one he grew up in, he says. Every morning, dozens of motorbikes and trucks loaded with crates overflowing with baby rabbits arrive at his farm from surrounding peasant villages, the terrified animals yelping, fighting for air and kicking each other. Tan's workers weigh each animal and hand over a few yuan. 'It has been very good for them because they can make much more money from rabbits than farming,' he says. Gesturing to the bustling main road, Tan says: 'Ten years ago, there was nothing here. This was a poor town of farmers and bicycles. Now we are a rich town.'

It is a story being repeated in towns across eastern and central China, creating a fast route out of poverty for hundreds of thousands of peasants. For Peta, however, the economic boom created by China's newfound love of fur comes at a cost.

'There is a thriving, hideously cruel dog and cat fur industry in China, much of which is often falsely labelled as rabbit fur before being exported to western markets,' Baker says. 'Without expensive DNA tests, it is virtually impossible to know exactly what kind of animal you are wearing if you choose to buy fur. If you really care for animals and want to make sure you aren't getting fur from a Chinese farm, the only thing to do is buy a jacket without fur.'

Peta and other animal welfare groups hope the approach of the 2008 Beijing Olympics will turn the eyes of the world on every aspect of Chinese life and encourage the government to introduce effective legislation to ensure animals are humanely treated. In the first campaign of its kind in China, Peta this year launched a Pamela Anderson poster offensive in Shanghai's underground train stations to try to dissuade wealthy women from wearing fur. The campaign showed the Baywatch star, one of the best-known western female faces on the mainland, baring a naked back to the camera with the slogan: 'Give fur the cold shoulder.'

The Hong Kong Fur Federation sees Peta and other animal welfare groups, such as the Humane Society of the United States and the Animal Liberation Front, as radical and extremist. The organisation devotes a page of its website to attacking the activists' 'alarming views'. It runs a selection of quotes from the groups - such as Peta founder Ingrid Newkirk's reported remark: 'Even if animal research resulted in a cure for Aids, we'd be against it' - and says the groups hold the 'deeply entrenched view that animals have the same rights as humans'.

'Fur farmers have a vested interest in keeping their animals healthy and content. As anyone who owns and cares for fur-bearing animals knows, pet owners included, the condition of an animal's coat is a key indicator of its well-being,' the federation argues.

Anneleise Smillie, education director for Hong Kong-based Animals Asia, dismisses the argument. 'You can keep animals in horrific conditions but because they are slaughtered very young, their coats will still be in prime condition,' she says. Animals Asia argues that seeking better regulations for fur farming is the wrong approach, leading at best to minimal improvements in their living conditions. The best approach is to stop people buying fur altogether, the group says. Fur farms are already illegal in many countries, including Britain, Smillie says.

'A lot of cruelty is effectively being outsourced to China. We shouldn't go down the path to encourage it or to make it less cruel. We should try to end it,' she says. 'Why should we regulate it and give them a slightly bigger cage or better access to water? The animals don't have the semblance of a normal life. Even if you bring in regulations, who is going to check up on them?

'Fur is a luxury item. You don't need it. There are so many wonderful synthetic alternatives that are much more effective at keeping you warm and just as attractive. Don't buy fur. A lot of people, particularly in Hong Kong, buy fur trim - it's on bags and shawls - and because it's cheap they don't think it's real. That's not the case. It's all coming from China where it is so cheap.'

For the Rabbit King of Jiangsu, animal welfare is a long way down on his list of priorities. He is more preoccupied with the economies of scale and how he can kill and skin enough rabbits to keep pace with demand in an increasingly competitive market.

'Everyone wants my rabbits,' he says with a sigh as he ponders the logistics of doubling production by the end of this year. 'It's so hard for me to keep up.'