The little town with an entrepreneurial flair

The thriving industrial township of Xiaolan, in the western Pearl River Delta city of Zhongshan, is at first glance little different than the scores of other boomtowns scattered across Hong Kong's hinterland. However, in a region dominated by Hong Kong investment, Xiaolan is unique in that 90 per cent of its factories are privately owned by local entrepreneurs.

Like Wenzhou in Zhejiang province - the unofficial capital of China's emerging private sector - Xiaolan is a light industrial hub that has prospered primarily through the efforts of homegrown entrepreneurs rather than injections of overseas capital.

Xiaolan's companies claim large slices of seemingly random domestic markets, including 47 per cent of China's loudspeaker sales and about 35 per cent of the underwear industry.

The town's importance as a light industrial centre was underscored by the China Light Industry Product Expo, held for the first time earlier this month. Staged every year in Wenzhou, it will also be held every two years in Xiaolan.

Xiaolan, two hours by ferry from Hong Kong, has more than 5,000 factories. The town's gross industrial output grew 25 per cent to 20 billion yuan last year, while its gross domestic product grew 28 per cent, said Vice-Mayor Dong Zuwen.

Even such fantastic official growth rates appeared believable, judging by the amount of roads, industrial parks, factories and buildings under construction in the 75.4 square km township.

This year, Xiaolan's private enterprises are expected to make capital investments of two billion yuan and the government plans to spend 500 million yuan to one billion yuan on basic infrastructure such as roads, according to Mr Dong.