China Ventures Southward

In November 2002, Li took a vacation to Hanoi. As he walked tree-lined streets navigated by bicycle rickshaws, past fading French colonial villas and peddlers selling bowls of noodles, he might have been in his own country a decade earlier. At home, there was too much competition. Here was a frontier of opportunity.

"I just had this feeling that I had to go out of the country and invest," he said. "It just seemed interesting and exciting."

The following month, he returned to Hanoi -- this time to look for a new factory site. Over the next several weeks, he and a translator rode all over northern Vietnam, meeting with the local governments that controlled land.

He examined local market conditions, determining that -- unlike at home -- he could compete.

"I used a means of deception," Li said, smiling. "I would visit other bag factories and pretend to be a customer and then ask for their prices," he said.

By January 2003, Li had settled on a new industrial park an hour's drive north of Hanoi. It was an undeveloped area of rice paddies, but it sat on the Friendship Highway connecting Vietnam to southern China, making it easy for Li to bring in Chinese technicians to construct and operate the factory.

He settled on a 50-year lease with the local government, which seemed pleased when he told them he would have jobs for 500 workers. The local minimum wage was $30 a month.

Still, Li needed approval from the Chinese government, which regulates capital leaving the country. By March 2003, less than six months after his first visit, he had the formal blessing to transfer $1.5 million to Vietnam to launch the factory. By May, construction had begun.

"I knew if I was going to act, I had to act fast," Li said. "I couldn't be considering the pros and cons."

These days, Li dons a blue suit as he crisscrosses Vietnam in search of customers, mostly state-owned animal feed factories. It is a new country, but so much is familiar -- the contractor who used shoddy materials in building the factory, the "special fees" and "expediting charges" that he hands customs agents at the port.

"We Wenzhou people are used to that," he said. "In fact, it works for us. It's really convenient. A lot of things work quicker."

Li brings in materials from China to keep costs low. He lives in a factory dormitory room shared with another Chinese manager. He speaks no Vietnamese. He plays poker with the other Chinese managers and sometimes watches Chinese television via satellite. Mostly, he works.

"I'm not here to feel comfortable," he said. "I'm here to make money."

Special correspondent Eva Woo contributed to this report.