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Dan's China diary - day 7
An unusual Nokia factory tour...

By Dan Ilett

Published: Friday 16 June 2006

In May 2006, silicon.com senior reporter Dan Ilett travelled to China, seeking to get behind some of today's most interesting tech and business stories. This is his warts-and-all diary, which appears daily this month. For in-depth coverage of this fact-finding trip inside China, including analysis and exclusive stories, click here.

Friday, 12 May, Beijing

The taxi driver is getting excited about something but I can't understand what. We're making our way to Nokia's factory just outside Beijing. It's been a tough gig to secure, so my guide Susan and I are trying very hard to be on time but we're stuck in traffic.

Tired and hung-over today after leaving my friend and fellow journalist Kaiser's place late last night. There was shouting in my hotel corridor during the night and a lot of banging doors. After half an hour of this, I opened the door to see what was going on. Prostitutes were going up and down the corridor looking for business. And this was a four-star hotel. Classy.

I met Susan at the CNET office today to pick up my plane tickets for Shanghai and say goodbye to everyone there. Feel a bit sad about leaving so soon - these guys have gone out of their way to help me get around Beijing. I'll miss Susan in particular as she's been a fantastic help and interesting to be around. I've learned a lot from her.

But one thing I haven't learned is when people are shouting out of anger and when they are just speaking loudly, usually for emphasis. Susan and the taxi driver are talking loudly - she begins to translate but he interrupts.

"Hello, how are you?" he asks in broken English.

"Fine, thank you," I say.

Susan says he's excited because he has a foreigner in his cab. He's learning English for the Olympics so more tourists will take his cab. After the Olympics he's planning to be a company driver for a foreign investment company but you need English for that, apparently. Anyway, he seems to have his career worked out and wants to tell us about it so I listen attentively.

But all the rambling makes the cabbie lose his way so we stop to ask a passer-by how to get there. Turns out she works at Nokia (one of 4,000 people at the plant) so she hops in the cab, greets me in English and after a long drive we arrive.

Located in an industrial park just to the south of Beijing, the Nokia factory is a joint venture between the company and Beijing Capitel. A good deal of foreign investments turn into joint ventures with a Chinese company - it's one of the main ways for foreign companies to do business here as it can get quite complicated, for example with workers and the government.

It's also China's way of keeping some control over what goes on and tapping outside expertise.

One of the reasons foreign companies have a lot of R&D centres in China is because they need the presence but have not quite worked out how to do business.

Nokia's factory is a massive plant but you can see the Finns have left their mark on this place. It's clean and bright. The wide, white corridors give it a futuristic feel.

Our contact is Flann Gao - a young PR for the company. Looks like he's fresh out of university. None of the execs had time to meet me today so I've been granted a look around the factory and then I'll have had my chips.

At the entrance to the factory we're asked to hand over bags, laptops, mobile phones, cameras and recorders. That's basically all my equipment. I'm allowed to take a few notes though.

Flann makes me wear an anti-static overcoat, which looks ridiculous because it doesn't fit and the sleeves come up to my elbows. I plead not to wear it but rules is rules, apparently, and far be it from me to present poor Flann with confrontation.

As we approach the door to the heart of the factory there's a 'mag and bag' airport security arch inspection unit. Everyone who goes in and out of the factory must to go through this. Security is so tight because of all the intellectual property violations that occur. There are also security cameras hidden neatly around the building to prevent workers from swiping the odd handset and taking it to a competitor.

"There are problems, of course," says Flann. "But you have to offer good opportunities, salary and working environment to combat this."

We enter the manufacturing room - another clinically white room with lots of people, mostly women, beavering away in whitish coats and hats. Makes me think of my mum, who worked in a crisp factory when I was little and my family was going through hard times. At the same time it's all a bit like a James Bond movie - what am I doing in the middle of a Chinese factory wearing this stupid coat anyway?

The motto pasted on the walls of the factory reads: 'Enjoy challenges, team work, strictness and happiness.' I'm now more than used to seeing weird things like this.

I look at Susan then back down at all the workers. Most of these guys probably earn between $1,500 and $2,000 a year. That's a starting salary for a graduate in China. These guys may have been to the equivalent of sixth-form college until 18 but probably not university, Flann says.

"[The salary] is competitive but of course it's lower [than Europe]," says Flann. "China is not that much lower than the rest of the world. It's not the lowest pay."

The factory runs 24x7 with workers doing eight-hour shifts. Labour agencies provide a good deal of the workers. There's a bus to take them to and from Beijing but some of them live in dormitories and the conditions here look pretty good, to be honest. But watching these assembly lines piecing mobile phones together and testing makes me feel lucky I made it through university.

According to Nokia, the factory made 200 million phones last year, 50 per cent of which were sold in China and the rest went out to other parts of the world. "We expect to make more than that this year," Flann says. Nokia has three other factories in China - Suzhou, Dongguan and another in Beijing. Flann says Nokia has 33 per cent share in the mobile handset market in China and is considering new joint ventures for 3G products in the future.

Fewer than 10 Finns work at the factory site but that could all change soon when the swanky office in the middle of town is moved to this industrial estate. Those busy execs who couldn't meet me today may soon have an uncomfortable commute.

As we head for lunch, Flann shows us the gym, which "anyone in the company can use". That's odd because there's no one in there and it looks as if the equipment has barely been used. We get to eat in the VIP restaurant but to be honest the canteen looks pretty good as well. And it's lasagne for lunch - my favourite.

After we leave Nokia, I discover that my meeting with Sohu.com - a kind of Chinese Google - has fallen through. The CNET team worked hard to help get this for me but I know it's because the PRs have no idea what I'm doing here and why I'd be vaguely interested in their company. It's not the first time and I suspect it won't be the last.

We've worked hard this week so we go to the bar for a drink and go for a really good meal. By early evening I'm ready for bed.

Log in tomorrow and Sunday for days eight and nine of Dan's diary - or come back to the site on Monday for a three-day diary round up.