Italy vs. China: Sitting Pretty

How did China get do good at making chairs? To find the answer, travel 120 miles from Shanghai to a cluster of villages in the Yangtze delta. Eighteen hundred years ago, an Emperor fond of its forests named the area Anji, which means "peaceful auspiciousness." Until recently, its residents farmed bamboo and grew white tea. Then in 1982, as economic reforms took hold in China, a state-owned factory set up to supply lab stools to a nearby university made the country's first five-wheeled swivel chair. Soon local bamboo farmers pooled their savings to start factories themselves. By the late 1990s, Anji's economy centered on a single product. Last year its 460 factories churned out $740 million worth of chairs (more than double the output in 2003) and exported nearly half that. "One in every three office chairs in China will now be made here," says Lin Huanrong, vice secretary of Anji's newly established Chair Industry Association. So in 2003 officials in Beijing gave the county an honorary moniker. From then on, it would be known as Yiye Zhi Xiang, the Town of Chairs.

China has been in the furniture business for a while. The Pearl River delta, in the south of the nation, has supplied the world with cheap beds and dressers for decades. But more recently, as new Chinese homeowners have swelled domestic demand, the industry has spread to other parts of the country. Now manufacturers are crafting increasingly sophisticated wares that allow China to compete in markets once dominated by Europe. Last year China exported $13.77 billion worth of furniture, overtaking Italy as the world's leading exporter. "At the beginning, you could never get the right quality in China," says Judy George, CEO of upscale American chain Domain Home Fashions, who moved her production base to China from Italy in 2002. "Now they can make just about anything."

In Anji that process is just beginning. In 1993 Zhu Kanglin, then 23 and a farmer turned plastic-mold factory worker, scraped together $3,000; bought wheels, arms, foam padding and plywood chair bodies from local components manufacturers; and hired 20 friends to assemble the parts into finished products. Today his Heaven Office Furniture makes 1,000 kinds of office chairs, from executive models in black leather and chrome to squat cloth-clad cubicle standards. Zhu won his first export contract in 2004. He also attended the Cologne Furniture Fair in Germany and sent 80% of his $3 million output to 20 countries. Through a screen of plastic bamboo along his office window, he points out the new factory he's building next door. He shows off a United Arab Emirates health-insurance card, which grants him medical treatment in Dubai, where he just opened his first foreign shop. "By Anji's standards, we have a small business," he says. "We're middle of the road."