China's Ugly Export Secret: Prison Labor

A Business Week investigation discovers that goods for export are being made in the gulag

Two months ago, a Chinese shoe factory in Guangdong province urgently summoned a Hong Kong-based agent selling to U. S. shoe companies. The factory needed extra labor to fill his sandal order, so could he approve a new subcontractor right away? After a two-hour drive, the American was escorted into a complex of some 20 workshops producing shoes, flashlights, and hardware. Inside, he saw 150 men, all shaved bald, wearing blue cotton pajamas with numbers across the breast. "This isn't any factory," the American thought to himself. "I'm in a prison."

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