It takes about one hour from the business district of Nanjing to Jiangning, an industrial area. These days, farmers here dwell in residential subdivisions, and it is said that they are pleased with all the comfort they have recently gained. Here, where the commuter train ends, are the outskirts of Nanjing—so far.

All over the world, improved transport connections have resulted in rising real estate prices, and the case is no different here. Now, with the landless farmers placed in their condominium suites, the hour strikes for investors and scalpers: Members of the urban middle class are acquiring second and third residences as long as prices run high—they believe the government will surely prevent the bubble from bursting.

But before the Third Estate succeeds in transforming the region into a suburban conglomerate of high-class villas, the era of industrialization has to pass through, and this era lacks factories. These are built on land that was previously for agricultural use.

The company

Mr. Shen owns one of these factories, called Nanjing Circle Precision Machine Manufacturing Co. Ltd. The production facility is a quite elegant piece of industrial architecture, with gray, four-story buildings and flat roofs. Their façade is mixed up by a five-meter-long porch which at two points faces every building over all four levels.

These buildings, with their countless tiny windows and pigeon-blue coating, symbolize the work that is accomplished in this place: assembling different components to form a new functional device. Therefore, work pieces of iron, copper and aluminum are being processed and mounted.

A proprietary precision casting house is DIN-certified. Shen manufactures a virtually unlimited range of products – ball screws for use in French helicopters, for example, or components for solar plants, or precision work pieces for use in the construction industry. The vast bulk of production parts he purchases separately from several foundries. In his company, the pieces are processed, heat- and surface-treated and installed, then they're shipped to Europe.

The word "precision" is in the company's name for a reason. Precision is crucial at all points in Shen's enterprise. Costly test equipment is kept in a central branch of the company to ensure and guarantee the high quality of every single work piece that leaves the factory. Complying with promised delivery dates requires precision as well. These measurements of quality assurance are considerably staff-intensive: In addition to a production manager, Shen's company established the position of quality manager, someone who is not supervised by the production manager but directly by corporate management.

Among the joint partners, there is one solely in charge of quality issues. One male and five female employees are responsible for quality control, and two workers are accountable for in-process inspection. They check delivered unfinished castings for quality defects.

"If we have a delivery date, we have to adhere to it. If we encounter quality problems, we have to solve them. We have to deliver new work pieces immediately," Shen said. "Production-to-stock is inevitable. I'd rather do stock-keeping, it serves as collateral security. Better to be safe than sorry."

Employment law and manpower

"To be frank, Germans tend to be very sniffy, but still they are accurate and very serious. They work diligently and precisely and are particular about financial issues. That impresses me," Shen said.

"You know, the most important thing for a tradesman is winding up affairs correctly. Thus, I prefer to do business with Europeans. I'm uninterested in cutting deals in China," he continued.

Precision and rigidity even manifest themselves in personnel policy. "Our quality criteria are intensively strong," Shen said. "Young employees who accumulate cases of malpractice are laid off."

But the renewed work contracts law has made life more difficult for entrepreneurs like Shen. The company introduced industrial safety measures in 2004 and insures its workers voluntarily.

"It has always been in our interest to bind our workers to our company with particular benefits," he said. 

The new work contract law, in Shen's eyes, is too one-sided. If a worker is not content with his work, he can leave the company instantly. On the other side, the company can't put anyone out on the street that easily anymore.

"Lawyers have discovered this as a lucrative opportunity," Shen said. "They tell the workers to take the enterprise to court, then a lawsuit is filed against us, or they leave with a golden handshake. These huge expenses have caused difficulties for many companies just as the global economy is declining."