A few choice paragraphs:

We are driving to see Cai Shuxian, the manager and majority owner of a clothing factory in which Chen owns a 10 percent stake. Cai, a lightly built 32-year-old, is typical of the entrepreneurs who have made it big during Wenzhou’s three-decade boom, vaulting from shop-floor grunt to factory owner in a dizzyingly short period of time. “We earned very little in those days,” the high-school dropout recalls of his first job, “about 600 yuan [roughly $100] a month.” Within six years Cai was able to leverage his money and know-how into building a factory of his own, which now employs more than 100 people. ...

In southern China, things look rather different. The Chinese say that in this region “the mountains are high and the emperor is far away”—in other words, the government isn’t paying much attention. Companies are mainly small or medium-sized enterprises, government services are slight, and laws are routinely ignored. According to official statistics, the three southern coastal provinces of Zhejiang, Guangdong, and Fujian have the first, second, and fourth wealthiest citizens, respectively, in the country. They are the center of China’s export sector and the primary destination for China’s millions of internal economic migrants. Here is where the real Chinese miracle is happening. ...

The city and region of Wenzhou play an important role in this story. The Wenzhounese have a reputation for both an uncanny sense of business and an almost pathological disregard for the government. The mountains here are no metaphor: Seventy-eight percent of the Wenzhou prefecture is covered by mountains, a fact that proved pivotal to the area’s early development and the central government’s response to it. ...

The government’s indifference didn’t last forever. But when the authorities got around to paying attention, they decided not to mess with a good thing. In 1985 Liberation Daily, a paper sponsored by the Shanghai Communist Party, referred to Wenzhou as a “model” for other parts of China to study. In the next year 15,000 government officials visited the city to learn, not crack down. Although bureaucrats still occasionally try to impose state controls on the city, the futility of the effort quickly becomes apparent. By now the local Chamber of Commerce has taken to negotiating trade deals both domestically and internationally because, as in most other things, the private sector is more effective here.