"The hotel industry in Dongguan is very unique," says Jiang Qikang, deputy secretary general of China Tourist Hotel Association.

Nearly 80 per cent of China's 12,000 hotels, which have at least one star, are still State-owned or collectively owned.

"But over 90 per cent of Dongguan's hotels are privately owned. Private investors can smell every market opportunity," Jiang says.

With its economy growing 22 per cent annually, Dongguan has become one of China's major sources for exports. Its export volume has been China's third largest for eight consecutive years. Four out of every 10 pairs of sport shoes sold in the United States are made in Dongguan. In 2004, among the top 100 Chinese private enterprises with the largest trade volume, 22 of them came from Dongguan.

These enterprises are scattered in various towns subordinate to Dongguan. For example, Dalang Town is one of China's largest woolen sweater production centres. With nearly 2,000 sweater companies, the town produces more than 200 million sweaters annually, 40 per cent of which are exported. Dalingshan Town produces one-fifth of China's furniture and is one of the largest furniture production bases in Asia Pacific.

But when Mo Zhiming opened the first private four-star hotel in Dongguan 10 years ago, he did not expect to see such huge market demand.

"It was a coincidence," says Mo, president of Guangdong Mingcrown Group, whose business focuses on construction engineering, real estate and hotels.

Mo had earned 100 million yuan (US$13 million) by constructing factory buildings for other companies in 1993.

"I really didn't know where to put the money," Mo recalls.

The farmer-turned-entrepreneur knew nothing about IT or the financial market. He also worried that buying a factory would be too risky.

Solid growth

"Building a hotel is something tangible. It is always mine and I can rent it to others," Mo says.

Mo vaguely knew his hotel would have good business because his clients often had to drive to Shenzhen to find a decent place for dinner.

Mo opened the four-star Gladden Hotel in Liaobu Town in 1996. He hired hotel professionals from Shenzhen to help him manage the hotel. With over-500 foreign-invested enterprises, Liaobu mainly exports digital products.

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