Our story in co-operation with the financial daily, Handelsblatt. China is the most important growth market for sporting goods manufactuers. And Adidas is looking to get a piece of the pie.
Right on cue for the olympics, Adidas is due to open its biggest store worldwide - a total of 3000 square meters of shop floor. The shop is packed full of high-tech gadgetry and has a fitness center and a basketball court. By 2010 the German company is hoping to turn over 1 billion Euros a year in China. A report from Michael Altenhenne.
It's only just opened, and already it's a draw in Beijing: The biggest Adidas store in the world, dubbed the "Brand Center" by PR strategists. Adidas' entire product line is on display here across four stories and more than 3000 square meters, a shopping mecca for China's well-heeled consumers.
Beijing residents have caught the Olympic fever, and the German sportswear brand is busy surfing that tidal wave of excitement. Like prized religious artifacts, the Adidas store showcases shoes for 27 different Olympic sports. For the brand-conscious clientele, the three-stripe logo is a champion in the fashion world:
"My favorite is the "Superstar" shoe from Adidas. Their stuff is just totally trendy and original. And I think for the quality of the product, the price is reasonable."
With sales in China up 60 percent in the first half of the year alone, Adidas has already struck gold - the kind of success the Olympic athletes in Beijing are still fighting for - and that company founder Adi Dassler never would have dreamed of. But he also couldn't have imagined that one day soldiers in China's people's army would patrol his storefronts.
The security situation in Beijing remains tense as political conflicts overshadow the Games. Herbert Hainer can sense that tension during his visits. Repeatedly, the Adidas CEO has to justify his company's engagement in China.
"We discuss many topics with our Chinese partners. I think that when you get to know China really well -- I've been traveling here for 10 years already, and in the past four years I've been here 15 or 20 times -- you'll also start to notice that there's a tremendous push for further openness, for working together with other countries and peoples. But it's not something that happens overnight."
2000 kilometers south of Beijing, far from the political conflict. The idyllic rice paddy fields are deceptive - the region of Guangdong is THE center of China's economic boom. In the so-called workbench of the world, Adidas is also hard at work.
About 18,000 workers make Adidas trainers in this factory owned by an investor from Taiwan. Wages are soaring -- up 20 percent in a year. The factory management is starting to question the benefits of producing here. Monthly wages are now about 130 Euros - twice as much as in India, for example.
The Manager Charles Yang explains: "Yes, we know there will be volume shifted to the other lower-cost areas. But we are sure the great majority of the complicated product of the high-end product will stay here in China. Obviously we will find the other locations also, like we have a factory in India."
At lunchtime, a throng of factory employees marches toward the cafeteria. Yet the days when millions of poor migrant workers couldn't find work are over. Now, it's often the factory managers in Guangdong wringing their hands in search of new employees. All in all, working conditions in China have improved markedly. A new worker protection law has been in effect since January. Management must offer their workers more in a day than the famous "bowl of rice," a symbol of a bygone era.
Charles Yang: "We try to build a community around this factory. We try to have our workers come and stay with us for a long time, for good. Otherwise, we're going to have to compete with the other factories again and again and again. So the more that we can do to build this community, to take care of workers, the better we will be down the road."
This is what employees' accommodations look like: well-groomed parks, there is even a community room for evening events. Sure, it's a model factory, but standards across China are improving rapidly. New condos are being built exclusively for factory workers.
Back in Beijing, in the shiny new Adidas-Shopping World. Skill tests and loads of high-tech gadgetry - and the young are certainly taking notice. The expense is paying off. After all, many of tomorrow's sports fans are going to need footwear with the perfect fit.