The first of these pillars, the China-based “world factory,” was largely created by foreign multinational corporations and their associated suppliers and subcontractors, with labor-intensive processing and assembly carried out by small and medium-size enterprises (SMEs) that have direct access to global markets through a complex web of contracts. Starting modestly in coastal areas and special economic zones, the “world factory” supply chain has spread throughout China, producing everything from stuffed animals to iPads.