With its medieval canals and carefully preserved downtown, the eastern Chinese city of Suzhou might have been a quiet burgh compared with neighboring Shanghai. But in 1994, the governments of Singapore and China invested in an industrial development zone there, and Suzhou grew quickly into a manufacturing boomtown.

Singapore-based Flextronics, one of the largest global contract manufacturers, built factories there, initially to make small consumer electronics. Those products were relatively ­simple to assemble in great numbers, making them well suited to China’s then plentiful and inexpensive labor force. But by 2006, labor, land costs, and competition were rising, and Flextronics’ margins were shrinking.

Image: Spray coating the surface of a printed circuit board at Flextronics’ Suhong plant in Suzhou, China.