Rob Roohparvar, president of the Flextronics unit running the plant, estimates costs will be at least 10 to 15 percent cheaper in Ganzhou than the southern coast where the conglomerate and key rival of Foxconn runs its flagship China facility.
In the next five years, Zeng Weilin, vice director of the Ganzhou Development Zone, expects the region's GDP to quadruple and the number of factories to rise from 300 to over a thousand. Focusing on domestic buyers can help producers mitigate another risk: the appreciating yuan.
"The exchange rate has no effect on us, because our main market is 100 percent focused in mainland China," said Simon Lu Xingping, the head of Maniform, a fast-growing Chinese lingerie manufacturer headquartered in Shenzhen, which is building a 6,000-worker factory in Ganzhou.
Maniform is one of a batch of emerging Chinese manufacturers that started off as exporters or producers for overseas brands, picking up skills and know-how until they reached a point where they felt they could develop a brand themselves.
These Chinese competitors, often nimbler, highly entrepreneurial and more flexible than multinationals, have almost all targeted their lucrative home markets and have begun to set up vast retail networks and factories across the country.
Notable examples include those in the sportswear industry including Li Ning , Anta and Hongxing Sports . Global brands like Spanish clothing giant Zara -- famed for the success of its rapid product development cycles -- and sportswear firm Puma are reportedly planning huge expansion plans to target China's future middle class consumers.
"The internal business of consumption is competing now with the export business for space, for people, and it's driving the costs up in China. So that party (of cheap labour and exports) that we've had in the last 15 years is going away," said Rockowitz of Li & Fung.
Poor Infrastructure
But challenges loom for those moving to inland China.
Yifan Hu, chief global economist at Citic Securities, said the inland business environment is hampered by poor infrastructure, high transportation costs and a lack of developed free markets.
Ho, the Henan factory owner is critical of inconsistent and discretionary government policies that make it difficult for businessmen to map out longer term strategies and commit investment to the region, particularly smaller firms without the clout of a Foxconn.
"The legal environment isn't so good and everything is decided face to face with officials. You don't really know what you're getting. Their (preferential) policies need more clarity," Ho said.
Ho's transportation costs are almost double those in the Pearl River Delta, with the nearest port being the Lianyun port in Jiangsu province, almost 600 km (375 miles) away. Still, he says, transportation costs now only make up around 3.5 percent of his overall production costs so it's still manageable.
"There will be some shifting of products away from southern China to both the interior of China and outside of China," said Henry Tan, the CEO of Luen Thai Holdings, one of Hong Kong's largest listed textiles groups.
"However there will still be a portion of products that stay in the Pearl River Delta and the Yangtze River Delta, purely because of the convenience of supply chains, because all the fabrics, all the trims, all the development are there."
The waning of government stimulus efforts, which have done much to spur growth in China's rural areas over the past year or so, could also hamper the move inland. Local governments with shrinking budgets have less scope to scatter sweeteners to attract industry, Hu said.
Zhengzhou like other cities borrowed heavily to bankroll a blitz of marquee infrastructure projects, such as a new convention centre,
