Shandong Haijin offers model HS078033, a cornhusk bag with wooden bead handles. The 23x23x28cm product has T/C lining and feet.

This China hub has an established transport system and is rich in plant and energy resources.

Material abundance and solid infrastructure are Shandong's main advantages as a leading manufacturing base for straw bags.

The province, located along China's northeast coast, is known primarily for its agricultural exports. Cotton, wheat and corn are some of the major crops, yielding a continuous stock of straw as the byproduct. Rattan, jute, sea grass, wicker and raffia are also available.

The 500 bag suppliers in the hub turn out mostly low-end and midrange models from these components.

The quality of raw materials is on a par with imported versions, and these cost less. Moreover, by utilizing local resources, makers have lower transportation expenses and are able to pass on the savings to buyers.

Since Shandong is one of the country's top energy centers, electricity shortages at factories are rare. Currently utilizing coal-generated power and oil reserves, the province will also become the home of three nuclear plants set to open in 2010.

In addition, the highly developed land, sea and air network contributes to efficiency. Suppliers, found mostly in the cities of Yantai, Weifang, Lingyi, Qingdao and Jinan, are linked by 50,000 kilometers of highways. They are also connected by rail to the neighboring provinces of Hebei, Henan, Anhui, Jiangsu, Beijing and Tianjin.

Shipments, the majority of which go to clients in the US, the EU and Asia, can pass through any of Shandong's six ports. The Qingdao harbor, in particular, is one of China's busiest, handling 6 million TEUs annually. Local and international flights depart from 10 airports.

Of the manufacturers in the hub, 80 percent are small and midsize enterprises. Privately owned companies account for 70 percent while 25 percent are foreign-invested. The rest are state-owned.

Apart from bags, makers commonly offer other plaited straw products such as hats, caps, baskets, rugs, carpets and placemats.

Releasing on-trend models is a priority among Shandong companies. Because of this, various steps are being taken to improve R&D.

Among the suppliers featured in this report, Qingdao Mingsheng Handcraft Article Co. Ltd invests $20,000 in product development every year. Its R&D team is composed of six designers and 14 sample and pattern makers. Fifteen new models are launched monthly. The latest collection features bright colors. Lace, ribbon and bead trimmings are utilized.

The material selection includes sea grass, rush, wicker, jute, raffia, cornhusk, and wheat, paper and cane straw.

Target, Macy's and Pottery Barn are among the company's OEM clients.

Qingdao Wen Flying Imp & Exp Co. Ltd will spend more than $500,000 this year for computerized equipment. It also plans to build an office and R&D center in Italy. Current cooperation with a designer there allows the company to introduce 4,000 models annually.

Upcoming styles will have improved functionality and various material combinations.

Ninety-five percent of Qingdao Wen Flying's exports are developed in-house. The rest are buyer-specified configurations.

At Qingdao Fuyuan Arts & Crafts Co. Ltd, leather, fabric, fur and crocheted trimmings are the most-popular accents for its straw bags. Other embellishments are lace, ribbons, corsages, sequins, beads, rivets, shells, chains and buckles.

The company's R&D team meets every two months with its design partner in Japan. Of the 2,000 models released annually, 35 percent are a result of this collaboration.

Wal-Mart and Carrefour are part of Qingdao Fuyuan's clientele.

Shandong Haijin International Trading Co. Ltd operates three factories that have ISO 9001:2000 and 14001:2004 certification. Working with designers from Japan and South Korea, the R&D team releases 200 to 300 models every month.

New styles in cornhusk, wheat and paper straw, and sea grass feature intricate trimmings such as crocheted applique and patchwork bodies.

A selection of straw bags from Shandong, China

Qingdao Fuyuan Arts & Crafts Co. Ltd

Model: FY8006
Minimum order: 200 pieces per style per color; 1,000 pieces per order
Delivery time: 35 days
Description: Wheat straw body; T/C lining; PVC leather handles; zipper closure; interior pocket; 25x13x28cm; 30 pieces in 57x40x45cm carton

Model: FY8101
Minimum order: 200 pieces per style per color; 1,000 pieces per order
Delivery time: 35 days
Description: Cornhusk body; T/C lining; PVC leather handles; magnetic button closure; zipped and mobile phone pockets; 35x12.5x31cm; 20 pieces in 75x40x45cm carton

Model: FYL07-1348 S/2
Minimum order: 600 sets
Delivery time: 45 days
Description: Cornhusk body; T/C lining; button-and-loop closure; interior pockets; large: 42x22x23cm; medium: 39x19x21cm; six sets in 70x53x45cm carton

Model: ZX-7131
Minimum order: 1,000 pieces
Delivery time: 45 days
Description: Cornhusk body; T/C lining; drawstring closure; interior pockets; 29x18x27cm; 24 pieces in 110x46x46cm carton

Model: ZX-7115 S/3
Minimum order: 600 sets
Delivery time: 45 days
Description: Cornhusk body; T/C lining; interior pockets; large: 45x20x27cm; medium: 41x17x24cm; small: 38x14x22cm; six sets in 60x48x66CM carton

Model: 130286
Minimum order: 200 pieces per color
Delivery time: 45 days
Description: Crocheted raffia body; bamboo handles; zipper closure; interior pocket; one piece in plastic bag

Model: 27-331
Minimum order: 200 pieces per color
Delivery time: 45 days
Description: Cornhusk body; fabric lining and trimming; PU leather handles; interior pocket; one piece in plastic bag

Model: HS078002
Minimum order: 300 pieces
Delivery time: 45 days
Description: Cornhusk body; T/C lining; PVC leather handles; 20x27xl50cm; 15 pieces in 75x47x68cm carton

Model: HS078022
Minimum order: 300 pieces
Delivery time: 45 days
Description: Cornhusk body; T/C lining; paper strips handle; button trimmings; 20x28xl48cm; 15 pieces in 75x47x68 carton