Editor's note: Jim Harger was among a group of U.S. journalists who recently visited China through the China-United States Exchange Foundation, a non-government organization that seeks to build trust and understanding between the countries.

SHANGHAI, CHINA - The factory workers at CIG Shanghai Co. don't have dirt under their fingernails.

If they must handle the electronic circuit boards the company produces, they're likely to put on static-free white gloves first.

Inside its shiny white factory on the outskirts of Shanghai, CIG is on the cutting edge of China's future as a manufacturing center.

China's industrialists and more significantly, its Communist Party leaders, are trying to shed its image as the home of sweatshops and dark factories where underpaid laborers churn out products cheaper than their counterparts in the United States and the developed world.

During a 10-day visit to China, a group of American journalists were shown automated assembly lines and robots on par with any high-tech factory in Michigan or the United States.

To be sure, the selected factory tours did not give the whole picture during the media tour sponsored by the U.S.-China Exchange Foundation, a Hong Kong-based non-governmental agency that aims to improve understanding between the world's two largest economies.

"China is still very much a developing country," one U.S. diplomat told us in a background session. "Don't be deceived by what you see and hear."

An estimated 300 million of China's people still live as peasants, an American business leader told us. By comparison, the total population of the United States is about 324 million.

The average Chinese factory worker makes about $300 a month. That's a big improvement over recent years, but nothing to write home about compared to factory wages in the United States, where manufacturers compete by making up the difference in productivity, quality and the proximity to its markets.

Despite their vast land area, the Chinese still have difficulty raising all the foods they want to buy with their bigger paychecks. Thus, the U.S. is a big exporter of items like dried milk, pork and grains like soybean and wheat to China.

"China is a land-scarce and labor-abundant country," an American businessman who exports grain to China told us.

As rising wages and a growing middle class make other third-world countries more competitive, China is borrowing from the playbook written by American manufacturers.

Chinese government officials recently announced a 10-year plan to automate the country's manufacturing sector, even if it means cutting jobs and closing outdated factories.

Manufacturers near the urban centers are turning to automation and technology to stay competitive in labor markets where the wage rates are catching up to developed countries while other third-world countries - including Mexico - are beating the Chinese.

Although the average Chinese worker still makes one-third or less than their U.S. counterpart, energy costs are higher and shipping makes it tough to compete with a highly automated factory in the Americas or Europe.

At Victory Precision, vice president Simon Zhang proudly showed off a room filled with robots that were machining and inspecting laptops computer cases. His company's customer list includes Apple, Lenovo, Dell, Corning and Philips.

At today's labor costs, the robotic equipment they installed will pay for itself in two or three years, said Zhang, who plans to add more of the automated equipment.

At privately held CIG Shanghai, the Wi-Fi routers and circuit boards the company builds for cable TV providers and telecommunications firms around the world are assembled and tested by computers and robots.

Aside from a few delicate tasks that require hand soldering, most of the 1,800 CIG employees tend the robots or package the final products for shipment. The circuit boards are printed and programmed on automated and robotic assembly lines.

CIG Shanghai's president Gerald Wong is a Chinese national and U.S. citizen who spent 18 years at Bell Laboratories in the U.S. before striking out on his own in his native China. Wong applied the lessons he learned in the U.S. to his Chinese factory.

Despite his factory's clean environment, Wong said finding qualified labor remains his biggest challenge. Workers tire of assembly lines and frequently move from company to company or seek work in the less demanding service sector, he said.

"The young people don't like it," Wong said. "Everyone wants a better life. No one wants to work in a factory."