Enterprises Weather Economic Storm with Gov't Support
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The impact of the US-originated financial crisis has reached almost every corner of the earth.
Wenzhou, a small coastal city in east China's Zhejiang Province, found its manufacturing sector the hardest hit. Many companies needed help, especially in product sales at home or abroad. Since the second half of 2008, the local government took a variety of measures to support businesses. The efforts seemed to pay off.
In Wenzhou, more than 99 percent of businesses are small and private firms. The small size made them vulnerable. In order to help companies increase domestic sales, the city government initiated a program late last year for opening up 100 shopping centers in big markets of major cities across the country. The store was expected to deal in Wenzhou's famous branded products. Taking advantage of the 170-odd trade associations established by Wenzhou business people in as many cities, the government sponsored the selection of products and venue cities, provided subsidies to cover some sales promotion costs, and check that the dealing is honest.
The first "Wenzhou Famous Brands Shopping Center" was inaugurated on January 15 at the Maigo Entertainment Plaza in north China's Tianjin. Some 20 varieties of Wenzhou-made products, including shoes and garments branded Kangnai, Aokang, Hongqingting, Jodoll and Beijixinxiu, enjoyed a fabulous sale in the initial period. Encouraged by the success, more stores were on the waiting list for opening in other cities later this year.
"The government program solved the problems that would have frustrated a company if it fought all alone," Wenzhou Fashion Association president Zheng Chenai said.
In January the city government handed out a total of 150 million yuan to facilitate companies to go to international fairs and expositions in groups. It also put aside a sizable fund to underwrite company's exports. Since the start of the year, Wenzhou had staged 54 commodity fairs of varied scales and impact, most of which were sponsored jointly by the government and companies. The number of events was double that for the same period of 2008. The moves helped boost sales. Although many orders that companies had accepted were short-termed and small in volume, which reflected caution at fluctuating exchange rates, many small amounts combined to a big one.
The Hongqingting Group transacted a total of 1.5 million euros for supplying leather shoes at the Italian MICAM fair in early March. It was the first time the company attended this super shoe trade event. CHINT, a leading manufacturer of electrical apparatus such as power transmission and distribution equipment, reported an exports growth of 34.86 percent to 3.46 million U.S. dollars in the same month, thanks to its tactics of supplying cost efficient alternative products, and exploring new markets such as the Middle East, Africa, Latin America and Russia.
While the national exports reported negative growths in the first three months, the figures for Wenzhou remained positive. The city's exports in March climbed 17.9 percent year on year. Sales of its competitive products like spectacles and lighters went up 53.5 percent and 52.3 percent. And the export of shoes, garments and synthetic leather also registered 20 percent or higher growths. Declines in exports to the European Union and Russia were made up by sales to new destinations like the ASEAN countries. Wenzhou's first quarter exports totaled 2.181 billion U.S. dollars, up 14 percent on a year before.
The government encouraged its officials to approach businesses and have close contact with entrepreneurs. At the same time government staffers were warned to guard against corruption. The year 2009 was designated a "Company Service Year", when an expressed focus of the government work was to promote "government-corporate coordinated operations to overcome economic difficulties."