Good swimmers at length are drowned, goes a Chinese saying.

That seems the predicament of Yangtze River Delta region, the nation's economic warhorse amid the global economic meltdown.

Consisting of Shanghai and the two neighboring provinces of Jiangsu and Zhejiang, the region bears the brunt of the slowing export growth and the global investment freeze.

A number of key indices indicate that the region's economy, which ballooned to 5.6 trillion yuan, or 22 percent of the nation's total GDP in 2007, is slowly losing steam. For instance, there have been reports that the industrial sector profit in the region fell nearly 44 percent between January and September last year.

Yangtze River Delta relies mostly on foreign trade and its economy would feel the negative impact of the crisis, said Yu Hongsheng, researcher, Shanghai Academy of Social Sciences. Growth in traditional manufacturing sector has also slowed down.

"The region has a lot of foreign trade companies. For a long time these enterprises concentrated on the US and EU markets. But now these markets have shrunk," said Huang Renwei, deputy director, Shanghai Academy of Social Sciences.

In Shanghai, a key driver of the region, the economy that has maintained a much higher growth rate than the nation's average for the last 16 years slowed last year. GDP growth in 2008 was estimated at 10 percent, down from 12.7 percent in the previous year. The target for GDP growth is 9 percent this year, and the government plans to keep the jobless rate under 4.5 percent.

"We are seeing negative growth in fiscal revenue, industrial output and exports, and there is increasing pressure on employment," said Shanghai Mayor Han Zheng.

The two resilient co-drivers of Zhejiang and Jiangsu also reported sluggish growth.

Take the case of Wenzhou in Zhejiang. Over 8 percent of the shoes manufactured in the world comes from Wenzhou, while in the case of metal lighters the city has a global market share of 90 percent.

But in such an economy where private sector takes the lion's share in GDP growth, the global downturn is already making deep inroads.

According to an official survey on 18,000 Wenzhou enterprises in September, 1,460 of them, or 8 percent, have ceased production while 304, or 1.6 percent, have gone bankrupt. Both figures are expected to rise sharply as the nation's economy retreats further.

Exports are plummeting while loan defaults of overseas buyers are also rising. "Approximately 30 percent of the foreign trade companies have seen a fall in exports," the city's Vice Mayor Chen Hongfeng told China Business Weekly.

Loan defaults surged 91 percent year-on-year to US$2.1 million in the first three quarters, with 70 percent of the arrears due from the US and EU companies.

Small and medium-sized enterprises (SMEs) in the region, once a dynamic sector, spent a particularly dramatic year amid shrinking overseas orders coupled with rising labor and land costs.

Di Na, deputy director general of SME department at Ministry of Industry and Information Technology, said small companies in the Yangtze River Delta as well as in Pearl River Delta regions were hit especially hard because many of them are export-oriented, labor-intensive and engaged in traditional processing businesses.

"For these reasons, the rigorous economic situation this year hit SMEs in Yangtze and Pearl rivers delta regions," the official said.