Firms in Wenzhou facing tough times due to weak global demand
An increasing number of companies in Wenzhou, a key manufacturing and export region, have gone out of business, amid difficulties that are even "more serious" than the 2008 financial crisis, an industry leader said.
The alert came as Premier Wen Jiabao warned over the weekend that the economy still faces downward pressure.
Wenzhou, Zhejiang province, is often referred to as a hub of small and medium-sized enterprises.
But it has witnessed a rise in bankruptcies that is even "more serious" than the 2008-09 financial crisis, Zhou Dewen, chairman of the Wenzhou SME Development Association, said.
"We have about 3,000 members and more than 10 percent have closed down and about 20 percent are struggling," Zhou said.
Many SME owners requested financial assistance and advice from the association, he said.
Larger companies are also feeling the heat.
According to a report released by the financial and economic committee of Zhejiang Provincial People's Congress, 140 out of 3,998 large enterprises in Wenzhou closed in the first half of the year while 57 percent of those large companies cut production.
Zheng Zhe, general manager of the Zhejiang Gulifa Group, a Wenzhou-based toolmaker, said his company saw annual sales growth of about 30 percent in the past decade.
