Inside China Today - Ten thousand businesses in strife as Wenzhou enters economic downturn
Due to a range of influential factors such as escalating raw material costs, and unexpected Renminbi exchange rate trends, the most prosperous city in Zhejiang province, Wenzhou, has entered an economic downturn. Approximately twenty percent of businesses have ceased production, or have reduced production by half.
According to Central News Agency reports in Taipei on July thirteenth, the China Economic Net has recently revealed the major reasons why manufacturing businesses are facing difficulties. These include escalating production costs, raw materials, and gains in the renminbi. Currently out of three hundred thousand manufacturers in Wenzhou city, approximately sixty thousand have completely or partially ceased production, of these; two thirds have officially shut down.
Media reports state many business owners feel the situation is hopeless: to stop production is to await demise, while continuing production would hasten demise.
A medium shoe factory owner by the last name Xie said, “After one season of hard work, our calculations have revealed little profit, and so we decided to sell the factory.”
However, a recent report published by the Wenzhou Shoe [Business] Association indicates that medium to large shoe enterprises, “are flourishing in both production and sales”, because of being established earlier and market transfer. It stated that the ones that had shut down were smaller enterprises.
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