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Technologically superior companies able to buck trend of closure

Jan '09
Since the second half of 2008, private enterprises in Zhejiang Province are facing the biggest difficulties and challenges in history, due to the severe impact of the international financial crisis and dwindling export markets.

Trade and Industry Bureau in Zhejiang Province issued the latest report on the state of the private enterprises as on December 30, 2008, which showed that there were 22,000 private enterprises which had closed down in the whole of 2008.

This shut down figure is a six year high while the number of new registered enterprises fell to a 6-year low; however, the total number of registered companies still grew steadily. The number of newly registered enterprises outnumbered those that had closed down and new emerging business could be seen active in particular.

The total number of private enterprises reached 1,910,000, while those newly registered in 2008 touched 317,000, with 1,000 small employers born every day. There were also instances of enterprises shutting down overnight leaving the workers in the lurch.

In December, the number of companies that closed down suddenly or business owners disappeared in Zhejiang Province was 302 cases, while in November such events were only 99. From amongst companies that suddenly shut down in December, registered capital of 107 enterprises ranged from 1 million to 10 million Yuan, those from 10 million to 100 million Yuan were 35 companies while registered capital of 1 enterprise was above 100 million Yuan.

These failed companies ranged mainly from the exports sector and catering in traditional products. Most of these companies hailed from the textile and the clothing sector and these amounted to 116 companies of all those that suddenly shutdown shutters in December. The report went on to conclude that technologically superior and those companies involved in making value added products were able to buck this trend.

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