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Industrial success demands careful mix of conditions

Updated: 2013-03-28 07:40
By Shi Jing ( China Daily)

Industrial success demands careful mix of conditions

Wenzhou Financial Reform Plaza, launched in August 2012, will provide a range of financial services to small and micro-sized enterprises, including private capital management and overseas investment information. [Photo/Provided to China Daily]

Wenzhou Financial Reform Plaza, the showcase of the government's ambitious efforts to create a new financial order in this hotbed of private enterprise, is located on a four-lane boulevard in an area that is home to many modern, but sparsely occupied, factory buildings.

There are few visitors to the plaza either.

"It is not that we want to hide from the public," said Cen Li, its general manger.

On the contrary, "we are here for a very distinct reason", he added.

The choice of location seeks to convey a strong, clear message that financial reform is essential to facilitate the much-needed industrial restructuring on which the future development of Wenzhou will depend, Cen said.

"Financial reform is tied inextricably to industry restructuring."

Indeed, financial reform is a means to facilitate the restructuring of what many see as Wenzhou's old and worn industrial structure, which is dependent on a plentiful supply of labor and land.

When the cost of both began to rise in recent years, the long-established Wenzhou development model - that had fascinated many people on the mainland and elsewhere - began to fall apart.

Ask 43-year-old Pan Jianzhong, owner of Juyi, one of Wenzhou's largest shoe factories.

Taking over a business started by his mother in 1988 with only 5,000 yuan ($793), he has expanded it into an enterprise with annual sales in excess of $100 million. It employs more than 5,000 workers producing 18 million pairs of shoes a year.

Pointing to a new sewing machine built with German technology, Pan said that he is well ahead of most of his peers in terms of automation.

A graduate of a technology college in Shanghai, Pan said that he has a passion for machinery.

"If I were as conservative as many of my colleagues in this business, I would have to hire at least five times more workers to produce the same quantity of shoes.

"I probably would not have survived the double blow of slowing overseas orders and tightening labor supply at home" that have combined to wreck many Wenzhou manufacturers, he added.

But some forward-thinking Wenzhou entrepreneurs have gone even further than Pan in innovation.

We also recommended:

Timeline of Wenzhou financial reforms

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