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People's Daily Online>>China Business

Firms facing up to tough reality

By Ding Qingfen (China Daily)

09:25, November 23, 2011

Chinese exporters are finding they must transform their businesses if they wish to survive the turbulent global economy. It doesn't matter whether the products are silk goods (shown at a summer trade fair in Guangzhou), furniture (made in Dongguan, Guangdong province) or something else entirely. Provided to China Daily

Change is vital in bleak financial times, Ding Qingfen reports in Guangzhou, Guangdong province and Hangzhou, Zhejiang province.

When the global financial crisis hit three years ago, many Chinese exporters crossed their fingers and hoped things would soon get better. Conditions have gotten worse in recent months and the waiting game is over for companies that want to survive.

"Time is pressing. We have to invest more in technology and innovation to make our goods more competitive in the global market," said Zhou Haichang, president of Guangdong-based Guoguang Electric Co Ltd. "This is the only way out, for Guoguang and most exporters."

Business leaders and government officials are driving home the message: Upgrade. Reform. Improve quality. Innovate. But how? Some companies are shifting markets, adding forward-thinking business lines, revamping their structures or setting up operations overseas.

Such major changes aren't easy, especially for smaller companies, but they are vital. "The way ahead could be paved with thorns, but there is no other choice," one observer said.

Guoguang is China's leading provider of speakers and amplifiers, and its clients include the big names of Bose, Sony and Philips. Business last year in the United States, the European Union and Japan totaled $270 million. During the first half of this year, sales grew by more than 30 percent from a year earlier - largely because 2010 was so bad - but the second half "should not be pleasing, with sales level with last year at best," Zhou said.

"The worst time since the financial crisis is coming. To be frank, I am very worried about it."

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