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People's Daily Online>>China Business

Over 200 enterprises remain closed in Nov. in E China province

(Xinhua)

19:11, December 29, 2011

HANGZHOU, Dec. 29 (Xinhua) -- More than 200 enterprises remained closed last month in east China's economically vibrant Zhejiang province, a local official said Thursday.

However, Huang Yaping, deputy head of the provincial human resources and social welfare bureau, said only 3.66 percent of the enterprises the provincial government monitors were affected while the vast majority remained healthy.

Among the closures in November, 83.66 percent were small and micro- enterprises, Huang said, adding that another 42 key enterprises laid off employees.

China's small private enterprises are operating at a tough time when demands from overseas markets are shrinking, material and labor costs at home are rising, and banks have been ordered to tighten credit to rein in inflation.

Zhejiang is considered a parameter of the health of China's small- and medium-sized enterprises as sharp-witted Zhejiang businesspeople largely drove the boom of the country's private sector after the government unleashed market economic reforms over three decades ago.

But in recent months, scores of businesspeople in Zhejiang, particularly the city of Wenzhou, fled or committed suicide over debt solvency when banks rolled back credit from the binge created to stimulate the economy during the 2008-2009 global financial crisis.

The government intervened by slashing taxes, offering tax breaks, and ordering banks to continue lending in order to save qualified enterprises from floundering.

Huang said small and medium-sized enterprises in general are still facing difficulties but overall business operations remained stable and massive lay-offs were prevented.

The government recorded 3,432 lay-offs in Zhejiang's key enterprises in November, Huang said, adding that the lay-off rate was about the same as it was a year ago.

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