Nearly one year into the global financial crisis, the secret to surviving the storm seems to have surfaced. Perhaps it was the blessing of Typhoon Morakot. Yet even before the typhoon, the quiet town of Huizhou, which lies on the coast of China's Guangdong Province, seemed to be weathering the economic storm quite well.
With its favorable real estate policies and low labor costs, Guangdong has attracted top corporations from all around the world. As a result, local cities such as Huizhou have been transformed into rich, seaside ports with skyscrapers lining the streets.
Then September 2008 came. As American businesses toppled and American consumers became strapped for cash, the toy factories that had come to call Guangdong home for so many years quickly disappeared. As the bleak reality of what might become of the industrial-rich province began to sink in, both the Chinese central government and the local leaders implemented stimulus policies to try to rescue the economy. Although the final lap has yet to be swum, it seems many companies are emerging from the financial crisis…some, perhaps, stronger than they were going into it.
The reason for success is due to a combination of government policies and China's unfaltering national development. TCL, a TV and electronics manufacturing company that also produces brand names such as RCA and Altera, has enjoyed the benefits of China's push to make profits. Like many companies, business since the start of the financial crisis has been low, especially in exports. According to Bo Lianming, TCL's chief operating officer, exports have decreased by about 20 percent. However, instead of drowning in the global market, the company simply switched its focus to the market closest to home—China.
"TCL has yet to fire any employees this year because of the decrease in exports," Bo said proudly. The Chinese TV market has actually been flourishing amid the economic struggle. Bo says TCL currently employs 30,000 people in Huizhou and is producing a whopping 13,000 TV sets a day. Part of this is a result of the government-initiated new-for-old policy, in which villagers can take old electronic products and exchange them for new ones. Add that to a ripe domestic market that is experiencing for the first time what it's like to have cash to spend on luxurious items, and the news for TCL is good...really good. LCD screen sales increased by 248.9 percent in the first six months of this year, as compared to the first half of last year.
Galanz, a Chinese company that focuses on white appliances, such as refrigerators, microwaves and other large items, has also re-proportioned its foreign and domestic market shares. Deputy vice president of Galanz, Yaochang Yu, says that after the Canton Fair last spring, many overseas orders were cancelled. However, Galanz has experienced a 120 percent growth in air conditioner sales and a 40 percent growth in microwave sales in the domestic market.
In addition to upgrading its old electrical products, China is investing money to develop green energy companies, such as by providing subsidies for those that meet stricter environmental standards. As more and more people have found themselves penny-pinching during the crisis, energy-saving and energy-efficient products that last longer and give more bang-for-the-buck are excelling in the global market.
"The Chinese government has put an emphasis on green GDP, the environment and sustainable development," Bo said, noting that TCL is taking, "a very active role in the environmental production industries."