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Economy snoozing? Not Zhongshan's
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Zhongshan, a prefecture-level city located in the west of the Pearl River Delta, is home to scores of specialized industrial townships and state-level economic development parks. The city is making itself an industrial heartland in southern China and is managing to stay strong against the backdrop of the financial crisis.

Since the second half of last year, a global crisis and weakening demand for Chinese exports have dealt a harsh blow to Zhongshan's economy.

"The worst of the storm came at the end of last year, and jobs were cut 20 percent due to the shrinking orders," said Xie Zhongfan, executive deputy mayor of Zhongshan.

To navigate the crisis, the local government has tried to recalibrate its economic model and stoke up domestic investment, using policies to increase consumer demand on the Chinese market, which is too big to ignore.

Thanks to grants, tax breaks and other subsidies, governmental policies are beginning to work. Signs such as investments from big companies and the resurgences of small start-ups suggest that the economy is regaining momentum. Alongside improvements in GDP, consumption of power and industrial output, the job market has steadily improved during recent months.

The economy of Zhongshan relies heavily on the export of textiles, hardware and lighting. Since the financial crisis, private companies have been able to shift from overseas markets to the domestic market. Xie also says that domestic private companies are actively responding to the economic downturn and have been able to shoulder more social responsibilities.

"In Zhongshan, the private sector accounts for more than half of the total industrial output," said Xie. "We are very glad that domestic private enterprises have become the backbone of the regional economy and so we are better able to withstand the impact of the financial crisis."

In the first half of this year, the export volume declined 10.9% year on year, but the downward trend has tapered off and is beginning to reverse.

Despite some businesses shutting down, the number of enterprises that have opened is more than three times as many as the ones that closed, according to Xie.

Another pillar of the city’s economy is its industrial cluster formation. It helps companies cut production costs, explore the home market and build a network of expertise.

Lighting Era Center, is a large one-stop shopping mall for people across China to buy lights. 

Zhongshan's Guzhen Township, home of a collection of industrial clusters focusing on lighting, is a "poster child" in this respect.

Nearly every lighting component, from metal to bulb, is available somewhere in the township.

''Over the last 30 years, Guzhen has become the world's largest production center of lighting,'' said Wu Runfu, the township secretary.

With such a strong specialty in lighting, many lighting companies in other places have moved to Guzhen. They now buy most of its bulbs, metals and glass nearby, and set up sales outposts in town.

''The market is here, and there's a complete supply base here,'' said Zeng Shuneng, managing director of Lighting Era Center, based in Guzhen. "We expect the number and scale of companies to continue to grow."

(China.org.cn by He Shan August 27, 2009)

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