Growing domestic demand means optimism in the east

Source: Xinhua | February 23, 2009, Monday |

Print Edition

ALTHOUGH the world financial crisis has cast a big shadow on China's prosperous eastern coastal regions, companies in these areas are very likely to see the first gleam of economic recovery in 2009, according to experts.

Confidence stems mainly from growing domestic markets, which are being helped by the government's stimulus package and a series of favorable policies.

Just two months ago, more than 60,000 businessmen in the eastern Zhejiang town Yiwu - the world's largest small commodities market - were tasting bitterness, as they faced declining foreign demand and fewer orders resulting from the global economic downturn.

The turning point came after the Lunar New Year holiday. On the first trading day after the holiday, the commodities hub witnessed 165,000 customers, representing an increase of 10 percent over the same day last year. Compared with stagnancy of last year, the market regained its vigor as most of the trade dealers came to find business opportunities and increase their orders for commodities.

Zhejiang's neighboring Jiangsu Province saw electricity consumption surge. The province used 443 million kilowatt hours of electricity on the first day of February. The figure rose sharply to 680 million kwh nine days later, indicating booming industrial production.

The confidence of businesspeople in Zhejiang's Haining City - famous for its leather goods - was also bolstered by booming economic activities and increasing demands from domestic markets.

"Right now, we are not as worried as we were last year, when the economic turmoil spread to every corner of the market," said Zha Jialin, vice general manager of Haining Leather Town Co.

Ye Xuekang, general manager of Haining Jinda New Material Co, also felt optimistic, saying that the company is under normal operation and orders from domestic customers have seen an clear increase.

"Some of the production lines have to operate 24 hours a day to meet demand," Ye said.

"It was the shift of focus from overseas markets to domestic ones that helped us. Although surging prices for raw materials and currency fluctuation almost strangled the company, the orders from new markets greatly offset the losses in foreign markets," he said.

Economists said government efforts to increase domestic consumption have made the biggest contribution to the country's economic recovery.

Zhuang Jian, a senior economist with the Asia Development Bank, said: "The country's economy will gradually recover. However, the process may vary largely from one region to another, depending on each region's degree of economic development."

Zhang Hanya, deputy chairman of the Investment Association of China, echoed Zhuang, saying that compared with central and western areas, businesses in eastern regions can do a better job of recovering quickly.

"As for local governments in eastern areas, flexible policies, sufficient capital reserves and fiscal support are the necessities to guarantee economic development," he said.

Economy

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Growing domestic demand means optimism in the east

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