国内英语新闻：SMEs scouting for ways to remain in business

BEIJING, Dec. 1 -- Amid the coupling effects of shrinking global demand and rising operating costs, it has been a dramatic upheaval this year for domestic small and medium-sized enterprises (SMEs) after China started its reforms 30 years ago.

    Even as the scene appears a bit scary, there is still a ray of hope if only entrepreneurs note the writing on the wall and go all out to cut costs before they raise the clamor for a bailout.

Two women make beds on a production line of the small private firm Nangang Shoemaking Factory in Foshan, Guangdong province.

In the first half of 2008, much before the world saw the capital markets going topsy turvy amid the global economic slowdown, over 67,000 SMEs in China went bankrupt, while more than 10,000 labor-intensive textile enterprises downed shutters, according to figures from the Department of SMEs under the National Development and Reform Commission.

    In October, 714 companies were closed in Dongguan in Guangdong province, home to over 60,100 private companies and a major manufacturing center in China.

    "We will see more companies closing in the coming months, with the figure likely to cross 1,000 after Christmas," says Dongguan Deputy Mayor Jiang Ling.

    Most of the international buyers of Chinese products failed to get letters of credit in October leading to significant cancellations of Christmas orders, says Frank FX. Gong, chief China economist at JPMorgan Securities (Asia Pacific) Limited in a recent report. "Indeed, 'things suddenly ceased' was the common comment we heard on the ground lately," he says.

    But for some like Luo Chun, sales director of tin box maker Dongguan Tinpak Co, the freeze on Christmas orders has not yet meant closing. Luo says overseas order fell by 10 percent from June to October, normally the peak time for Christmas orders.