Wenzhou

True to their adaptive habits, most Wenzhou entrepreneurs are already working new angles -- building distant plants to exploit even cheaper labor, diversifying into new lines, making international alliances in order to claw their way up the technological ladder, spending to establish their products as recognizable brands.

Beginning in penury and hiding for years in legal shadows, China's first generation of proprietor-industrialists has already changed the course of the Middle Kingdom: Even the most resistant statists now acknowledge that the so-called Wenzhou model of economic development -- a Chinese euphemism for unfettered capitalism -- is a triumph.

The "Wenzhou model" of economic development always represents flourishing development of private or individual enterprises. These companies often have their own sources of financing, their own way of marketing and management. In 2002, the number of individually owned units and private companies in Wenzhou stood at 202,458 and 28,430 respectively.

In 2002, share stock companies, private and individually owned companies accounted for 90.1% of the gross industrial output. State-owned companies only accounted for 2.5% while foreign invested accounted for 5.4%. It is estimated that the private sector contributed 80% of the GDP.

Wenzhou has a huge clustering of small to medium size companies. For private companies, the average number of persons engaged in each company stood at 13 in 2002 while the figure was only 2.1 per individually owned company. Among the total 132,746 industrial enterprises, only about 3,700 of them are having annual sales over RMB 5 million. However, there are also some famous large private companies, for example, CHINT (electrical parts and apparatus) and Delixi (electrical apparatus).