Huakang Computer Technology Company is one of 100 or more businesses in the Sanjiang Industrial Park in Dongguan's Hengli Town. When this reporter visited the park, some of its factories were obviously empty, and it also contained some half-built plants whose construction had been abandoned.

But a new Huakang plant was under construction, at a cost of RMB 10 million. The company has grown from a small workshop producing computer cases in 1998 to a computer manufacturing firm of considerable scale, whose scope of manufacture now includes CPU coolers, mobile hard disc cases, laptop coolers and monitors.

Su Mingying is a young woman from Henan Province who came to work in Dongguan after graduating from junior middle school. She works on Huakang's computer casing production line. A few years ago when the factory was doing good business she earned RMB 2,000 a month, and was the envy of her fellow villagers when she went home at Spring Festival. But as business these days is slack she earns only half that amount.

The falling demand for Chinese products since the US financial crisis has seriously affected China's export-oriented enterprises. "Even big companies like Huakang are feeling the pinch, so you can imagine how difficult it is for small companies to stay afloat," Tang Mo said.

The Yingqi Industrial Company in Dalang Town nearby Huakang has met similar problems. Yingqi had orders worth RMB six million in the first half of 2008, but, "The market is shrinking, and the number of orders has fallen," according to Yingqi CEO Zeng Tianren. Shrinking credit has prompted consumers to cut back on consumption which has, in turn, slowed market demand and sent it into a spin, Zeng said. Mistrust among enterprises has created loss of confidence in the market and consequently the new expense of insurance on goods. Since the middle of 2008, therefore, the more orders an enterprise receives, the more it may lose.

Self Salvage

"Now excellent enterprises make meager profits, well-run enterprises keep their sheet balanced, and the rest operate at a loss," says Zeng Tianren of Dongguan's manufacturing status quo.

In answer to the question Wang Yang, secretary of the CPC Guangdong provincial committee, raised on how to evaluate the impact of the present crisis on industry, Zeng Tianren reckoned that around 30 percent of enterprises would be affected. Wang Yang commented that this seemed to him a conservative estimate. Zeng Tianren's opinion is based on the volume of textile and garment industry workers laid off in 2008 from factories in the surrounding areas that have stopped production. "All we can do is try to avoid losses and hope we can get through this difficult period," Zeng concluded.

The Yingqi Company is the Chinese mainland headquarters of the Hong Kong Maorong Group. Prior to the world financial crisis, it produced 13 million knitted garments annually, 60 percent of which were exported to Europe, 25 percent to the United States and the remainder to Canada.

In the face of lower export orders, Yingqi has turned its focus on the domestic market. The woolen textile garments bearing the W&K-brand on display in the company exhibition room are especially designed for the domestic market, Zeng Tianren said. Export-oriented enterprises are generally looking for similar solutions since the decline of overseas orders. Most enterprises in Dongguan formerly specialized in exports because they generate higher profits. "Prices of exported products are 10 to 20 percent higher than those destined for the domestic market, even without taking into account export tax refunds," Tang Mo said. Among China's commodity exports during the first 11 months of 2008, those of mechanical and electrical products were valued at US $761.32 billion, making up 57.8 percent of China's total exports over the period, according to customs statistics.