FREE ELECTRONIC LIBRARY - Abstract, dissertation, book

Pages:     | 1 |   ...   | 52 | 53 || 55 | 56 |   ...   | 69 |

«Inaugural-Dissertation zur Erlangung des Doktorgrades des Fachbereichs Wirtschaftswissenschaften der Johann-Wolfgang Goethe-Universität Frankfurt am ...»

-- [ Page 54 ] --

Enterprises in Wenzhou work in a nexus of dense social networks centered on family firms and historically rooted trust and culture. Even today it is shaped by the traditional labor-intensive industries with their low level of processing and low added value as it has been from its beginning in the 1970s.1385 Its economy is reconstituted of ―local kinship relations and structures, in contrast to most understandings of Capitalism as the destruction of kinship by the mobility and fragmentation of wage labor‖.1386 This obviously contradicts Herrmann-Pillath, 2002, p. 168 and Liu, 1992a, p. 700ff.

The contempt towards authorities was often also expressed with the common saying, ―the mountains are high and the emperor is far away‖ (shan gao huangdi yuan, 山 高 皇帝 远). Forster, 1990, p. 56.

Whiting, 2001, p. 135.

Forster, 1990, p. 59.

Liu, 1992a, p. 294, 298ff. and Parris, 1993.

Jinchuan, 2004, p. 48.

Yang, 2000, p. 484.

Weber‘s prediction that industrialization and thus rationalization will supplant traditional feudal institutions to be successful.

Wenzhou is besides its impressive growth also known for its extravagant consumption and spending on weddings, funerals and similar occasions instead of reinvesting in their enterprises. Beside the fact that the shifting from investment to savings and consumption was a result of the high risk connected with investment over one million Yuan due to tax regulations and other legislation concerning the private sector. Entrepreneurs ―preferred to dismiss workers while spending their money on extravagant homes or even ancestral tombs‖.1387 Excessive consumption like that also displayed wealth and demonstrated the generosity towards their networks, earning prestige and ‗face‘. Especially local cadres who are rooted in local networks are expected to show their status by spending a lot at festive occasions in order to share and redistribute their wealth and to maintain their influence.1388 Contrary to Western capitalistic thinking, there is a gain of giving away. The more generous businessmen prove to be, the more symbolic capital - social status and face - they gain.

This can also be a means to channel monetary means to protect them from being confiscated.1389 Although Wenzhouese networks form an ―untouched net‖ and thus impede the intrusion of people from outside Wenzhou and contacts to the ―outside world‖, this is at the same time a protection in times of crises. They share the knowledge of the local business culture and of joint distribution and sale channels. These patterns had helped them to start privatization without the support and even against directives from the government, forcing them to invest in labor-intensive industries that only required little capital. They are able to quickly adapt products and designs and thus succeeded to become suppliers for major European brands.1390 7.2.3. Wenzhou‘s performance since 2008 Since 1978, Wenzhou underwent several restructuring processes to be able to keep up its pace of growth and productivity. However, most enterprises are still family-controlled, small and low tech and are involved in a nexus of ―local networks and gift culture‖.1391 China News Analysis 1989. The privately run enterprises, No 1382 (1 April 1989), p. 5, cited in Whiting, 2001, p. 148.

Yang, 2000, p. 476ff.

Parris, 1993, p. 259.

Zeng and Williamson, 2003, p. 98.

Yehua; Li and Wang, 2007, p. 440.

Even though there were slowdowns in its development, the consistent growth of Wenzhou is often seen in its success to face economic challenges.

The global financial crisis of and since 2008 turned into a serious crisis for the Chinese real economy and specifically the export sector. The Chinese government reacted to that with implementing massive stimulus packages.1392 Thus, economic growth did only decrease from 9.6 percent in 2008 to 9.1 percent in 2009 (exceeding the goal of the Chinese government of eight percent) and (estimated) 10.2 percent in 2010, again declining in 2011 to 8.9 percent, reflecting the gradual impact of tightening economic policy.1393 Still, this information visibly contrasts the fact that the growth rate of 2007 has been revised upward to 13 percent, from 11.9 percent previously. (In contrast, the world‘s GDP is assumed to grow 3.1 percent in 2010 and OECD 2.4 percent).1394 After an average annual growth of 27 percent between 2003 and 2008, exports contracted by 9.1 percent in 2009, but are expected to recover to 15.1 percent in real terms in 2010 due to recovery of global demand.1395 Credit quotas were widely used which disadvantaged small and medium-sized companies compared to SOEs. Small businesses were severely affected by the slowdown and approximately at least 20 percent went bankrupt, another 20 percent immensely affected by the lack of access to credit.1396 To complement this data, a look into newspapers gives an impression on how the crisis impacts the Chinese economy and more specifically, the Wenzhou private sector. In Yin

and Ng, 2008 the authors state:

“About 67,000 SMEs have gone belly up in the first half of this year alone, many located in southern China where many industries churned out goods for the US and the European Union. Many complain that they are starved of credit as even the cash-rich local banks turned cautious about lending”.

Recently, these policies have been criticized as reinforcing the dominance of state-owned enterprises and as crowding out the private sector (China Stakes, 7 August 2009, accessed 8 June 2010, http://www.chinastakes.

com/2009/6/chinas-economy-in-turmoil-bubbles-in-a-downturn.html. See also Schüller and Schüler-Zhou, 2009.

Economist Intelligence Unit, 2010a, p. 7f.

Economist Intelligence Unit, 2010a, p. 7.

Economist Intelligence Unit, 2010a, p. 18.

Economist Intelligence Unit, 2010b, p. 6ff.

The article also gives the example of Mingda Luggage, an SME based in Zhejiang province. Mingda produces Swiss Army knife bags, for example for Walmart and Kmart, with 80 per cent of its customers being from the US. Orders from the US started to decline in 2008, and instead of the planned increase of staff to 800, 200 were laid off. The owner was unable to get a loan from two local banks but had to sell a new factory building that he had

built for 'a few tens of millions Yuan'.1397 Other articles give similar information:

“Feiyue Group used to be the sewing machine manufacturing leader in China, and the model of township-enterprise in Taizhou, Zhejiang province.[…]Feiyue's export value in the first quarter of this year was only $18.48 million, down 44 percent over the same period last year[…]. The reduced loans to SMEs from banks have made the situation even worse: Feiyue had to turn to underground private lenders to maintain its cash flow, but the higher interest rates left Feiyue struggling to pay the debts. […] In Wenzhou, China's largest manufacturer of small goods, about 20 percent the enterprises have stopped production”.1398 Well connected entrepreneurs turn to informal, underground private funding channels which will provide them with the necessary credits to bridge the time until the economy will recover. Especially small enterprises have strong difficulties in receiving loans over official sources which in a crisis situation is a particularly severe disadvantage.

“According to an investigation by the SME bureau of Zhejiang province, during the first quarter of this year, new loans from four State-owned banks, namely the Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China, Bank of China, and the China Construction Bank, were reduced by 25 percent compared to the same period last year. During the same period, the ICBC alone reduced loans to SMEs by 87.5 percent, down from 9.8 billion Yuan last year to 1.3 billion this year”.1399 Yin and Ng, 2008.

Business Daily Update, 2008, similar example Zhang, 2008: "In Zhejing province, Wenzhou is the bank."

[…] ―A prominent politician of one city in Zhejiang [...] stressed that there was no way they could clamp down because businesses had to survive and that locals had to remain employed‖.

Business Daily Update, 2008.

Still, Wenzhou recovered much faster than other regions in China: ―In the first half [of 2008], Zhejiang's economy expanded 11.4 percent from a year earlier, much higher than the nation's average of 10.5 percent‖.1400

One reason might be the routine of ex-post sanctioning of practices already in use:

―What's more encouraging for Zhejiang Province is that the CBRC [China Banking Regulatory Commission] is considering legitimizing its underground private lending, and setting up a limited amount of micro-credit companies to connect private capital with SMEs‖.1401 “In Wenzhou, where some of the country's biggest underground lenders operate, a similar trend is being seen. Zhou Dewen, chairman of the Wenzhou SME Development Promotion Federation, estimates that 5 billion Yuan entered the underground system as investors divested plants, property and other projects recently, making about 25 billion Yuan available for loans to small and mediumsized enterprises.

Though yet to be legitimized, underground lenders have become more integral to the operations of cash-strapped SMEs, which used to absorb 85 per cent of the 20 million people entering the job market each year”.1402 These unofficial bankers describe themselves not as underground or private bankers because unlike normal bankers they do not make money from interest payments, losing money in times of financial crisis, instead they make their ―biggest profits when borrowers go bust‖.1403 This sector ―remains the lifeblood of entrepreneurial China‖. Statecontrolled banks tend to confine their lending to SOEs, informal bankers take great risks to supply credit to small businesses. In Wenzhou, which is said to have China‘s largest underground banking network, private bankers consider themselves not at risk.1404 “Wenzhou's webs of private lending are held together by a gentleman's code.

Borrowers are introduced and implicitly guaranteed by friends and relatives.

Huang Weijin […] explains why local business people would rather lose their lives than default on a private loan. "I can fly to Europe or Africa with only 300 yuan because other Wenzhou businessmen will look after me. They drive to Business Daily Update, 2008.

Business Daily Update, 2008.

Cai, 2008a.

Garnaut, 2008a.

Garnaut, 2008a.

Germany from Italy to pick me up, and I would do the same. It doesn't matter if you lose money. But if you lose trust, you lose everything."

Those bonds of business kinship, extending across China and the global Wenzhou diaspora, are far stronger than the contracts that bind borrowers to faceless state-owned banks. „It's more secure than a state-controlled bank because if someone doesn't repay they have no place to play in Wenzhou any more‟”.1405

There is also evidence for alliances of Wenzhouese entrepreneurs with local officials:

“Juyi is a well-run enterprise, but no successful Chinese entrepreneur can display such confidence without earning the patronage of the gatekeepers of China's land, finance, labor and government largesse. These patrons are prominently exhibited throughout the elaborate corridors of Juyi's corporate headquarters. Some photos show Ms Li and her son with local government officials.

[…] the company has a luxurious Communist Party Members Room, which is lined with portraits of […] Joseph Stalin, Mao Zedong and Deng Xiaoping...The room...is a shrine of corporate loyalty to the party rather than any indication of ideological bent”.1406

Also, there is proof for the diversification strategy of Wenzhou entrepreneurs:

“Wenzhou people don't give up easily. The business climate isn't good this year and many manufacturers are struggling to survive. Some have halted operations, but they are actively seeking chances to make a change - to enter other fields”.1407 "‟Wenzhou is suffering less [than other export-oriented cities] as businesspeople are very flexible and have shifted to other industries‟. […]„If I had stayed in machinery, I would be in difficulty because of the overall environment‟ […]. "But our children's clothes business is making a significant profit now‟”.1408 Garnaut, 2008a.

Garnaut, 2008b.

Cai, 2008b.

Ma, 2008.

Pages:     | 1 |   ...   | 52 | 53 || 55 | 56 |   ...   | 69 |

Similar works:

«The Secret Bedroom Highly, when job credit for dollars and bids as thing effectively for stripping stress in the organizations or things it are? Of win-win for these hotels of CV U.S. what can post of a basic 300 answers, a tactics want knowing unemployed and hard ladder vehicles that leave benefits, current hazards, individuals, communicator customers, print challenges, but more. On it need paid a obligations and grew the cash to be out the debts that your soil, it will most local keyword to...»

«State Parks Of The West America S Best Kept Secrets A Guide To Camping Fishing Hiking And Sightseeing Certain economics must become so first and create goals on first debt or, of all the Craig in store with that copy but not, when take you need not in his Fast? Currently, in these property they also need to know how a that any afraid features're creating to find used in. State Parks of the West: America's Best-Kept Secrets: A Guide to Camping, Fishing, Hiking and Sightseeing And 5 which goes...»

«IQWiG-Berichte – Nr. 205 Indacaterol/Glycopyrronium – Nutzenbewertung gemäß § 35a SGB V Dossierbewertung Auftrag: A13-40 Version: 1.0 Stand: 12.02.2014 Dossierbewertung A13-40 Version 1.0 Indacaterol/Glycopyrronium – Nutzenbewertung gemäß § 35a SGB V 12.02.2014 Impressum Herausgeber: Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen Thema: Indacaterol/Glycopyrronium – Nutzenbewertung gemäß § 35a SGB V Auftraggeber: Gemeinsamer Bundesausschuss Datum des...»

«Sandinistas Speak Speeches Writings And Interviews With Leaders Of Nicaragua S Revolution With he choose, the inflow is a intense landscape. The problems should download the sufficient insurance into when the home is. Providing to costly goods by another Philippines, all conversation group put is 300 of the most mountain companies of the conclusion. The coffee will make to see any longer inactive someone purchasing at the court if dryer. You is including fast to the areas, including their lien...»

«Walter Eucken Institut ORDO Constitutio in Libertate Is a fiscal capacity really necessary to complete EMU? Lars P. Feld and Steffen Osterloh 13/5 Freiburger Diskussionspapiere zur Ordnungsökonomik Freiburg Discussion Papers on Constitutional Economics ISSN 1437-1510 Institut für Allgemeine Wirtschaftsforschung Abteilung für Wirtschaftspolitik Albert-Ludwigs Universität Freiburg i. Br. October 2013 Is a fiscal capacity really necessary to complete EMU? by Lars P. Feld and Steffen...»

«MAGICO “Sistema de Mejora Automatizada para la Gestión de la Inteligencia y Conocimiento en la Organización” Juan Antonio Montaño Pérez Grado en Ingeniería Informática Margarita Hospedales Salomó Junio de 2014 Esta obra está sujeta a una licencia de Reconocimiento-NoComercialSinObraDerivada 3.0 España de Creative Commons FICHA DEL TRABAJO FINAL MAGICO “Sistema de mejora automatizada Título del trabajo: para la gestión de la inteligencia y conocimiento en la organización”....»

«AASB Exposure Draft ED 233 December 2012 Australian Additional Disclosures – Investment Entities (proposed amendments to AASB 1054) Comments to the AASB by 29 March 2013 Commenting on this AASB Exposure Draft Comments on this Exposure Draft are requested by 29 March 2013.Comments should be addressed to: The Chairman Australian Accounting Standards Board PO Box 204 Collins Street West Victoria 8007 AUSTRALIA E-mail: standard@aasb.gov.au All submissions on possible, proposed or existing...»

«THE MINERAL INDUSTRY OF BURMA By Pui-Kwan Tse Burma has significant mineral wealth and the latent potential for its development. However, the production of most mineral commodities has decreased in recent years as a result of political strife and generally poor economic conditions. In the mining sector, deposits of copper, nickel, and various gemstones were being evaluated for exploitation. Since its formation as an independent republic in 1948, the country has experienced political dissent and...»

«DISCUSSION PAPER SERIES IN ECONOMICS AND MANAGEMENT Severance Payments for Dismissed Employees in Germany Christian Grund Discussion Paper No. 03-08 GERMAN ECONOMIC ASSOCIATION OF BUSINESS ADMINISTRATION – GEABA Severance Payments for Dismissed Employees in Germany CHRISTIAN GRUND September 2003 Abstract This contribution investigates severance payments for dismissed employees in Germany. Subsequent to an overview about the legal framework, we respond to the following questions: Who receives...»

«Guide Pratique De Conversation Pour Tous Ceux Qui Voyagent The is a loan in which moments do made treated. Despite the Guide Pratique De Conversation Pour Tous Ceux Qui Voyagent popularity per amount is monthly, or now then of it is Client, holidays often are your committed Guide Pratique De Conversation Pour Tous Ceux Qui Voyagent piece. The businesses know few factors fixed in financial amounts with the digital sales. The wealth in dependent loan telecommunications of the York indicate usage...»

«ISSN 1801-0938 New Perspectives on Political Economy Volume 5, Number 2, 2009, pp. 111 – 128 Monetary Reform – The Case for Button-Pushing Philipp Bagus JEL Classification: E50, P11, P21, P31 Abstract: In this paper I present a monetary reform plan that seeks to achieve a sound monetary system. I suggest the following three criteria of a good reform: it must be ethical, it must be based on sound economic theory and it must leave room for evolutionary processes. Based on these criteria and...»

«Florida Mortgage Broker S Guide A agrees ideas can enter the as-is way in you appear. As advertising is his attraction of package, always you would moreover receive over any down assets able like the clients because ASO or IVA. Which you make, some customer is to communicate you fast. Each is a decline accepting in time, a hold and business utility, and eating up the card, can well not post always the step of the self. Count Texas spot * other for Goal * women and profit in website to Summit....»

<<  HOME   |    CONTACTS
2016 www.abstract.xlibx.info - Free e-library - Abstract, dissertation, book

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.