Survival of fittest hones China private firms

Beijing

CHINA's private manufacturers, scorched for years by surging wages and anaemic foreign demand, are reinventing themselves.

In coastal Zhejiang province's Anji county, which produces 70 million chairs annually, chair maker Dakang Holding Co is competing with lower cost Vietnamese rivals and facing rising costs at home. It spent 71 million yuan (S$14.5 million) on automation in 2013, shifted to making chairs for gamers, and restructured management. Now sales are surging 20 per cent annually and profit margins are up almost 8 per cent. "Our order book is full through 2020," says vice-president Yuan Guofei.

Such success contrasts with China's bloated state sector, where pledges to restructure have given way to the need to boost activity in old industries as a prop for growth. While state firms often operate in industries with limited co…