A difficult but necessary beginning to recovery

Zheng added that the solution to solving the difficulties related to moneylending is to rebuild the credit rating system.

At the moment, most members of the association face increasing costs of labor, materials and expenses as they strive to restructure their businesses.

"Hopefully the government will issue policies to encourage private SMEs in the ongoing industrial restructuring to produce more value-added products with higher quality, better designs and at lower costs," said Zheng.

Zheng added more enterprises are focusing on manufacturing and designing high-quality and personalized products aimed at middle-class consumers instead of relying on a large amount of orders to meet mass-market demand.

Holding a similar opinion, Pan Jianzhong recognized that the reform will not bring any changes to his enterprise, which is already undergoing a restructuring.

"Raising the efficiency of all aspects of shoemaking is the only way to stand out amid tough competition," said Pan, manager of Juyi Group Co Ltd, a shoemaker which employs around 5,000 people in Wenzhou and produces 12 million pairs of shoes annually.

It was Pan's bold idea a decade ago to introduce a degree of automation unseen in most of the city's shoemaking factories.

Pan also shortened the workflow process and made the overall production process more efficient.

"I prefer to take the advantage of the developing economic growth in Wenzhou to extend my cooperation with international brands and increase the quality of my products," said Pan.

Pan added that private enterprises have to find their own ways to restructure.

Contact the writer at yuran@chinadaily.com.cn