Sitting in her booth at the Canton Fair in April 2008, Xu Yunxu could see business was troubled. Her "Trace" brand women's garments had sold to more than 20 countries, but this time some old faces failed to show. Others narrowed their selection of products and were far less enthusiastic and generous in placing orders.

Then, the problem was fluctuating exchange rates and rising costs of raw materials and labor. "Some of our customers were just not in the mood for business," says Xu, chairwoman of Wenzhou Tengxu Garments Company.

Sales worsened at the same fair in autumn, when the global financial crisis made its impact felt across the world. Tengxu's exports dropped 10 percent in 2008. However, the company managed a growth of 18 percent in sales revenue at the end of the year, thanks to an early strategy of establishing brand names and increasing supply to the domestic market.

Xu, 34, who began to retail garments with seed money of 5,000 yuan in 1992, founded the company that snowballed into a manufacturing and trading enterprise with 500 million yuan in turnover last year.

Xu embodies a pioneering business spirit, commonly seen among people in the coastal city of Wenzhou, 650 kilometers south of Shanghai.

"Businesses here felt the economic downturn early last year," Zhou Qizheng, deputy director of Wenzhou's Economic and Trade Commission (WETC), told Xinhua earlier this month. "Firms worked hard to cope with the situation and the government tried to help. The efforts were fruitful. We now see the dawn of an early revival of our economy."

More than 99 percent of local companies are small private firms. Many reported less than 30 million yuan in annual turnover last year. They are mainly engaged in the light industry, textiles processing or leather materials and products. A few are in heavy industry, manufacturing hardware, electrical appliances, or auto parts and vehicles.

"The economic slowdown has affected companies differently depending on their category and scale. Some companies, mostly small, were closed or merged with others," said Zhou.

The government cut corporate taxes and provided low-interest loans. Specialist guarantors and underwriters were encouraged to help enterprises obtain credit. Banks and small loans firms initiated new policies to better address corporate financing, including the acceptance of the delivery orders as a loan guarantees.

"None of the enterprises closed because of lack of financing," says You Jusen, director of WETC Small and Medium-sized Enterprise Division.

Small and weak businesses were encouraged to merge. A case in point was the restructuring of the city's multiple small synthetic leather-makers into four groups with more than 50 percent of the national market.

Companies with low-grade technology or products and highly polluting firms were urged to upgrade plant and adjust production. The government launched 10 programs to help selected firms achieve this goal.