Three days after China Premier Wen Jiabao visiting small and medium factories in Guangdong, the central government will earmark 40 billion (HK$45.7 billion) as a relief plan to help ailing factories in the Pearl River Delta.

Provinical Communist Party Secretary Wang Yang said 35,000 factories in the Delta Region have ceased their operations or moved away in the last five months.  Yet, 40,000 new business spurred up at the same period of time.

The news came on heels of our last post of “China Exporters say Don’t Flinch!”, it demonstrates the fact that the central government is fully aware of the situation, raising tax rebates on exports of textile products and garments and  setting up a pool of fund to the needy industry.

Analysts added that the province is studying ways to control price rises and will announce new measures next month.

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