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Cradle of China's private economy offers a blueprint to counter US tariffs

Cradle of China's private economy offers a blueprint to counter US tariffs

Given the US administration's shifting tariff policies, many global manufacturers may feel apprehensive about their growth prospects. Uncertainty in trade dynamics often affects firms reliant on global trade flows. But in Wenzhou, one of China's most fertile entrepreneurial hubs, businesses transform US tariff pressures into opportunities, ensuring enterprises thrive across generations.

In the eastern Zhejiang Province, Wenzhou is renowned as the country's capital of private and family-run manufacturing businesses. This so-called  'Wenzhou model'—marked by resilience, vertical integration and strategic client relationships— may offer a new template in combating the impact of the tariffs. At the core of this model is a mindset - one that many entrepreneurs around the world may be familiar with—that adversity can often lead to opportunity.

Wenzhou’s manufacturing clusters span optical eyewear, footwear, electrical products, new energy equipment, advanced materials, auto parts, among others, in which there are a number of private firms operating at various ends of the supply chain. Many of these companies emerged during China’s reform era of the late 1970s and have gradually evolved into thriving high-end industry leaders, now led by the founders' children or even grandchildren.

The compound of Zhejiang Bridgold Copper Tech Co. Ltd. in Yueqing County of Wenzhou City, Zhejiang Province, on 6 June 2025. Photo: CGTN

At Zhejiang Bridgold Copper Tech (Bridgold), a copper wire and busbar manufacturer, third-generation promoter Shi Wen said the 43-year-old company holds approximately 20% of the global market and 30% in China for braided copper wire. Bridgold's main customers are European electric vehicle firms that export to US, making tariffs an indirect challenge. To cushion the impact, Bridgold integrates deeply into clients’research and development (R&D) processes.

"We make flexible busbars for a wide range of industries and customers trust us. One more strategy is to explore more Asian countries, especially those in the Belt and Road Initiative. Every big challenge may bring a chance for us to grow," she said.

Zhejiang Tongda Optical (Tongda), a major eyewear exporter, is also adjusting its strategy. Virginia Huang, the founder’s daughter-in-law, sees new opportunities in the Middle East and domestic branding.  

A worker operates an automated busbar machine at Bridgold’s factory in Yueqing, Wenzhou, on 6 June 2025. Photo: CGTN

"The company started in 1986 with watch repairs. Now we produce eyewear and most of our clients are from Europe and the US, including in the industry’s top-five," she said.  "Our strategy is to expand in different markets like the Middle East and build our own brands for the domestic market."

Huang said competition is very strong and consumer preferences are more traditional. "Each market has a different preference for design and materials, so we have to plan it very well. But we already have a lot of sourcing, designs and professionals from the Chinese market."

Both Tongda and Bridgold prioritise high-tech manufacturing, using automation and operational management information system (MIS). For Huang, technology upgrades are non-negotiable: "As a manufacturer, we really need to do these things ourselves."

Virginia Huang, sales director of Zhejiang Tongda Optical, shows an eyewear component at Tongda's high-tech workshop in Wenzhou. Photo: CGTN

Meanwhile, domestic-focused firms like Laorentou, a century-old footwear company, have a different vantage point on tariff uncertainties. General manager Ye Qihao noted that mutual referrals among firms help manage fluctuations—exporters share leads with domestic players and vice versa, reinforcing the cluster’s ecosystem.
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The Wenzhou model works well with a focus on deep client integration and high quality manufacturing. The city's gross domestic product (GDP) rose 6.7% year-on-year in the first quarter of 2025 to $32.9 billion, outpacing national and Zhejiang averages. Wenzhou also sent a record 774 companies to the 137th China Import and Export Fair (Canton Fair), showcasing its resilience amid global headwinds.

Across these firms, common patterns emerge: deep client integration and uncompromisingly high-quality manufacturing. Business leaders have an intricate knowledge of their product and are fleet-footed when it comes to seeking geographical diversification. They understand that overreliance on a single client or market poses risks and instead seek resilience through creativity and strength. Diversification is the name of the game, and while tariffs and other business challenges may come and go, the rule of thumb remains— as Tongda's Huang said, "You have to be creative, you have to be strong to survive."

Ankit Prasad is a CGTN biz commentator.