In some other coastal provinces, in contrast, the manufacturing sector continued to play a dominant role in the local economy, despite domestic overcapacity and fewer overseas orders.

In Zhejiang's neighboring Jiangsu province, the manufacturing sector grew 11 percent in the first three quarters while the service sector grew only 9.4 percent.

And in Shandong province, manufacturing grew 10.7 percent while the service sector grew 9.3 percent.

Zhejiang's advantage, according to Zhu Huasheng, associate professor of economics at Beijing Normal University, can partly be explained by the clusters of private enterprises in its different cities.

Zhu noted that the majority of the enterprises in Zhejiang, especially those in the south of the province, are privately owned.

"So they are very sensitive to market signals. And once their products are seen as not being competitive enough, they can change their production strategy almost overnight."

Through the process, companies in each city in Zhejiang have developed their comparative strengths and niche products.

For example, while companies in northern Zhejiang's Ningbo are good at competing in the men's apparel market, those in southern Zhejiang's Wenzhou mostly specialize in the production of men's leisure wear, Zhu said.

Of course, amid private enterprises' ceaseless metamorphosis, some have decided to become more service-oriented, and even to become fully fledged service companies.

Zhejiang is the home of Alibaba Group, which owns the country's largest e-commerce and online payment platforms. Over the years, many e-commerce and logistics companies have appeared in Zhejiang.

That means that the largest variety of shirts, shoes and indeed nearly all daily goods is available to many Chinese consumers with a click of a mouse in a virtual world owned by Zhejiang businesspeople.

Nationally, online shopping transactions were equivalent to 3.3 percent of retail revenue in 2010, and roughly 4 percent in 2011.

Alibaba Group, which occupies more than 50 percent of China's online shopping market, claimed 19.1 billion yuan in total sales on its all B2C/C2C platforms on Nov 11, a major shopping day for urban youth.

While in comparison, in October, the national retail volume was nearly 1.9 trillion yuan, or 61 billion yuan daily.

Alibaba's dominating market strength is certainly unique. It did not come from building roads, railways or airports. It does not even cause traffic jams. The problem, experts say, is that this cannot be replicated by other provinces.

Contact the writer at zhengyangpeng@chinadaily.com.cn

 

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