There is a common saying in China these days: if an old enterprise fails to upgrade antiquated technology it will die; if it does so, it is tantamount to committing suicide.
Tangshan Ceramic Group, the city's largest porcelain ware maker, is a victim of the catch that borrowing funds to modernise can create a mountain of debt.
The 34-year-old firm, China's largest porcelain exporter, is luckier than many other state enterprises, however, as it says it is succeeding in its struggle to escape the debt trap, albeit at a high cost.
Upgrading technology is critical to the survival of ageing and inefficient state enterprises, many of which have focused on increasing production rather than making marketable goods.
Tangshan Ceramic Group's Party Secretary Zhang Desheng , said that the group had spent 20 million yuan (about HK$18.4 million) last year on servicing loans taken out to improve the company's technological capabilities.
This year, interest payments on the outstanding capital again amounted to 20 million yuan, a level of repayment that was set to last for the next five to 10 years, he said.
