Tough Climate, Big Dilemmas for Small Business

A Dalian clothing manufacturer is confronting one of the many hard dilemmas weighing down small and family business owners in China.

Because foreign demand for the company's goods has softened, the owner plans to modify production and gear his business toward the domestic market. But he's worried about the risks, in part because he says government tax policies favor clothing exporters over domestic-market manufacturers.

"After all, there are tax rebates for exports," said the businessman, who asked not to be named. "Once you change to domestic trade, tax rates may be higher. In practice, there will be more problems."