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Beijing to tighten credit small business struggling Wenzhou

  Wenzhou is China's economic situation shows the vane, the city's small manufacturers run into trouble, the Chinese economy is an important part of the cast a cloud, ratchet tie dowm and further shaken investor confidence, highlighted the Chinese government in promoting growth and when to strike a balance between inflation risk.

    According to Chinese media reports, because of the success story of the famous entrepreneurs in Wenzhou, more than 20 private small businesses has expired due to inability to pay bank loans bankruptcy. Last Thursday, in the community are worried that the credit crunch in the context of the Wenzhou official urged banks to limit lending rates, increased lending to small businesses.

   Wenzhou workers.booster cables State media reported that the closure of small businesses this week, one of Zhejiang Jiangxiang Yuan Steel Industry Co., Ltd.. The company's sales representative surnamed Li due to banking business failures will withdraw credit. He said the company has over 100 employees, but refused to disclose more information.

    Wenzhou others expressed concern about the business environment. Wenzhou wire and cable industry, small business owners Qiuguo Ning (voice) said, battery clip the government has been committed to supporting private sector development, I have heard enough of this set of rhetoric. Wenzhou hundreds of small wire and cable production companies, Qiuguo Ning is now worried about how he plans to raise capital in the business expansion.

    As part of Wenzhou, China was founded 30 years ago began allowing private enterprise to flourish after the first result of the city, and is considered the cradle of the private sector, these small businesses about the closure of Wenzhou in China reported increased downward pressure on stock and currency markets.

    tow rope Netherlands International Group (INGGroepNV) in Singapore Condon, chief Asia economist (TimCondon) said that due to a large number of enterprises in Wenzhou unsustainable debt burdens on the report, the market once again had a hard landing may be worried about China's economic anxiety.

    Another market in China further exacerbated the fears of small manufacturing enterprises factor is released on Friday, HSBC China's manufacturing purchasing managers index showed manufacturing activity in China consecutive month in September, contraction. Since the index includes data collected samples of small businesses, so it can be seen as a response to China's private sector performance indicators. Analysts estimate that China's small and medium private enterprises employed 80 percent of China's labor force, creating more than half of China's economic output.

    Dragged down by global market turmoil, China's benchmark Shanghai Composite Index fell 6.12 points Friday to 2359.22 points, down 0.3 percent, the highest since April 2009, the lowest closing price. Foreign exchange market, the appreciation of the renminbi in China's central bank to guide the occasion, traders reckon the yuan against the dollar. This will enable Beijing to curb the exchange rate fluctuations against the dollar set change interval to be tested for a third day.

    China is tightening credit to curb inflation, inflation to some extent by the global financial crisis triggered by the massive investment in irritation. However, bank credit to the private sector limits the pressure caused, led to growing fears that the economy will slow sharply, but so far China's economic growth has been in the United States and Europe to ease the economic weakness of the negative impact on the global economy.

    Over the years, has a population of 1.9 million by the manufacturer of Wenzhou lighter gradually emerge, but it is now known for its high-end electronic products, from manufacturing to real estate development and many other areas of the city position is known. According to government estimates, 360,000 small and medium enterprises in Wenzhou city's total industrial output value of more than 90%, the first eight months of this year to create the output value of RMB 2,715 billion (42.4 billion U.S. dollars).

    But last year, as China began to curb bank lending, the financial problems of small manufacturers began to intensify. Private companies find it increasingly difficult to find financing. Relative to the private sector, China's large state-owned enterprises are usually easier to obtain loans from state-owned banks. According to local government data, the first seven months of this year, Wenzhou enterprises' losses amounted to 640 million yuan (about $ 100 million), more than 220 million yuan over the previous year.

    Wenzhou SME Development Association, the industry group's president Zhou German said, some banks in lending interest rates were prohibitively high. He said the closure of several companies in recent weeks is a member of this organization, but Zhou German declined to elaborate.

    Chinese officials have repeatedly said that small businesses will collapse, and proposed ways to help such enterprises. For example, in August, China's top economic planning agency National Development and Reform Commission has issued new regulations to encourage private sector investment, including new energy, biotechnology and advanced manufacturing equipment, including the "emerging strategic industries", the private sector to ensure that qualified will be allowed through the issuance of debt and equity financing.

    Wire and cable business owners Qiuguo Ning said he intends to expand its business manufacturing home appliances, home appliances business, higher profit margins, but that would require "tens of millions" of investment. He said it was difficult to obtain financing.

    Qiuguo Ning said he is considering his own name in real estate as collateral for loans. But he said the government's harsh suppression of the real estate I have to limit the ability of property as collateral for loans.

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