China Helps Private Firms to Stay out of Debt Problems

A prominent Chinese entrepreneur who fled the country due to a debt crisis has returned home. The Chinese government has promised to help private firms to facilitate raising capital and allow these firms to borrow more money from banks during the current liquidity¹ crunch².

Wei Tong has more.

 
Hu Fulin, president of China's largest eyeglass manufacturer in Wenzhou, fled to the United States in late September, leaving 236 million US dollars in debt owed to both Chinese banks and individual creditors³.

Wenzhou is a coastal⁴ city in east China's Zhejiang province where private business is flourishing. It boasts a large-scale credit and debt market, amounting nearly 20 billion US dollars. Over 60 percent of private companies run businesses through loans. The loans will help the firms to raise capital but the high interest rate has made some debt-laden companies difficult to repay the debts. Hu Fulin's eyeglass company is one of them.

"The money that I am borrowing from other banks to pay off the debt is very hard to be approved. So I have to wait, but the previous loans were due already, which marks a broken capital link. I have no other choice but to leave the country."

Hu Fulin said upon arriving in Wenzhou, he hopes his company can overcome the current difficulties with more favorable government policies for private firms.

The Wenzhou Small and Medium-sized Enterprises Development Association says that more than 90 private entrepreneurs have gone into hiding in recent weeks to avoid repaying high-interest informal loans.

Zhou Qingming is deputy director of Wenzhou Branch of China's Banking⁵ Regulatory Commission.

"We urge banks in Wenzhou not to cut loans for the small and medium-sized enterprises, especially those that are running well but facing capital shortages."

Meanwhile, the local authorities have promised to crack down on demanding repayment⁶ of debt by force. And illegitimate underground lending institutions will be banned.

With the on-going debt crisis, small and medium-sized enterprises in Wenzhou have agreed to unite to stay out of the debt problems. Huang Congdi, from Wenzhou Service Center for Private Capital & Investment, explains.

"If the companies are united, they will be more powerful in tackling the difficulties. We have offered 190 million yuan, or around 30 million US dollars for 14 enterprises, some of which are on the brink⁷ of bankruptcy⁸ to pay off the debts."

Analysts⁹ say the Wenzhou debt crisis is an extreme case of private firms struggling to survive the liquidity crunch resulting from the country's current macroeconomic control policies, which have been designed to cool inflation and rein¹⁰ in the runaway¹¹ property market.

For CRI, this is Wei Tong.

1 liquidity   

n.流动性，偿债能力，流动资产

参考例句：

• The bank has progressively increased its liquidity.银行逐渐地增加其流动资产。
• The demand for and the supply of credit is closely linked to changes in liquidity.信用的供求和流动资金的变化有密切关系。

2 crunch   

n.关键时刻；艰难局面；v.发出碎裂声

参考例句：

• If it comes to the crunch they'll support us.关键时刻他们是会支持我们的。
• People who crunch nuts at the movies can be very annoying.看电影时嘎吱作声地嚼干果的人会使人十分讨厌。

3 creditors   

n.债权人，债主( creditor的名词复数 )

参考例句：

• They agreed to repay their creditors over a period of three years. 他们同意3年内向债主还清欠款。 来自《简明英汉词典》
• Creditors could obtain a writ for the arrest of their debtors. 债权人可以获得逮捕债务人的令状。 来自《简明英汉词典》

4 coastal   

adj.海岸的，沿海的，沿岸的

参考例句：

• The ocean waves are slowly eating away the coastal rocks.大海的波浪慢慢地侵蚀着岸边的岩石。
• This country will fortify the coastal areas.该国将加强沿海地区的防御。

5 banking   

n.银行业，银行学，金融业

参考例句：

• John is launching his son on a career in banking.约翰打算让儿子在银行界谋一个新职位。
• He possesses an extensive knowledge of banking.他具有广博的银行业务知识。

6 repayment   

n.偿还，偿还款；报酬

参考例句：

• I am entitled to a repayment for the damaged goods.我有权利索取货物损坏赔偿金。
• The tax authorities have been harrying her for repayment.税务局一直在催她补交税款。

7 brink   

n.(悬崖、河流等的)边缘，边沿

参考例句：

• The tree grew on the brink of the cliff.那棵树生长在峭壁的边缘。
• The two countries were poised on the brink of war.这两个国家处于交战的边缘。

8 bankruptcy   

n.破产；无偿付能力

参考例句：

• You will have to pull in if you want to escape bankruptcy.如果你想避免破产，就必须节省开支。
• His firm is just on thin ice of bankruptcy.他的商号正面临破产的危险。

9 analysts   

分析家，化验员( analyst的名词复数 )

参考例句：

• City analysts forecast huge profits this year. 伦敦金融分析家预测今年的利润非常丰厚。
• I was impressed by the high calibre of the researchers and analysts. 研究人员和分析人员的高素质给我留下了深刻印象。

10 rein   

n.疆绳，统治，支配；vt.以僵绳控制，统治

参考例句：

• The horse answered to the slightest pull on the rein.只要缰绳轻轻一拉,马就作出反应。
• He never drew rein for a moment till he reached the river.他一刻不停地一直跑到河边。

11 runaway   

n.逃走的人，逃亡，亡命者；adj.逃亡的，逃走的

参考例句：

• The police have not found the runaway to date.警察迄今没抓到逃犯。
• He was praised for bringing up the runaway horse.他勒住了脱缰之马受到了表扬。