Small firms' credit crisis under control
Updated: 2011-10-13 09:49
Despite the debt problems facing many of Wenzhou's SMEs, it seems that some of the city's runaway bosses are returning.
Hu Fulin, president of the Xintai Group, China's largest eyeglasses manufacturer, fled to the United States from Wenzhou on Sept. 21 to escape a 1.5-billion-yuan debt. He returned to China on Monday.
"I hope my company can overcome the current difficulties with the government's support," Hu said upon arriving in Wenzhou.
Sun Fucai, board chairman of the Aomi Fluid Equipment Co Ltd, also returned to Wenzhou on Monday.
"I believe my company will get back on track, as the government has pledged strong support in helping me get bank loans," Sun said.
The MIIT is set to unveil a new policy to help small businesses to get through financial difficulties. However, the cash shortages are a chronic problem that cannot be solved all at once, Xie Sanming, an official from the MITT, was quoted as saying by the 21st Century Business Herald.
The average net profit margin of China's SMEs was less than 3 percent from January to July, much lower than the international average of 6 percent, according to a report released by the MIIT.
The report also said that 12.7 percent of small businesses have posted losses, with the size of the losses rising from 22.2 percent in the first two months of this year to 46.9 percent in the first seven months.
"We hope the government's relief measures can not only pull SMEs through financial difficulties but also boost their industrial transformation," said Yang Xiaoping, chairman of the Zhejiang branch of the China Banking Regulatory Commission.