Thursday, August 21, 2008

Who is making the lighters when Wenzhou doesn't?

Wenzhou's Rui'an CityWenzhou
Wikipedia
China's media are increasingly reporting about the crisis among the SME's, signaling that the government is drafting serious solution: otherwise the heavily controlled media could not be reporting about those problems.
The Economic Observer reports on a specific plan of the provincial authorities in Zhejiang to face the crisis triggered off by the credit crunch of the central government. It gives a vivid description of the crisis:
Zhou Dahu, the director of Wenzhou's Tobacco Product Accessories Association, said there were over 3,000 lighter-producing businesses in Wenzhou at the peak in 1993, but that the number had decreased to 600 or 700 in recent years. Today there are no more than 100 still in operation, he added.
The provincial government is calling upon the central government, claiming that their problems cannot be solved on a local level only.
The central government is drafting a 300 billion RMB economic aid program, and obvious different government entities are rushing in to get a piece of the action. A few measures that have been taken:
Zhejiang authorities had implemented combinations of preferential tax policies, guaranteeing loans for firms, and helping them overcome fundraising hurdles.
On July 15, the Zhejiang commerce and banking officials published guidelines saying that limited liability companies and unlisted joint-stock companies with stockholders fewer than 200 could apply for loans backed by shares in their stock.
Commercial
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