Wenzhou, the manufacturing center of China, faces shutdowns as private moneylenders demand loans be repaid before Chinese New Year. Simon Eckersley, founder and CEO of HAO Capital, a private equity firm with offices in Beijing and Hong Kong, says, however, it is wrong to see Wenzhou’s problems as being unique.
He cites the problems that Western SMEs currently have in getting loans from European and American banks still trying to restore their balance sheets in the aftermath of the economic crisis.
“I don’t think it is a reflection of a broader problem of the Chinese economy because you also have it in Japan and in the UK,” he says.
He says if businesses cannot demonstrate their competitiveness in any market at present, they are going to find it difficult to get money.
“This is the case in every country and every region. China’s growth is maintaining its momentum, and the credit crisis in one region cannot reflect the whole picture.”