Zhejiang Enterprises Have No Choice But To Strive For Breakout

Cost rise, capital chain breakage, frequent closure

Facing the pressure of soaring raw material prices, RMB appreciation, labor costs and bank loans, there are many difficulties in the operation of the private enterprises in the mainland this year. A large number of enterprises have suffered losses. Some of them have broken the capital chain and are faced with the fate of bankruptcy.

However, private enterprises are actively pforming to meet challenges.

Zhejiang Province, an economically powerful province famous for its private economy, is facing enormous challenges.

Soaring prices of raw materials, appreciation of the renminbi, rapid increase in labor costs, difficulties in bank loans and soaring private lending rates are becoming the five major predicaments faced by millions of small and medium-sized enterprises in Zhejiang.

Bank lending rates rose sharply

"At present, the gap between SMEs is very serious, and the risk of capital chain breaking is increasing.

The Zhejiang Banking Regulatory Commission's research report shows that the "tight money" policy has reduced the overall credit supply capacity of the banking institutions within the jurisdiction.

At the same time, the increase of raw material prices, the sharp increase in labor costs and the appreciation of the renminbi have led to the expansion of the financing needs of small businesses and increased the contradiction between supply and demand of credit.

Due to the scarcity of credit resources, the interest rate of bank loans for SMEs in Zhejiang has been increasing. Many banks have generally risen to 30% to 40% or even 80% of their lending rates to SMEs.

Many small and medium-sized enterprises turn to private lending in order to find financing channels.

"The short-term interest rate of some enterprises in the short term" bridge loan "is as high as 4 to 6 points, Lu Shaoji, director of the financial statistics office of Zhejiang SME Bureau, told reporters that once the enterprises are unable to repay their debts, the capital chain will be broken.

20% SMEs in Wenzhou close down

Facing the severe situation, Zhejiang enterprises are facing difficulties.

A few days ago, Taizhou leap, Hangzhou Nan Wang Group and Jiaxing Xu Lai, one local leading enterprise successively pmitted the news of capital chain breaking.

This year, many industries in Zhejiang are losing money. Zhejiang textile, clothing, dyestuffs, silk and so on have lost the trend of the whole industry. According to the Zhejiang Silk Association statistics, in the first quarter of this year, 56 of the 107 silk enterprises were in deficit. There were 76 Reeling Enterprises in the same period last year, and only 56 this year.

In Wenzhou, enterprises that have closed down or are on the verge of closure have accounted for about 20% of SMEs in Wenzhou.

Zhou Dewen, President of Wenzhou SME Promotion Association, said that Wenzhou's small and medium-sized enterprises are not facing a difficult situation and can be expressed in the crisis of survival.