Wenzhou Private Lending Triggering The Scene Of Corporate Debt Crisis

Why did a group of "leading soldiers" fall down in succession? -- Wenzhou private lending triggered the scene of the debt crisis.

When Wenzhou entrepreneurs jumped the building, fled, and business failures, these sensitive words frequently stimulated the eyeball. People found that Wenzhou, known as the "economic weathervane", was not only a small and medium sized enterprise with backward production capacity, but also a "pioneer" enterprise in the field of "private lending crisis".

What led to the collapse of these "star enterprises" and "advanced enterprises"? In the face of a doubt, where should Wenzhou's economy go?

"Yesterday, the production line was still turning, and it was empty."

Reporters in Wenzhou in September 29th, the headquarter of the headquarter, compared with

When he saw Yu Zhangsheng, the employee of the shoe company, he was busy making phone calls for himself.

"Yesterday, the production line was still turning, and in the twinkling of an eye, it was empty.

We wait until we get our wages tomorrow, and we need to find another way. "

He said.

Wenzhou Zheng Dali footwear industry has more than 10 years of history, including the four brands of Chudley, youth show, Princess Bai Zhi and mermaid. It has four factories, covering an area of tens of thousands of square meters, with about 950 workers. Its chairman, Shen Kuizheng, jumped home in September 27th and died.

"Our 4 brands are not only good brand effects, regular customers, regular production, and ample orders," said Sun Yuhua, executive deputy general manager of the marketing department of the footwear industry, but also our management and workers want to keep the company alive even after the death of the chairman.

It was not until yesterday that production continued, but the banks froze up the funds, and we could not pay the suppliers. Today the production is forced to stop.

Sun Yuhua's statement was obtained by other employees of the Zheng Dali shoe industry.

It is understood that up to now, at least more than 80 enterprises in Wenzhou have fled and businesses have gone bankrupt.

26 of them occurred in September.

Since September 22nd, after the 3 cause debt crisis in Wenzhou, the boss was forced to go to a blind alley to commit suicide, resulting in 2 deaths and 1 injuries.

Like Zheng Dali shoes, in the recent batch of Wenzhou enterprises run by the boss or fleeing from the building, some enterprises produced normal and orderly operation before their bosses went out of trouble, many of them were "pioneers" of the industry or even "star enterprises" of Wenzhou.

Zhejiang Xintai group is the key backbone enterprise and tax payer in Ouhai District of Wenzhou. The enterprise owns the only well-known trademark in China's domestic glasses industry. Last year, its output value reached 270 million yuan, which is the "leader of the leading industry in the Wenzhou glasses industry".

In September 22nd, Hu Fulin, the group's chairman, escaped.

In September 29th, reporters made a special trip to the Xintai group, which is located in the Central Avenue of Ouhai District, Wenzhou.

The factory, which covers 120 acres, has been empty for only a week.

Dozens of public security police and police officers kept the gate firmly and no foreign personnel were allowed to enter the factory area.

And on the first floor office hall of the Wenzhou variety shoe industry, which was forced to stop production because of the boss's escape, the reporter saw that the wall of the enterprise was full of "star enterprises", "key enterprises of China's shoes capital", "national quality trustworthy enterprises" and "advanced enterprises" and other Medal of honor.

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"Private lending is just crushing the last straw" of enterprises.

When he mentioned the death of his boss Shen Kuizheng, Sun Yuhua could not help crying. "If the boss is a good person, he will not go on this road if he is good or bad."

It is understood that since the beginning of this year, private lending in Wenzhou has been unprecedentedly active. In the first half of this year, 48 billion 550 million yuan of private lending has been accumulated. Private lending has become one of the main sources of financing for SMEs.

Local private lending comprehensive interest rates continued to rise, the monthly interest rate reached 3-5 points, some even 6 to 1 cents.

The frenzy of private lending is also evident from the more than 7000 dispute in the first half of this year.

Jin Heng Bo, the shoe supplier of the footwear industry and the owner of Jun yuan trading company, said: "now the usury is favorable, the annual interest rate is as high as 60%, but the profit is 3% to 5%. Let alone push the manufacturing industry to a blind alley, even the high profit real estate industry can not afford it."

Reporters in Wenzhou local well-known forum "703804" see, netizens so evaluate the current Wenzhou Economy: "usury poison under the Wenzhou economy is like a patient who drinks their own blood to quench their thirst."

But why do so many enterprises still choose to "drink poison to quench thirst"? Zhou Dewen, President of Wenzhou SME Promotion Association, said: "private lending has an objective environment for survival. More than half of the small and medium-sized enterprises can not get enough support from financial institutions. They can only be forced to borrow money from the private sector, stimulating the development of private lending and making it the last straw to crush enterprises."

Some Wenzhou SME owners told reporters at the macro level

"The bank would rather lend the money to the central enterprises that have been losing money, and not lend them to us. The boss of the enterprise is not a fool. If the bank can borrow money, who will go to the usury?" said a leather factory owner who did not want to be named.

Zhou Dewen said that some small and medium-sized enterprises' capital chain rupture is the last year's hollowing out of the industry to the current concentration explosion, and the Industrial Hollowing is manifested as a large number of capital escaping from industry and a large number of enterprises moving out.

At the same time, it is closely related to the "old mode" of Wenzhou enterprises.

A large number of enterprises in Wenzhou are labor-intensive industries, and the backward economic growth mode has been the continuation of the traditional concept of small profits but quick turnover.

Wenzhou is only an important manufacturing base. It is at the lowest end of the industrial chain and lacks growth potential.

In addition, the reporter realized that the demise of some "vanguard" enterprises is also related to the long line of production decisions taken by enterprise decision-makers.

In 2010, the investigation of 324 enterprises by Wenzhou finance office showed that in 2008, the enterprises surveyed had 119 investments outside main business, increased to 138 in 2009, and reached 163 in the first quarter of 2010.

Since 2008, Xintai group has "pformed and upgraded" and invested a lot of liquidity in the PV industry; and the group has also invested large amounts of liquidity in land and property purchases.

"We need to believe that Wenzhou has the strength to resist this risk".

The breakup of some enterprises' capital chain has also troubled their upstream and downstream businesses.

What should we do when the shoe factory owner runs? We also need to pay wages and get goods from our raw material suppliers. Now the reputation of Wenzhou enterprises has been hit hard, and cash can only be used for cash, not only can money be taken away, but business is becoming more and more difficult.

Zhang Changkang, deputy general manager of Wenzhou Xin Ying shoes material Co., Ltd.

Zhou Dewen said that this is not only a problem of some enterprises in Wenzhou, but if it is not stopped, it will become increasingly intense and spread rapidly.

"The government and banks must rescue themselves at this critical juncture, and enterprises should also have confidence because the fundamentals of Wenzhou enterprises are still good, and most enterprises are still operating normally.

We all need to believe that Wenzhou has the strength to resist this risk. "

Xie Rongfang, executive chairman of Wenzhou shoe leather industry association, said that in response to the crisis, bank support is the first requirement: first, to lower interest rates, and the two is not to pump money.

He stressed that banks need to change their ideas and save enterprises, which is also a way to save banks themselves.

"Only consider the interest rate increase a bit, then even the capital is gone, bad debts are not higher?" {page_break}

Zhou Dewen suggested that private lending has the necessity of objective existence, and has also played a positive role. Private lending can only be dredging rather than plugging.

"If we kill a private loan, we will accelerate the remaining small and medium-sized businesses.

Reporters learned that, in the face of the current severe financial situation, the Wenzhou municipal Party committee and the municipal government set up a comprehensive coordination mechanism and special working group to deploy intensified measures and take measures simultaneously.

We should make full use of administrative, financial, legal and other means to rapidly carry out risk investigation activities, introduce policies and measures, increase financial support, help enterprises, judicial mediation, early warning of risks, and the disposal of bankrupt enterprises, and resolutely crack down on illegal acts such as evil forces and malicious wages. At the same time, we should intensify propaganda and guidance, strengthen credit building, safeguard social fairness and justice, and ensure social harmony and stability.