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Cash-trapped enterprises see dawn break amid strong gov't support


10:40, October 17, 2011

A few machines run relied on temporary generators in a powered-off workshop in Wenzhou, east China's Zhejiang Province, June 30, 2011. (Xinhua/Han Chuanhao)

BEIJING,Oct. 17 (Xinhuanet) – As China's central and local governments have taken multiple relief measurements to help private firms, more small- and medium-sized enterprises trapped in the liquidity crunch are now seeing dawn break.

Previous media reports stated that small- and medium-sized enterprises (SMEs), which contribute to 60 percent of China's industrial output and create 80 percent of the country's jobs, have faced an unprecedented crisis this year as they struggle to survive a fund shortage amid the country's tightened macroeconomic control policies.

At least 80 cash-strapped businesspeople in the city of Wenzhou, east China, have committed suicide or gone into hiding to invalidate more than 10 billion yuan in debt owed to individual creditors pooled from the private lending market.

News of the incidents has even made waves in the central government. During a visit to Wenzhou on Oct. 5, Premier Wen Jiabao urged financial support for debt-laden small businesses.

According to Xinhua, an official investigation has shown that the crisis has now largely been kept under control, while some of the runaway small-businessmen are returning in the last week.

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