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China’s Credit-Crunched SMEs / 面临信贷紧缩问题的中国中小型企业

China’s Credit-Crunched SMEs

Author: Philip Bernasek
2012-10-29
These surely are rough times for China’s countless small and medium-sized enterprises (SMEs). These firms, which account for 65% of China’s economy, are facing unprecedented challenges as the effects of the global economic downturn, rising domestic labor costs, and limited access to credit are threatening their profitability and survival.
Since the beginning of the global financial crisis, Chinese firms have been slammed by declining export orders. SMEs operating in export-dependent areas of the country, most prominently Guangdong, have been particularly hit hard. According to a report from late last year, average production capacity of all firms operating in the Pearl River Delta had dropped to around 70%. Those firms most heavily affected were primarily small-sized enterprises; only one-third of small firms in the Delta were operating at above 90% capacity, and a fifth of small firms were operating at below 50% capacity.
Furthermore, rising labor costs have exacerbated the plight of Guangdong’s SMEs. As wages continue to rise across China, migrant workers from the county’s interior are becoming increasingly willing to work closer to home and forgo their relatively high wages in coastal China. After this year’s Chinese New Year had passed, many workers chose not to return to their coastal factory jobs. As Lin Wei, the General Manager of Guangdong’s Big Tree Toy Company, quipped, “Only 30 percent of the workers have returned. We will have to cancel some big overseas orders if not enough workers return soon.” As a result of this growing labor outflow from the east, factory owners in Guangdong and other coastal provinces are hoping to retain their employees are finding that they need to pay increasingly higher wages if they are to remain at full production capacity. (That is, of course, assuming that the factory managers are able to receive enough export orders.)
But the most pressing issue facing China’s SMEs today is the extreme difficulty of acquiring capital. China’s large state-owned banks, which issue the vast majority of loans to the country’s businesses and individuals, are often reluctant to lend to SMEs. Instead, the state-owned banks are more willing to lend to firms with significant hard assets and assured government backing, namely China’s State-Owned-Enterprises (SOEs). The banks see SMEs as risky investments lacking the necessary collateral to protect against default, which is accurate when compared to government-backed SOEs. What results is a Chinese financial system where SOEs have very little trouble securing capital, while private SMEs are left thirsting for funds. In fact, while SMEs generate 65% of China’s GDP and provide 80% of its jobs, they only receive approximately one-fifth of the nation’s bank loans. This acute lack of access to loans, which SMEs badly need to invest in new capital and weather the financial crisis, has already forced countless firms to suspend production or shut down.
Various levels of Chinese government have acknowledged this problem and began taking measures to address it earlier this year. The State Council in February announced a US$4.2 billion plan to assist struggling SMEs across the country. Provincial governments have also begun to step in. In Guangdong, authorities announced a US$39.6 million initiative that will provide SMEs with tax breaks and better access to credit. Under the plan, those firms that plan to invest in new capital will receive greater tax breaks. In addition, the Guangdong government will make it easier for SMEs to become listed on the stock market, opening up a new source of capitalization. However, while these initiatives are certainly a step in the right direction in that they ease the financial hardship of SMEs and give firms better access to capital, the long-term effectiveness of these measures is still undetermined.
The government has continued to implement measures aimed at easing the plight of SMEs in recent months. In May, The Bank of China lowered the reserve ratio by 0.5 percentage points, meaning that banks will have more funds available to loan out to struggling firms. This cut was the third time that the BOC had lowered the reserve ratio in the past six months, following cuts in November 2011 and February 2012. However, banks’ added available funding has done little to ease the credit crunch facing SMEs; according to the Wall Street Journal, a recent flash survey of local enterprises found that although the ratio cuts has boosted liquidity in banks, they have not immediately improved SMEs’ access to credit as the loan application process is long and drawn out.
However, there do exist some alternatives for SMEs from borrowing directly from state-owned banks. A loan from a credit guarantee company (信用担保公司) is one option. Credit guarantee companies act like an insurance company for borrowers—that is, the credit guarantee company charges the borrower (an SME) a fee to serve as a guarantor of its loan. In the case that the firm defaults on its loan, the credit guarantee company is responsible for paying the loan back to the bank. Because the credit guarantee companies are generally well capitalized already, banks are more willing to lend to SMEs when they go this route to secure a loan. While credit guarantee companies add unneeded expenses to SMEs looking to acquire capital, they nonetheless provide better access to much needed loans.
But perhaps the most promising opportunity for SMEs to escape their credit crunch can be found in the city of Wenzhou in Zhejiang province. Authorities have recently announced that SMEs can be established in the city with zero registered capital. While Chinese law dictates that 20% of all firms’ initial registered capital must come from the firm’s shareholders, shareholders of SMEs in Wenzhou have up to 3 months to contribute 20% of this initial registered capital. In addition, SMEs in the city will be allowed to borrow using equity as collateral. Firms will also be able to borrow from banks, qualified underwriters and small-loan firms. These small-loan firms will serve as a welcome alternative to state owned banks, as they are more likely to take risks on lending to SMEs than their state-owned counterparts.
Many have called the reforms in Wenzhou the “Wenzhou Experiment” of banking reform. If successful, these reforms may spread to other places in China. In sign that bodes well for China’s capital-starved SMEs, Premier Wen Jiabao was quoted earlier this year saying that the time has come for China to “break the monopoly” that the largest banks have over the Chinese financial industry. We will have to wait and see if the next generation of leadership promotes Wenzhou-like financial reform to the entire country and provides more long-term solutions to the credit crunch facing SMEs.
Writer:Philip Bernasek, Hopkins Nanjing Center Certificate 2011-2012

面临信贷紧缩问题的中国中小型企业

作者:Philip Bernasek
2012-10-29
现在对中国无数中小企业来说是最为艰难的时期, 中小型企业占中国经济的65%,由于全球经济下滑,国内不断上涨的劳动力成本,使得这些企业难以获得信贷,盈利受到严重影响,从而面临着前所未有的挑战。
全球金融危机以来,中国企业出口订单急剧下降。在以出口经济为主导的地区的中小企业受到沉重打击,广东尤为显著。根据去年年底的一份报告, 珠江三角洲所有公司平均生产量已下降到70%左右。其中影响最严重的主要是中小型企业; 在三角洲地区只有三分之一的小公司保持90%以上产能,而有五分之一的小公司只有50%以下的能力。
此外,劳动力成本上涨也是加剧广东中小企业困境的一个重要原因。随着中国各地工资的不断上涨,人们越来越愿意选择去离家更近的地方工作而放弃在中国的沿海相对工资较高的地区工作。在今年的春季之后,许多工人没有选择回到他们的沿海工厂去工作。正如广东大树玩具公司的总经理林魏说,“目前只有30%的工人回来工作,如果没有足够的工人很快回来工作,我们将不得不取消一些大额海外订单。”因此广东省以及其他沿海省份的想要留住员工的企业主发现,如果要保证较高的劳动生产率需要支付更高的薪水。(当然,这是在假设企业能够获得足够的出口订单的前提下)
但是今天中国中小企业面临的最紧迫的问题是很难获得资本。,往往不愿贷款给中小企业。大型国有银行将绝大多数的贷款给中国的国有企业。为了防止违约,银行认为贷款给那些缺乏必要抵押品的中小企业是一种风险投资。其结果是国有企业很容易获得资金,而私营中小企业却是举步维艰。事实上,尽管中小企业创造了中国65%的GDP,提供80%的工作岗位,但是他们只获得了大约五分之一的国家银行贷款。这使得中小企业无法正常获得资本进行投资,金融危机爆发后,很多中小企业停产或倒闭。
中国政府的各级有关部门已经意识到这个问题,并开始采取措施来解决。国务院在今年2月宣布启动一项42亿美元的救助计划来帮助全国中小企业。省级政府已经开始介入,广东省宣布启动一项3960万美元救助计划,为中小企业提供税收减免并且放宽信贷条件。根据该计划,中小企业若投资新的项目将获得更大的税收减免。此外,广东省政府为便于中小企业在股票市场上市,开放的资本化来源。然而,尽管这些措施可以缓解中小企业的经济困难,并让这些企业更好地获取资本,但是长期效果是不确定的。
最近几个月,中国政府继续采取措施,旨在缓解中小企业的困境。5月份,中国人民银行的准备金率降低了0.5,这意味着银行将有更多的资金可以贷款给中小企业。这次降息是央行在过去的六个月中,即2011年11月和2012年2月后,第三次下调。然而,银行增加的可动用的资金对缓解中小企业的信贷紧缩收效甚微。《华尔街日报》称,最近的一个对地方企业的调查发现,尽管降低利率增加了银行的贷款,但是他们没有立即改善中小企业获得信贷的状况,因为贷款申请过程漫长。
然而, 中小企业从国有银行直接贷款还是存在一些替代品,信贷担保公司是一种选择。信贷担保公司相当于借款人的保险公司,也就是说,信贷担保公司会收取借款人(中小企业)一定的费用作为贷款的保证金。如果公司拖欠贷款,信贷担保公司负责向银行支付贷款。因为信贷担保公司一般都资本丰厚,银行更愿意贷款给中小企业,当他们使用这种方式来贷款。虽然信贷担保公司会给中小企业增加不必要开支,但是他们提供服务使中小企业更好的获得所需的贷款。
但也许中小企业摆脱信贷紧缩最好的机会是在温州。有关当局最近宣布,中小企业可以在温州零资本注册。尽管中国法律规定,公司的初始注册资本必须有20%来自该公司的股东,但是温州中小企业的股东在3个月内缴纳20%的初始注册资本。此外,温州还允许中小企业利用净资产作为抵押品。企业还可以从银行,合格的承销商和小型贷款公司取得贷款。这些小型贷款公司将作为一个替代国有银行的好的选择。但是相对于国有银行,他们给中小企业贷款要承受更大的风险。
许多人称这种改革是“温州实验”的银行改革。如果成功,这些改革将会蔓延到中国的其他地方。有迹象表明,这对渴求资金的中小型企业来说是有利的,温家宝总理今年早些时候表示,对中国来说,现在正是打破大型银行控制中国金融行业的垄断地位的时候。我们将期待下一代中国领导人向全国推动温州式的金融改革,提供更多的长期解决中小企业信贷紧缩难题的方案。
作者:Philip Bernasek,中美中心证书项目2011-2012
译者:戴蕾宸,中美中心国际关系硕士2013年

China’s Credit-Crunched SMEs

Author: Philip Bernasek
2012-10-29

These surely are rough times for China’s countless small and medium-sized enterprises (SMEs). These firms, which account for 65% of China’s economy, are facing unprecedented challenges as the effects of the global economic downturn, rising domestic labor costs, and limited access to credit are threatening their profitability and survival.

Since the beginning of the global financial crisis, Chinese firms have been slammed by declining export orders. SMEs operating in export-dependent areas of the country, most prominently Guangdong, have been particularly hit hard. According to a report from late last year, average production capacity of all firms operating in the Pearl River Delta had dropped to around 70%. Those firms most heavily affected were primarily small-sized enterprises; only one-third of small firms in the Delta were operating at above 90% capacity, and a fifth of small firms were operating at below 50% capacity.

Furthermore, rising labor costs have exacerbated the plight of Guangdong’s SMEs. As wages continue to rise across China, migrant workers from the county’s interior are becoming increasingly willing to work closer to home and forgo their relatively high wages in coastal China. After this year’s Chinese New Year had passed, many workers chose not to return to their coastal factory jobs. As Lin Wei, the General Manager of Guangdong’s Big Tree Toy Company, quipped, “Only 30 percent of the workers have returned. We will have to cancel some big overseas orders if not enough workers return soon.” As a result of this growing labor outflow from the east, factory owners in Guangdong and other coastal provinces are hoping to retain their employees are finding that they need to pay increasingly higher wages if they are to remain at full production capacity. (That is, of course, assuming that the factory managers are able to receive enough export orders.)

But the most pressing issue facing China’s SMEs today is the extreme difficulty of acquiring capital. China’s large state-owned banks, which issue the vast majority of loans to the country’s businesses and individuals, are often reluctant to lend to SMEs. Instead, the state-owned banks are more willing to lend to firms with significant hard assets and assured government backing, namely China’s State-Owned-Enterprises (SOEs). The banks see SMEs as risky investments lacking the necessary collateral to protect against default, which is accurate when compared to government-backed SOEs. What results is a Chinese financial system where SOEs have very little trouble securing capital, while private SMEs are left thirsting for funds. In fact, while SMEs generate 65% of China’s GDP and provide 80% of its jobs, they only receive approximately one-fifth of the nation’s bank loans. This acute lack of access to loans, which SMEs badly need to invest in new capital and weather the financial crisis, has already forced countless firms to suspend production or shut down.

Various levels of Chinese government have acknowledged this problem and began taking measures to address it earlier this year. The State Council in February announced a US$4.2 billion plan to assist struggling SMEs across the country. Provincial governments have also begun to step in. In Guangdong, authorities announced a US$39.6 million initiative that will provide SMEs with tax breaks and better access to credit. Under the plan, those firms that plan to invest in new capital will receive greater tax breaks. In addition, the Guangdong government will make it easier for SMEs to become listed on the stock market, opening up a new source of capitalization. However, while these initiatives are certainly a step in the right direction in that they ease the financial hardship of SMEs and give firms better access to capital, the long-term effectiveness of these measures is still undetermined.
The government has continued to implement measures aimed at easing the plight of SMEs in recent months. In May, The Bank of China lowered the reserve ratio by 0.5 percentage points, meaning that banks will have more funds available to loan out to struggling firms. This cut was the third time that the BOC had lowered the reserve ratio in the past six months, following cuts in November 2011 and February 2012. However, banks’ added available funding has done little to ease the credit crunch facing SMEs; according to the Wall Street Journal, a recent flash survey of local enterprises found that although the ratio cuts has boosted liquidity in banks, they have not immediately improved SMEs’ access to credit as the loan application process is long and drawn out.

However, there do exist some alternatives for SMEs from borrowing directly from state-owned banks. A loan from a credit guarantee company (信用担保公司) is one option. Credit guarantee companies act like an insurance company for borrowers—that is, the credit guarantee company charges the borrower (an SME) a fee to serve as a guarantor of its loan. In the case that the firm defaults on its loan, the credit guarantee company is responsible for paying the loan back to the bank. Because the credit guarantee companies are generally well capitalized already, banks are more willing to lend to SMEs when they go this route to secure a loan. While credit guarantee companies add unneeded expenses to SMEs looking to acquire capital, they nonetheless provide better access to much needed loans.

But perhaps the most promising opportunity for SMEs to escape their credit crunch can be found in the city of Wenzhou in Zhejiang province. Authorities have recently announced that SMEs can be established in the city with zero registered capital. While Chinese law dictates that 20% of all firms’ initial registered capital must come from the firm’s shareholders, shareholders of SMEs in Wenzhou have up to 3 months to contribute 20% of this initial registered capital. In addition, SMEs in the city will be allowed to borrow using equity as collateral. Firms will also be able to borrow from banks, qualified underwriters and small-loan firms. These small-loan firms will serve as a welcome alternative to state owned banks, as they are more likely to take risks on lending to SMEs than their state-owned counterparts.

Many have called the reforms in Wenzhou the “Wenzhou Experiment” of banking reform. If successful, these reforms may spread to other places in China. In sign that bodes well for China’s capital-starved SMEs, Premier Wen Jiabao was quoted earlier this year saying that the time has come for China to “break the monopoly” that the largest banks have over the Chinese financial industry. We will have to wait and see if the next generation of leadership promotes Wenzhou-like financial reform to the entire country and provides more long-term solutions to the credit crunch facing SMEs.

Writer:Philip Bernasek, Hopkins Nanjing Center Certificate 2011-2012

面临信贷紧缩问题的中国中小型企业

作者:Philip Bernasek
2012-10-29

现在对中国无数中小企业来说是最为艰难的时期, 中小型企业占中国经济的65%,由于全球经济下滑,国内不断上涨的劳动力成本,使得这些企业难以获得信贷,盈利受到严重影响,从而面临着前所未有的挑战。
全球金融危机以来,中国企业出口订单急剧下降。在以出口经济为主导的地区的中小企业受到沉重打击,广东尤为显著。根据去年年底的一份报告, 珠江三角洲所有公司平均生产量已下降到70%左右。其中影响最严重的主要是中小型企业; 在三角洲地区只有三分之一的小公司保持90%以上产能,而有五分之一的小公司只有50%以下的能力。
此外,劳动力成本上涨也是加剧广东中小企业困境的一个重要原因。随着中国各地工资的不断上涨,人们越来越愿意选择去离家更近的地方工作而放弃在中国的沿海相对工资较高的地区工作。在今年的春季之后,许多工人没有选择回到他们的沿海工厂去工作。正如广东大树玩具公司的总经理林魏说,“目前只有30%的工人回来工作,如果没有足够的工人很快回来工作,我们将不得不取消一些大额海外订单。”因此广东省以及其他沿海省份的想要留住员工的企业主发现,如果要保证较高的劳动生产率需要支付更高的薪水。(当然,这是在假设企业能够获得足够的出口订单的前提下)
但是今天中国中小企业面临的最紧迫的问题是很难获得资本。,往往不愿贷款给中小企业。大型国有银行将绝大多数的贷款给中国的国有企业。为了防止违约,银行认为贷款给那些缺乏必要抵押品的中小企业是一种风险投资。其结果是国有企业很容易获得资金,而私营中小企业却是举步维艰。事实上,尽管中小企业创造了中国65%的GDP,提供80%的工作岗位,但是他们只获得了大约五分之一的国家银行贷款。这使得中小企业无法正常获得资本进行投资,金融危机爆发后,很多中小企业停产或倒闭。
中国政府的各级有关部门已经意识到这个问题,并开始采取措施来解决。国务院在今年2月宣布启动一项42亿美元的救助计划来帮助全国中小企业。省级政府已经开始介入,广东省宣布启动一项3960万美元救助计划,为中小企业提供税收减免并且放宽信贷条件。根据该计划,中小企业若投资新的项目将获得更大的税收减免。此外,广东省政府为便于中小企业在股票市场上市,开放的资本化来源。然而,尽管这些措施可以缓解中小企业的经济困难,并让这些企业更好地获取资本,但是长期效果是不确定的。
最近几个月,中国政府继续采取措施,旨在缓解中小企业的困境。5月份,中国人民银行的准备金率降低了0.5,这意味着银行将有更多的资金可以贷款给中小企业。这次降息是央行在过去的六个月中,即2011年11月和2012年2月后,第三次下调。然而,银行增加的可动用的资金对缓解中小企业的信贷紧缩收效甚微。《华尔街日报》称,最近的一个对地方企业的调查发现,尽管降低利率增加了银行的贷款,但是他们没有立即改善中小企业获得信贷的状况,因为贷款申请过程漫长。
然而, 中小企业从国有银行直接贷款还是存在一些替代品,信贷担保公司是一种选择。信贷担保公司相当于借款人的保险公司,也就是说,信贷担保公司会收取借款人(中小企业)一定的费用作为贷款的保证金。如果公司拖欠贷款,信贷担保公司负责向银行支付贷款。因为信贷担保公司一般都资本丰厚,银行更愿意贷款给中小企业,当他们使用这种方式来贷款。虽然信贷担保公司会给中小企业增加不必要开支,但是他们提供服务使中小企业更好的获得所需的贷款。
但也许中小企业摆脱信贷紧缩最好的机会是在温州。有关当局最近宣布,中小企业可以在温州零资本注册。尽管中国法律规定,公司的初始注册资本必须有20%来自该公司的股东,但是温州中小企业的股东在3个月内缴纳20%的初始注册资本。此外,温州还允许中小企业利用净资产作为抵押品。企业还可以从银行,合格的承销商和小型贷款公司取得贷款。这些小型贷款公司将作为一个替代国有银行的好的选择。但是相对于国有银行,他们给中小企业贷款要承受更大的风险。
许多人称这种改革是“温州实验”的银行改革。如果成功,这些改革将会蔓延到中国的其他地方。有迹象表明,这对渴求资金的中小型企业来说是有利的,温家宝总理今年早些时候表示,对中国来说,现在正是打破大型银行控制中国金融行业的垄断地位的时候。我们将期待下一代中国领导人向全国推动温州式的金融改革,提供更多的长期解决中小企业信贷紧缩难题的方案。
作者:Philip Bernasek ,中美中心证书项目2011-2012
译者:戴蕾宸,中美中心国际关系硕士2013年

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