Credit squeeze drives change at China’s SMEs – FT中文网

Rather than facing a widespread credit squeeze, the SME sector is undergoing a painful process of restructuring. Capital is being funnelled towards high-tech and green energy-related companies at the expense of traditional low-end manufacturers.

Wenzhou is hardly about to run out of cash. This is a wealthy city, with the fourth highest per capita income in China. Far from money being too tight, the opposite is true in many parts of the local economy.

Instead, interviews with local factory managers, investors and bankers reveal a city in the midst of fundamental change in what it produces, with the government prodding companies to make more sophisticated products as rising wages undermine the low-cost model of manufacturing. A lack of financing, they say, is a symptom and not a cause of the troubles facing traditional industries.

Good news showing resilience of SME in China, transition to move up value chain

via Credit squeeze drives change at China’s SMEs – FT中文网.

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