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Subprime Crisis Sweep Wenzhou as Bankrupt Bosses Flee

09-29 15:30 Caijing

Up to 29 bankrupt bosses in Wenzhou have fled since April this year and another one committed suicide, reflecting rising money tensions in small Chinese companies.

Up to 29 bankrupt bosses in Wenzhou, a manufacturing center in south China’s Zhejiang Province, have fled since April this year and another one committed suicide, the 21st Economic Herald reported, reflecting rising money tensions in small Chinese companies.

Among the 29 bosses, 11 are leather shoe and leather products makers, five in electronic industry, four in iron and copper sector while two are operating restaurants, with assets value in each of these companies reaching 100 million yuan, the report said.

The bosses fled brought with no less than 2.9 billion yuan worth of assets, according to a preliminary estimate.

The situation is getting worse in September, with on a single day of September 25, nine bankrupt bosses fled in Wenzhou, the newspaper said, quoting a government source without giving the person’s name.

Authorities have realized the problem. Acting Governor of Zhejiang Province has called Saturday to expand financing channels for small companies.

The bankruptcy of companies in the city is due to a restless expansion and borrowing at a high rate from unofficial channels against a backdrop of unfavorable micro economic situation, said Chen Derong, the party chief in Wenzhou.

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