Chinese Small-Business Lending Getting Smaller

November 5, 2009 at 8:00 am

In a little-noticed statement last week, China’s central bank and banking regulator gave an update on how well the country’s small businesses are doing at getting loans from banks (original in English here). That’s become a crucial issue this year, with growing concerns among officials and scholars that China’s extraordinary credit boom is bypassing the very firms that account for most new job creation. Yet the latest numbers — like many Chinese statistics – confuse as much as they enlighten.

The regulators said small- and medium-sized enterprises, SMEs for short, accounted for 14.1 trillion yuan of outstanding bank loans at the end of September, up 28% from a year earlier. Overall bank lending, by contrast, was up 34.2% in September. According to our calculations, the figures would mean small-business loans account for 36% of China’s total lending and 45% of lending to corporations. (The 3.08 trillion yuan in new loans to SMEs is also 45% of this year’s new lending to corporations.) (By Andrew Baston, The Wall Street Journal, October 27, 2009)

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Entry filed under: Asia, Business Development, Business Environment, China, entrepreneurship, Global Business, NKITA, small business.

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