Chinese firms tightening belts

The worsening US credit crisis that is threatening to grow into a global recession is reportedly forcing many CEOs of Chinese enterprises, for years geared toward an export boom, to sharpen their plans for cutting production and corporate spending to prepare for leaner times.

Without a large enough domestic market to cushion the projected fall in exports, many Chinese enterprises are said to be facing a problem of excess capacity, built largely on easy and cheap credit in the past several years.

The problem is particularly prominent in the steel and heavy industry sectors, the main engines of export growth, economists and industry analysts have said.