Alarm over China's SMEs

IN STRAK COMTRAST TO THE ROSY OUTLOOK for the Chinese economy, reports about the sudden disappearance of some business owners in Wenzhou has revealed a surprisingly gloomy picture for small and medium-sized enterprises (SMEs).

Without clear evidence of widespread closures among small businesses, Chinese policymakers certainly do not need to rush to put the brakes on the tightening measures they have adopted this year to fight rising inflation.

But that does not mean they can afford to continue ignoring the lack of bank loans for SMEs, which apparently have been hit particularly hard by measures to tighten borrowing.