Wenzhou economy 'still healthy' despite recent debt problem

Measures taken to ensure private firms can obtain vital funding

WENZHOU / HANGZHOU - Debt-laden entrepreneurs who fled from Wenzhou, Zhejiang province, have only had a "limited impact" on the local banking system and the overall economic situation in the region remains healthy, banking executives and analysts said.

Most of the small companies in Wenzhou, a vibrant private-sector hub, rely on underground banking networks to raise cash amid credit tightening by banks. These networks charge interest rates as high as 90 percent.