Not a crisis but surely an alarm

Wenzhou's entrepreneurs are paying for their wrong decisions but government should help them defuse speculation bubble

Wenzhou has been in focus in the Chinese media after some entrepreneurs in the city committed suicide or shut down their factories and fled because they could not pay their debts.

Many of the factories in Wenzhou, Zhejiang province, have a profit margin of about 5 percent and, hence, cannot afford to pay 30 percent (or higher) interest rates on the money they have borrowed from loan sharks. More than 80 entrepreneurs have fled without paying billions of yuan in loan. The amount, however, is just a part of the informal debts in the city, which amounts to hundreds of billions of yuan.