Wenzhou now a bad example

Nine company bosses in Wenzhou, Zhejiang province, ran away on Sept 22 without repaying the money they had borrowed. Such incidents are becoming more frequent of late. This is not only a warning against private borrowing and lending of money, but also raises a question on the Wenzhou development "model" , says an article in Guangzhou Daily. Excerpts:

Wenzhou was once regarded as a model city for private business in China. But things have changed today. That's why the recent incidents in Wenzhou should serve as a warning to small and medium-sized enterprises (SMEs) to pay greater attention to the basics instead of "speculating" in real estate, coal mines and financial derivatives to make a quick buck.

Speculation may produce some gains in the short term, but in the long run it can sink an enterprise, and thus harm overall economic development. That is exactly what seems to be happening in Wenzhou.

All profitable ventures entail some responsibilities which company officials, especially bosses, are obliged to fulfill. Some businesspeople in Wenzhou have not done so and thus harmed overall economic development, although the local supervision department considers them "individual cases" of failure.

The over-optimistic attitude of the supervision department has prevented it from seeing the real picture and providing timely support and guidance to SMEs in difficulty.

But other companies in Wenzhou, rather across the country, should learn a lesson from the Wenzhou example. Though companies in Wenzhou succeeded in investing overseas, they did not make efforts to develop the real economy.

Such practices have to be stopped for the healthy development of business.

(China Daily 09/29/2011 page9)