China's Wenzhou unveils reform plans as bad loans climb
BEIJING (REUTERS) - China's entrepreneurial hub of Wenzhou has unveiled measures to turn grey-market lending into formal credit to support cash-starved small firms while reducing financial risks, state media reported on Saturday.
Under the plans announced by the municipal government, the wealthy coastal city of Wenzhou aims to channel private money into local businesses through formal institutions, mainly small credit firms, the official Securities Times said, citing officials.
These credit firms will be allowed to issue bonds via private placements, while qualified credit firms could be turned into rural banks, the newspaper quoted Mr Zhang Zhenyu, head of the municipal government's finance office, as saying.
Wenzhou, in eastern Zhejiang province, is known throughout China as a Mecca for private entrepreneurship and grey-market lending.