Fujian province's Xiamen is giving weight to the argument that the private loan crisis that recently hit Wenzhou could spread to other parts of China. (File Photo/CFP)
After Chinese Premier Wen Jiabao recently visited Wenzhou in Zhejiang province to handle the aftermath of the collapse of small and medium firms in the city due to the government's tight credit policy, with many local bosses going to ground, it was reported that several business executives in Xiamen in neighboring Fujian province have also gone on the run because they could not pay back money borrowed from loan sharks.
Local police reported that about 12 billion yuan (US$1.88 billion) is involved in cases of fugitive bosses, according to Strait Herald in Xiamen.
The newspaper said that since the beginning of this year, several cases of runaway businessmen who couldn't pay back high-interest private lenders have been reported, indicating that the Wenzhou private lending crisis has spread to Xiamen.
These businessmen include Wen Yirong, the former head of a branch of Xiamen International Bank and Lai Yuexiang, the owner of an investment guarantee company.
According to an insider of the private lending market in Xiamen, although government authorities have not published information, reliable resources say local police have received reports of loan shark cases involving amounts of up to 12 billion yuan (US$1.88 billion).
The report indicated that 60-70 creditors were directly involved in these cases and represented about 600-700 smaller creditors in turn.
A source from Xiamen Intermediate People's Court said however that no such statistics had been compiled, while confirming that the number of private loan disputes has indeed increased significantly.
A website for the court showed that among the 214 pages listing the names of persons subject to civil cases, 185 pages were related to private lending cases that occurred this year. In addition, half of civil cases were related to private lending disputes.
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