China Loosens Credit Limits, Aims to Boost Crop Output

TO grapple with growing economic unease in cities and the countryside, the Chinese leadership is easing tight credit restrictions on lending to ailing state enterprises and trying to spur increased grain and cotton production, according to Western and Chinese analysts.

In speeches released yesterday, Zhu Rongji, vice premier and economic czar, urged the government to help state enterprises resolve problems and become efficient. Last summer, Beijing imposed harsh credit limits to end inflation and rampant financial and real estate speculation.

But anxious over the threat of labor unrest in troubled state-owned companies, Mr. Zhu indicated funds to help the enterprises will be available again. The State Statistical Bureau reported last month that 50 percent of the state enterprises are losing money while rapid economic growth has eased slightly, lessening inflationary pressures.

``They have decided to relax the money supply to help the state enterprises,'' says a Chinese adviser who attended recent economic meetings.

Beijing also is struggling to placate rural unrest over rising prices and corruption among local officials.

Textile factories, one of the largest employers in China, face price increases and shortages in cotton due to a shortfall in cotton production.

Recently, some factories have even been forced to stop production.

Referring to growing official reports of crime, feuds, and rural unrest, Ren Jianxin, a senior party official dealing with security matters, was quoted in the official People's Daily yesterday as saying: ``The security problems are escalating enormously in some rural areas, and the public reaction is intense.''

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK