China Premier says banks must ease pain for business

BEIJING, Dec 21 (Reuters) China's Premier Wen Jiabao has told the
nation's banks to clean up lending policies that have left some
businesses struggling with excessive borrowing costs as slowing export
growth and other pressures eat into profits, state newspapers said on
Wednesday.
Wen made the remarks while visiting Suzhou in China's
east, where many manufacturers rely on exports for growth. He warned of
tough times, promised more government support for technological
upgrades, and also told lenders to offer more financing support to small
enterprises.
"Currently, the overall economic situation is
generally healthy, but we're facing many new circumstances and
problems," said Wen, according to the Chineselanguage Financial News.
"One
is that exports have been declining more every month," said Wen, adding
that "the shrinking external market has run smack into rising overall
business costs."
Wen vowed more government support to stabilise exports, but also pointed a finger at China's banks.
"The financial order must be cleaned up," he said.
"Many
businesses have a problem of excessively high credit costs, and banks
must truly solve the problem of unreasonable fees and additional
conditions on loans," said Wen.
Over the past few years, China
has faced a delicate monetary balancing act, first to inject funds into
the financial system to stimulate growth in the wake of the 2008
financial crisis, and later to pull back on the levers to contain
inflation and the risk of bad loans, many of which had flowed into the
frothy real estate sector.
In October 2010, China's central bank
began a tightening cycle of restricting bank lending by raising interest
rates and further hiking banks' required reserves, a trend it recently
appears to have started to unwind through "finetuning" in the wake of a
slowdown in China's key export markets in Europe and the United States