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Hi Dianne,
I want to share my opinion about the dept issue.
Currently I am living in Hong Kong (since 1999) and I have been based in China for the last 6 month. For what I can see is that most of the lending of companies is related to their setting up of new production plants in China to be ready for the opening of the markets in 2005.
To understand this you must know that many of the factories in the south east asian region (Malaysia, Indonesia, Philippines.....)are owned by chinese and only to avoid the quota restrictions put on exports out of China.
Most of these manufacturers are eager to move back these capacities to China, mainly because of the lower costs and availability of labour.
Thus you can see a boom in setting up new production plants all over and especially in southern areas of China!
I spoke to one of our german machine suppliers and he told me that he had sold as many machines in the last year as he normally sells in 10 years to China. In comparission he has no or little business with the other countries mentioned.
So you can imagine the impact 2005 will have on this region.
Understandable that the manufacturers need a lot of money but I truly believe they will not have problems paying it back once the production is starting and they benefit of the quota free exports.
One question mark will remain which is the possible import duties that i.e. the US textile lobby wants to be introduced to protect them.
Lets see where we go from here.
Ganni
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