Qin Nan, the chief executive of a Beijing-based manufacturer, needs to borrow at least Rmb5m ($740,000) to expand production of his company’s air purifiers and air conditioners. But because his company lacks an equivalent amount of collateral in property and other assets, Chinese banks were willing to lend only Rmb2m.

“We didn’t have any more collateral to offer so [bank financing] was a dead end,” Mr Qin told the Financial Times. “We borrowed bridge financing from private channels at interest rates as high as 3 per cent a month [or 36 per cent a year] but paid back the money quickly.” He said he was now exploring “all possible channels” of additional funding, including private equity firms. 

Mr Qin’s grievances, which he recently aired on social media, are increasingly common among private sector companies in the world’s second-largest economy, which have been hit by a squeeze on lending as Beijing has worked to reduce the economy’s dependence on debt-fuelled stimulus. If their complaints are not addressed, the consequences could be disastrous for Chinese officials as they try to avoid a precipitous deceleration in economic growth, which last year slowed to a 28-year low of 6.6 per cent, according to data released on Monday.