Recently, China's private enterprises

The test will come on schedule in January, when businesses and individuals will have to settle accounts before the Chinese New Year.

In the past month, Wenzhou, China has attracted much attention due to frequent cracks in its large-scale private lending market.

Private lending refers to the lending of high interest lenders and large numbers of depositors to SMEs unable to obtain bank loans.

At the end of September, worries about Wenzhou suddenly increased.

Media reports said that some small and medium-sized enterprises began to "run away" because of the chain breaking of capital, and a shoemaking factory owner had committed suicide because he could not afford to borrow money from a loan. It was rumoured that the annual interest rate of some loans was as high as 100%.

The government quickly intervened. Premier Wen Jiabao inspected Wenzhou this month and asked banks to support small businesses, which were often turned to private lending by banks.

Wen Jiabao's visit to Wenzhou helped to improve the negative emotions and left some small businesses out of the brink of bankruptcy.

Analysts believe that if a large number of small businesses fail, they may jeopardize the formal banking system.

However, many people in Wenzhou are still waiting for debt collection day, which is the most difficult period even in the good year.

Hu Zhenhua, an economics professor at Wenzhou University, said: "Chinese people like to clean up debts from January 1st to the Spring Festival."

The lunar new year 2012 is the Gregorian calendar January 23rd.

Hu Zhenhua continued: "if we pay attention to this period of time, we may see more bosses' running away."

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To be sure, a full-blown crisis in the private lending market in Wenzhou does not pose a serious threat to China.

According to the central bank data, as of the end of March 2010, the scale of China's private lending market was 2 trillion and 400 billion yuan, less than 6% of China's total lending.

Wenzhou accounts for a smaller share of private lending.

But the government still has reason to worry that the bankruptcy of Wenzhou enterprises may trigger the Domino effect of corporate default.

If the real estate or the overall economy is more than expected

In the outskirts of Wenzhou's button production base, Qiaotou town, luxury cars and sports cars can be seen everywhere.

Many buttons manufacturers invested their money in a 33 story Luxury Apartments building, surrounded by farmland, polluted by nearby rivers, and smoked by factories in the distance.

However, behind the surface confidence and wealth is the plight of local business groups hanging in the air.

Many businessmen are worried about whether they can recover their loans in January and whether they can repay their debts.

At the age of 15, Chen Wensheng, a 34 year old button manufacturer, gave up his studies and joined the family business.

He said: "we are very worried about whether customers can afford to pay."