Closed by the Communists in 1949 as a symbol of oppression of the poor, pawn shops have made a spectacular comeback in China, providing money quickly to a large class of companies and individuals that cannot borrow it from banks.
In its latest issue, the Hua Sheng (Voice of China) weekly said that, since the first pawn shop of the Communist era opened in Sichuan in 1987, the number had increased to more than 4,000, of which 1,257 were registered with the State Economic & Trade Commission (SETC).
The biggest in Beijing, the Jin Bao Dian in Xidan, one of the city's main shopping streets, had a turnover in 1999 of more than 60 million yuan (about HK$56.22 million) and more than 20,000 customers, with an annual growth in business of 20-30 per cent since 1992.
The shops lend money in exchange for goods such as gold and jewellery, diamonds, cameras, personal computers, electrical appliances, antiques, high-quality watches, bonds, stocks, cars and property.
They say 10 per cent of the goods are not reclaimed and they sell them in shops, although, according to regulations, they are supposed to dispose of them at public auctions.
Ninety per cent of their customers are individuals and the rest small and medium-size firms, which account for half their turnover.
Clients range from people who rush in and pawn their watches or gold necklaces to pay a hospital or restaurant bill, to the bosses of private companies who pawn their car or apartment because they need to raise 50,000-100,000 yuan in a hurry to complete a business deal.
