Debt collector Paul Ma has been working flat out for the past 10 months. As a part-time detective who has also run a trading company in Guangdong for the last decade, the economic downturn has given him a large number of unexpected clients. Waiting to meet government contacts in a western-style coffee bar close to the Guangdong People's Procuratorate, Mr Ma, in his late thirties, ordered a 'banana boat' ice-cream, and told the South China Morning Post he had been busy resolving debt disputes caused by factory closures in the Pearl River Delta. He said there was even more demand for debt collecting around the Lunar New Year because 'it is the time when everyone pays the money they owe to suppliers, workers, and even mistresses'. His assessment is based on the knowledge that, amid the financial meltdown, tens of thousands of Guangdong's small and medium-sized businesses (SMEs) in the low value-added and export-oriented manufacturing sector struggled to make it to the end of the lunar year. One battling business is Chiu Che Hon's Lucky Metal and Plastic in Dongguan's Tangxia township. Mr Chiu, 58, said he started clearing his debts to suppliers in December. He said he halved his workshop space and cut his payroll in the middle of last year, ensuring he had the money to keep operating this year. On the mainland, if manufacturers cannot clear their debt around the Lunar New Year, they can lose raw material supplies in the ensuing months, despite any overseas orders. 'For most SMEs, the year-end is tough,' Mr Chiu said. He said some factory owners were trying to apply for bank loans, which was proving difficult, or begging suppliers to extend credit terms. In one case, a supplier had recovered part of a debt by asking seven or eight people to illegally detain a Hong Kong manufacturer until about 160,000 yuan (HK$181,643) was paid. But not all debt-collecting cases involved violence or threats. Mr Ma said the easiest way to recover money was to confront debtors while they were with their mistresses. 'Seventy per cent of them will give us the money to save face,' he said. He generally took a month or so to check whether debtors had enough assets to pay outstanding amounts, and after the investigation clients had to decide whether to sue the debtors or, to save time, enlist gangsters to get the money back. But there was almost nothing they could do about debtors from Hong Kong, Taiwan and other places fleeing overseas. Though mainland officials blamed factory closures on the sudden global financial crisis, Mr Ma said his debt-collecting business started picking up as early as last March, about two months after new labour laws took effect and six months before the financial crisis kicked in. As the cost of raw materials rose, the yuan appreciated and export tax rebates were cut. Mr Ma found that an increasing number of SMEs shut down early last year, leaving unpaid suppliers. Some became his clients. He said that between 2004 and 2007, debt collecting contributed just 20 per cent to the revenue of his unlicensed detective firm, but it had grown to 80 per cent. Every month, he gained at least seven new clients and, because he did not have the time to deal with smaller debts, he took on only cases involving more than 600,000 yuan. Debt collectors usually took half of the money recovered. 'Yes, our business is booming in bad times,' he admitted.