China's Guangdong Plastics Exchange (GDPE) announced Monday that it has sealed a cooperation agreement with Shanghai-based SPD Bank that will provide its trading companies with up to 1 billion yuan (US$146 million) in physical commodity-based financing.

In an interview with Guangzhou Daily, GDPE Vice President Liang Hongbing said the move is intended to alleviate cash flow pressure among trading companies. Small and midsize plastics firms in China have been facing a shortage of cash flow since last year, he said. Combing Chinese and foreign markets, there are nearly 10,000 different grades of plastic resins. Under the pressure of soft export demand and limited capital, a good number of plastic resin makers, processors and trading companies are faced with operational difficulties.

GDPE will continue to provide financing for its members. The amount of physical commodity-based financing credit is expected to reach 10 billion yuan (US$1.5 billion) in the next three years and benefit thousands of small and midsize enterprises, Liang said.