China's Premier Wen Jiabao has told the nation's banks to clean up lending policies that have left some businesses struggling with excessive borrowing costs as slowing export growth and other pressures eat into profits, state newspapers said on Wednesday.

Wen made the remarks while visiting Suzhou in China's east, where many manufacturers rely on exports for growth. He warned of tough times, promised more government support for technological upgrades, and also told lenders to offer more financing support to small enterprises.

Currently, the overall economic situation is generally healthy, but we're facing many new circumstances and problems, said Wen, according to the Chinese-language Financial News.

One is that exports have been declining more every month, said Wen, adding that the shrinking external market has run smack into rising overall business costs.

Wen vowed more government support to stabilize exports, but also pointed a finger at China's banks.

The financial order must be cleaned up, he said.

Many businesses have a problem of excessively high credit costs, and banks must truly solve the problem of unreasonable fees and additional conditions on loans, said Wen.

Over the past few years, China has faced a delicate monetary balancing act, first to inject funds into the financial system to stimulate growth in the wake of the 2008 financial crisis, and later to pull back on the levers to contain inflation and the risk of bad loans, many of which had flowed into the frothy real estate sector.

In October 2010, China's central bank began a tightening cycle of restricting bank lending by raising interest rates and further hiking banks' required reserves, a trend it recently appears to have started to unwind through fine-tuning in the wake of a slowdown in China's key export markets in Europe and the United States.

(Reporting by Chris Buckley; Editing by Jonathan Hopfner and Ken Wills)

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