Chinese companies wait ... and wait ... and wait to get paid
It now takes about 83 days for the typical Chinese firm to collect cash for completed sales, almost twice as long as in similar
emerging-market economies. Over two
years, accounts receivable at Chinese public companies rose 23%, to about $590b, more than the annual economic
output of Taiwan.
At 131 days, industrial firms in China take the longest to convert sales into cash “It’s a big problem when you have rising insolvencies, a bad economic environment, and less liquidity for small companies.” ——Mahamoud Islam, economist at Euler Hermes in Hong Kong The time it takes for companies to be paid rises as China’s GDP growth falls
Corporate bankruptcies in China are projected by Euler Hermes to climb 20 percent this year