Chi­nese com­pa­nies wait ... and wait ... and wait to get paid

Bloomberg Businessweek (Asia) - - MARKETS / FINANCE - ——By Ye Xie and Fox Hu

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

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