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15-05-2014, 10:00 AM
It may create a new wave of issue for S-Chips, especially those with weak balance sheet. One common among corporations in China, is the shadow "inter-companies lending" in different names...
China firms slow payments, file lawsuits, as unpaid debt weighs on finances
15 May 2014 06:55
[BEIJING] As China's economy continues to cool, companies are waiting longer and finding it harder to get paid for goods and services they've already sold, leading to record amounts of receivables - and potential write-offs - on corporate balance sheets.
At Longyuan Construction Group, an east China builder of high-rise offices, apartments and highways, receivables last year inched up 4.9 per cent to 4.1 billion yuan (US$657.3 million), while on average collection times extended to 95.2 days, compared with 76.3 days for 2011.
Slow collection of money owed is causing Longyuan to delay its own payments to steel and cement suppliers, Zhang Li, the company's board secretary, told Reuters, in a ripple effect that is being repeated across the economy.
"If you don't pay me and I pay others, aren't I just a sucker?" said Ms Zhang. "I'm not that stupid."
Growth in China's economy dipped to an 18-month low in the first quarter and may be on track this year for its weakest showing in more than two decades.
...
Source: Business Times Breaking News
China firms slow payments, file lawsuits, as unpaid debt weighs on finances
15 May 2014 06:55
[BEIJING] As China's economy continues to cool, companies are waiting longer and finding it harder to get paid for goods and services they've already sold, leading to record amounts of receivables - and potential write-offs - on corporate balance sheets.
At Longyuan Construction Group, an east China builder of high-rise offices, apartments and highways, receivables last year inched up 4.9 per cent to 4.1 billion yuan (US$657.3 million), while on average collection times extended to 95.2 days, compared with 76.3 days for 2011.
Slow collection of money owed is causing Longyuan to delay its own payments to steel and cement suppliers, Zhang Li, the company's board secretary, told Reuters, in a ripple effect that is being repeated across the economy.
"If you don't pay me and I pay others, aren't I just a sucker?" said Ms Zhang. "I'm not that stupid."
Growth in China's economy dipped to an 18-month low in the first quarter and may be on track this year for its weakest showing in more than two decades.
...
Source: Business Times Breaking News
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