China’s business owners have spent a record amount of time collecting money owed to them this year as clients, led by large companies and local governments, put off payments in the wake of an economic slowdown, reported the Financial Times.
Official data shows it took an average of 54 days for Chinese private manufacturers to get paid in the first three quarters of this year. That is up from 45 days in 2019 and 27 days five years ago.
The delay in debt collection has taken a toll on China’s post-virus economic recovery as private companies, an important employer, trimmed their growth plans for fear of late payments.
“The receivable problem is across the board,” said Wang Dan, a Shanghai-based economist at Hang Seng Bank China. “It suggests the economy is not in a normal shape.” She added that the receivable problem “suggests the economic recovery remains weak”.