Chinese listed companies have reported a sharp rise in unpaid bills during the third quarter, in one of the clearest signs yet of the toll that China’s economic slowdown is taking on corporate balance sheets.
A Financial Times analysis revealed that 66 per cent of listed Chinese companies that reported third-quarter results showed a year-on-year increase in unpaid bills, called accounts receivable in accounting, as a proportion of sales, according to the S&P Capital IQ database.
China’s economy is on track to grow at less than 8 per cent this year, which would be its slowest in more than a decade. While that is still very fast by international standards, many companies have invested on the expectation of sustained double-digit growth and the sharp rise in accounts receivable is an indication of how a mild slowdown has caught them off guard.