Chinese listed companies have reported sharp growth in unpaid bills in the third quarter in a clear sign of the impact of China’s slowing economic growth on the country’s corporate sector, The Financial Times reported on Wednesday.
Third-quarter results posted by China’s listed companies show that 66 percent of them have reported a year-on-year increase in accounts receivable, with the hardest hit firms related to the construction and infrastructure sectors, including machinery makers, steel mills, coal and cement firms.
“China’s economy is on track to grow at less than 8 percent this year, which would be its slowest in more than a decade,” the paper said.
While this growth is still considered fast by international standards, “many companies have invested in the expectation of sustained double-digit growth and the sharp rise in accounts receivable is an indication of how even a mild slowdown has caught them off guard.”
Sany Heavy, ranked as the world’s ninth largest machinery producer by sales, reported an 83 percent increase in accounts receivable at the end of the third quarter from the beginning of the year to 21 billion yuan ($3.36 billion) while China’s leading machinery firm At Zoomlion posted a 69 percent increase in overdue sales repayments.