Pandemic Fallout Strangling China's Private Sector with Cash Flow Crisis

Payment delays to private companies in China have surged since the pandemic, with over 60% reporting overdue payments. This is starving small businesses of cash flow.

Slowing demand is also hitting companies hard, ranked as the 2nd biggest risk to business operations.

The construction sector continues to be most impacted by payment delays, averaging 84 days overdue. This is linked to ongoing struggles in real estate.

Private companies are responding by becoming more risk-averse, taking on fewer projects, especially in real estate, and insisting on upfront payments.

There are calls for China to improve the business environment and protect property rights to restore business confidence and willingness to invest and expand.