ANJANI TRIVEDI: Evergrande may be a harbinger as cash crunch hits China's SMEs

03 October 2021 - 08:13 By

Even the savviest investors were caught off-guard by the speed of China Evergrande Group's unravelling. They shouldn't have been: trouble has long been brewing at China Inc, where balance sheets are weakening in the face of a rocky economic recovery. This could be its worst blind spot yet.

At more than 1,100 listed companies in China's industrial and manufacturing sectors, receivables are piling up; cash conversion cycles are getting longer (that is, the time it takes to turn inventory investments into cash); and net short-term debt levels are becoming increasingly volatile...

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