Do increases in accounts receivable by Chinese firms suggest anything ?

An article in CNN ( describes increases in accounts receivable by Chinese firms – 83 % increase for machinery manufacturer Sany Heavy, 169 % increase for First Tractor, and a 69% increase for Zoolion. Some reports suggest that firms are continuing to produce and ship even when demand slackens. But banks do not seem to show any changes in credit quality. Should such dramatic increases in accounts receivable suggest an increasing risk associated with Chinese firms ? Or should they be treated like temporary inventory changes of financial flows, and thus considered irrelevant in understanding Chinese industrial supply chains ? In general, how should financial flows and the link to physical flows be reconciled across a supply chain ?

About aviyer2010

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