Overseas bad debt of China's foreign trade companies reaches US$30 billion

The overseas bad debt of China's foreign trade companies is close to 30 billion US dollars, and 50 percent of China's foreign traders have encountered delayed payment, an official with the Ministry of Commerce was quoted by the China Securities Journal as saying on Wednesday.

According to sample investigation, the bad debt rate of China's foreign trade companies in their international services has reached 5 percent, much higher than the average level in developed countries, which stands at 0.25 to 0.5 percent, said Chai Haitao, president of the Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

Chai made the remarks when attending a ceremony celebrating the first publication of a book on world trade credit risks, which was issued by the French global risk evaluating agency, Coface.

What Chinese enterprises face most frequently are credit risks, outstanding payment and breach of contracts, said Chai at the ceremony.

Due to fierce competitions among small and medium-sized Chinese exporters in electronics, apparels and light industry, some loose their requirements on international payment so as to seek more orders, leading to higher credit risks, said Chai.

Chinese exporters should pay more attention to these credit risks and make full use of such means as export credit insurance and credit risk consultancy, he said.

Source: Xinhua