Chinese exporters, currently plagued by paper-thin profits, are threatened by another emerging problem of defaulted payments from foreign clients, economists said on Wednesday.
To date, the aggregate overdue international accounts of export companies totaled 100 billion yuan (14.6 billion U.S. dollars), Mei Xinyu, a Ministry of Commerce economist, estimated.
The figure, while tiny compared with the country's 545.05 billion U.S. dollars of exports in the first five months, was further squeezed by the profit margins of exporters, which suffered from the yuan's appreciation and rising labor and raw materials costs, analysts said.
The situation would be more devastating this year as many foreign importers had gone bankrupt after the U.S. subprime mortgage crisis and could not pay their bills, Zhao Jinping, an economist with the Development Research Center of the State Council, told Xinhua.
To make things worse, many exporters allowed deferred payments to compete for orders from a weakened global market. This made them vulnerable to defaulted payments, he said.
Export companies should improve their risk management and make credit assessments of the buyers beforehand, instead of blindly tendering for orders, Mei suggested.
Source: Xinhua
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