Capital funding by Chinese companies has ground to its slowest pace in three years, as a weakening economy, tight credit, and extended trade war with the U.S. dent sales growth and cash reserves, an analysis confirmed.
Companies are spending more days to turn stock into sales and eking out smaller revenue gains, the evaluation showed, in an economy growing at its weakest tempo in nearly 30 years, with many analysts anticipating the slowdown to intensify.
The scope became even more unsure Tuesday after U.S. President Donald Trump said a trade settlement China might have to hold until 2020 presidential polls.
Chinese companies raised capital spending by 1.6% in the three months by September against the same interval a year earlier, the weakest growth in three years, showed an analysis of nearly 2,900 firms with market capitalization above $100 million.
Though the federal government has taken measures to encourage lending, bankers said they’ve little appetite to lend to small companies due to the trade row and uncertain economic scope, as well as a years-long push to cut risk in the financial system.
Cash reserves at surveyed companies grew 5.6% on year in the September quarter, the weakest since the first quarter of last year. Moreover, the average number of days an organization holds inventory before sale was 108 in the first nine months of the year, topping an annual average of 100 or less in the last quarter.
Income grew 6.7%, the weakest in at least three years.