Times have changed for Yu Xingzhi since China’s economic boom years. Despite the slowing economy, sales at Shanghai Caison Color Material Chemical, are holding up. The trouble is, her customers — garment manufacturers and packaging producers buying her dyes and inks — are taking more time to pay for what they buy.

“Receivables are the unavoidable problem for traditional manufacturers. If you don’t accept receivables, you have no business. It’s standard industry practice, even though no one likes it,” says Ms Yu, the dye maker’s general manager.

It is a vicious circle and one threatening the health of the economy. Ever longer delays in bills being paid is creating a chain of squeezed cashflow and debt that runs from large state owned enterprises through to smaller suppliers and even employees struggling to pay their own bills.