China Local Gov’t Debt Relief May Ease Financial Strain on Tourism Sector, Insiders Say

(Yicai) Oct. 21 — The Chinese central government’s decision to roll out policies to help resolve local government debt may alleviate the issue of unpaid accounts receivable owed to companies in the tourism and hotel sectors, according to industry insiders.

“We receive a significant number of local government procurement orders every year, but payment timelines differ depending on each government’s situation,” the head of a large Chinese tourism company told Yicai. “Some pay quickly, while others have longer payment cycles.”

Tourism and hotel businesses accumulate accounts receivable in several ways, including operating on a ‘buy now, pay later’ model, being involved in local government-backed projects, and having there…