Not since 1999 have China's companies had so much trouble getting customers to actually pay for what they've bought.

It now takes about 83 days for the typical Chinese firm to collect cash for completed sales, almost twice as long as emerging-market peers. As payment delays spread from the industrial sector to technology and consumer companies, accounts receivable at the nation's public firms have swelled by 23 per cent over the past two years to about $590 billion ($777 billion), exceeding the annual economic output of Taiwan.

It now takes about 83 days for the typical Chinese firm to collect cash for completed sales. Credit:Bloomberg

The raft of unpaid bills - bigger than at any time since former Premier Zhu Rongji shuttered thousands of state-run companies at the turn of the century - shows how cash shortages at the weakest firms threaten not only banks and bondholders, but also China's vast web of interconnected supply chains. With corporate bankruptcies projected to climb 20 per cent this year, more Chinese businesses may be forced to choose between two unpleasant options: keep extending credit to potentially insolvent customers, or cut off the taps and watch sales sink.

"There is a knock-on effect through the economy," said Fraser Howie, the Singapore-based co-author of "Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise," who has followed the nation's markets for more than two decades. "Part of the end game is default and closure."