We are hearing from several Chinese manufacturers that they are reducing their credit terms. These factories previously had offered US customers they have had for several years terms of 100% at time of shipment or even net 30. They are now moving back to 50% at time of order and balance at time of shipment.
We are hearing that factories just don't have access to the credit needed to offer terms. This will not help them keep their long-term customers, and if this action becomes widespread will further weaken China's economy. It will be interesting to see what develops during 2Q.
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