meanwhile...chances of chinese credit crunch?, page-38

also with a situation like Charoi if it's out there that cash is tight these things will happen:

suppliers will want cash for purchases that will deplete cash in hand

as cash dries up workers are stood down

production slows, orders not filled

debtors will drag paying money owing hoping that Charoi will go kaput. That again tightens the cash at hand

This is a spiral to insolvency and unless the business is very sound and therefore a bank injects funds to operate, it's aufweidersen baby.

Multiply that by a factor of say a miserly 100 and that's a lot of money lost, a lot of workers walking the streets and a whack to the national export ledger.

If it's a municipality then it's money straight down the drain.