It’s typical in China for Chinese companies to have accounts receivable for 120 days and more. Western companies that choose to form joint ventures with companies are often shocked that Chinese managers tend, in general, to be comfortable with such long lags between delivery and payment. Payment in China, however, can come in a variety of forms: barter; favors; gifts; long bouts of KTV with attendant hostesses; new and promising deals.

Western companies do not have such AR tolerances, and prefer payment received within 30 days, if not sooner, no matter the nationality. But what do you do in China when a customer – actually, another Western company in Zhejiang province – has had its Chinese finance manager kidnapped in another province, and is unable to pay any of its bills. Well, you do what I did when a customer – a Westerner who’s also a good friend – told me just such a story: you laugh.

It seems the company had a joint venture with a Chinese company in southeast China, where Chinese employees had not been paid their salaries for a couple months. Of course, in today’s climate in which factories are shuttering at an alarming rate, a lack of salary payments for several months would of course imply their employer, too, will soon fold. The Western company was apparently responsible somehow for the monthly payments.The financial manager, surely aware of the lack of appropriation, had actually gone down to the southeastern operation ostensibly on a separate – though assuredly, related – book keeping errand.

Seeing their opportunity to finally get some leverage over the plight, the disgruntled employees grabbed the financial manager and put him under house-arrest. They made the demands clear to the Western operation up north: they would release him when they got paid their back salaries. I’m not clear on how many days he was actually held; but it was a nontrivial length of time, apparently.

Eventually, they got paid their salary the day the Western manager called me to apologize about the late payment of the invoice. At least, I could expect payment the beginning of the following week, by which time the hapless financial manager would have returned to home office in China.

“It’s alright!” I laughed through tears, “with a story like that, take another couple weeks!”

“Well,” my friend retorted, “if I’d known it was that easy to get an extension I would have told the story a while ago!”

This is China!