The cash flow problem is also becoming an increasing cause for concern. While in Europe margins are the highest burden, the major problems for China are related to the new import and VAT regulations. The tanners, who are not supported by an efficient and supportive local government in receiving quick refunds, are seeing their cash positions shrink as quickly as their VAT credits are rising. So the main concern continues to be the financial situation, while demand for leather and leather products is still not causing any trouble in the general market.

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