With China's problem on weak economic expansion, Chinese companies are facing lesser investment opportunities resulting to an increase by 18 percent of cash holdings.

The increase over the latest quarter is the biggest in six years at about US$1.2 trillion, excluding banks and brokerages.

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Based on the data collated by Bloomberg, the number also grew at a faster pace than in the US, Europe and Japan.

However, while having too much cash is a rather good problem, China Inc's unprecedented hoard is frustrating the policy makers and investors since the government has to increase growth by allocating more money in the financial system as companies are hesitant to spend on new projects.

This solution though is falling short. China is known to be a corporate risk-taker and has positively affected the market in the past 25 years.

Officials explain that companies do not take the risk because the drivers to invest are not there.

The trend where investors hoard money instead of invest is relatively new in China, where corporate risk-taking has been rewarded for much of the past 25 years.

However, the slower economic growth and the continuous global uncertainty has changed the mindset of Chinese investors, forcing them to sit on their cash stockpile.

China's economy grew below 7% from double-digit levels just a few years ago and investors are not happy.

While others are hoarding cash, a large number of Chinese companies do not have enough money to further invest.

According to a Bloomberg report, the country's onshore corporate bond market saw an unprecedented 17 defaults so far this year, more than double the tally for all of last year.

Aside from China, companies in Japan are also hoarding cash. According to reports, Japanese firms boosted cash holdings to a record in 2015, a sign they remain unconvinced that the government's fiscal and monetary stimulus will revive growth in Asia's second-largest economy.

TagsChina Inc, china investors