2023 Coface China Corporate Payment Survey : Companies Report Shorter Payment Delays In 2022 And Expect Higher Economic Growth In 2023

Hong Kong SAR – Media OutReach – 23 May 2023 –

  • Coface’ surveyshows that fewer firms encountered payment delays in 2022. 40% of respondents reported overdue, down from 53% in 2021. The average payment delay was shortened from 86 to 83 days in 2022.
  • Fewer companies faced ultra-long payment delays (ULPDs).
  • Chemicals appeared the most vulnerable sector: 34% of respondents are reporting ULPDs exceeding 10% of turnover. The wood sector sees a similar trend with an increase from 0% in 2021 to 20% in 2022.
  • The pandemic – and subsequent lockdowns – was the top factor affecting businesses in 2022. As the Chinese government turned away from its zero-Covid policy, the share of respondents expecting an improvement in sales and cash flow increased, indicating optimism about China’s business operating environment in 2023.
  • Coface expects China’s GDP growth to accelerate to between 4% and 5% in 2023.

Bernard Aw, Chief Economist for Asia Pacific at Coface, said: “Despite businesses facing an economic slowdown in 2022 due to the Omicron wave and the subsequent strict lockdown response, credit terms lengthened during the year. Chinese businesses had to be more flexible as their customers needed more time to make payments amid tight liquidity and mobility restrictions that disrupted payment processes. The average payment terms increased from 77 days in 2021 to 81 days in 2022.

With companies offering longer payment terms, fewer reported payment delays in 2022: the share of respondents reporting overdue fell from 53% in 2021 to 40%, the smallest share in the past five years.