Chinese firms offer credit for orders, but payment delays remain an issue: survey

Almost 80 per cent of Chinese firms offered payment terms in 2023, up from 50 per cent in 2022, according to a report from global trade credit insurance group Coface

Firms have continued to call for more efforts to alleviate their cash flow pressure, with 60 per cent reporting overdue payments last year, up from 57 per cent in 2022

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Chinese companies were found to be particularly prominent in providing more credit terms, with 79 per cent offering payment terms in 2023. Photo: AP

Published: 6:00am, 5 Jun 2024Updated: 7:58am, 5 Jun 2024

Chinese firms became active in offering credit to obtain orders last year amid hot domestic competition, but payment delays continued to haunt small businesses, a report from global trade credit insurance group Coface on Wednesday showed.

Companies were found to be particularly prominent in providing more credit terms, with 79 per cent offering payment terms in 2023, up from 50 per cent in 2022, marking the highest level since Coface began its survey in 2016.

But with the overall economic recovery struggling to sustain momentum, firms in China have continued to call for more efforts to alleviate their cash flow pressure, despite the survey finding a shorter delay in payments from a year earlier.

The average payment delay in China fell to 64 days last year from 83 days in 2022, lower than 74 days for Hong Kong companies, 70 days for Malaysian businesses, 64 days for firms in Thailand and 66 days for companies in India.

The delay in China, though, was still higher than 63 days in Singapore, 53 days in Taiwan and 50 days in Japan, the survey showed.

The annual payment survey, covering over 2,400 companies in the Asia-Pacific region, was conducted between December and March.