NewBusiness slump will raise insolvencies in China, Hong Kong and Singapore, says survey, as battle with '3D' trio looms
French credit insurer Euler Hermes warns that corporate distress is about to ratchet higher, led by a 25 per cent surge in company insolvencies in China and Singapore this year
China, Hong Kong and Singapore are set to register a sharp increase in company insolvencies this year and next, marking the first uptick in insolvencies around the region since the global crisis in 2008, according to a credit risk survey.
China is expected to log a 25 per cent increase in company insolvencies in 2015 on year, and an additional 20 per cent on year increase in 2016, according to the Paris-headquartered credit insurer Euler Hermes. In Hong Kong insolvencies will rise 22 per cent in 2015 on year, while in Singapore they are forecast to rise 25 per cent. Next year Hong Kong and Singapore will see a 15 per cent increase in insolvencies, the credit insurer said.
In reference to China, Euler Hermes noted that insolvencies will “increase significantly”, as it along with other trade sensitive countries are at high risk of non-payment.
“Construction, metals and mining, low-end manufacturing and export-related industries are the sectors that might be impacted the most,” the credit insurer said.
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The Asia Pacific average for insolvencies is expected to grow 10 per cent and 11 per cent respectively in 2015 and 2016.