Asia sees ‘concerning’ rise in long payment delays amid turbulence: report
Chinese and Indian firms are pulling back from selling on credit as the risk of defaults rises, new report finds
Companies across the Asia-Pacific region – and especially those in China – are becoming more cautious about selling on credit, as a turbulent global economy leads to a “concerning” rise in long payment delays, a new report has found.
Two-thirds of Asia-Pacific firms expect payment terms to shorten over the next six months, which suggests “caution and higher priority for cash preservation amid heightened uncertainty”, global trade credit insurer Coface found in its latest Asia Payment survey released on Wednesday.
Though payment terms edged up slightly in 2023, rising from 64 days to 65 days, they remained well below the 2018-2022 average of 69 days, reflecting tighter credit conditions, according to the survey of 2,600 companies conducted between December 2024 and March 2025.
Mainland China recorded the steepest drop in the share of firms offering sales on credit among the nine economies surveyed, which also included Australia, Hong Kong, Taiwan, Japan, Malaysia, India, Singapore and Thailand.
Some 65 per cent of Chinese firms said they offered payment terms in 2024, down 14 percentage points from a year earlier, the report said. India followed with a nine-point drop, while Hong Kong posted the biggest increase – up 10 points to 91.4 per cent.
The share of Asian companies reporting payment overdues fell to a record low of 49 per cent last year, from 60 per cent in 2023, which the report attributed to “longer payment terms in most markets [that] provided more time for companies to settle payments and avoid overdues”.
But what Coface called a “concerning trend” was the sharp rise in Asian firms reporting ultra-long payment delays – lapses of over 180 days – on fees exceeding 2 per cent of their annual turnover, which jumped to 40 per cent in 2024 from 23 per cent a year earlier.