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 yesterday (11).

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% 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%.

The share of Asian companies reporting payment overdues fell to a record low of 49% last year, from 60% 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% of their annual turnover, which jumped to 40% in 2024 from 23% a year earlier.

(South China Morning Post)