Companies in China face increased overdue payments in both length and amount: The seventh annual survey of corporate credit risk management in China – conducted in the fourth quarter of 2009 by Coface, the leading international credit insurance and credit management services group – has revealed that 36.9 percent of respondents consider there will not be an improvement in overdue payments by the end of 2010, with 7.8 percent indicating the situation will not improve for some time. This shows companies in China are yet to develop confidence regarding upcoming payment performances.

Although about 60 percent of respondents reported having benefited from the Chinese government’s large-scale economic stimulus package in 2009, they are unsure how to minimize non-payment risks in China. According to the survey, household electrical appliances, transportation, construction, agriculture, industrial machinery, steel and metals are the top six industries to have benefited from the stimulus package. Yet these sectors, with the exceptions of agriculture and transportation, also include the highest numbers of companies reporting long overdue payments accounting for over 2 percent of their total sales.

The key highlights are:

  • 36.9 percent of respondents consider there will not be an improvement in overdue payments by the end of 2010, with 7.8 percent indicating the situation will not improve for some time.
  • Companies in China face overdue payments with more average days overdue and greater weight in total domestic sales than in 2008. The number of respondents experiencing payments overdue for over 60 days has increased by 55 percent.
  • Among respondents offering credit sales, 56 percent more companies offered longer credit terms – of at least 90 days – in 2009 than in the previous year.

 To read the full release click on the link below.   Source: Coface Press Release

BIIA Newsletter May II – 2010 Issue