HONG KONG SAR – Media OutReach<\/a>\u00a0– 5 July 2021 – Coface<\/a>‘s
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65%
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However,
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2020
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With
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By
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With
This greatly benefited several
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“Our baseline scenario assumes that
The complete report is available\u00a0here<\/a>.<\/p>\n<\/p><\/div>\n\n HONG KONG SAR – Media OutReach\u00a0– 5 July 2021 – Coface‘s
2021 Asia Corporate Payment Survey, conducted between October 2020 and March
2021, provides insights into the evolution of payment behaviour and credit
management practices of over 2,500 companies across the Asia Pacific region
during a pandemic year. Respondents came from nine markets (Australia, China,
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\n2021 Asia Corporate Payment Survey, conducted between October 2020 and March
\n2021, provides insights into the evolution of payment behaviour and credit
\nmanagement practices of over 2,500 companies across the Asia Pacific region
\nduring a pandemic year. Respondents came from nine markets (Australia, China,
\nHong Kong SAR, India, Japan, Malaysia, Singapore, Thailand and Taiwan) and 13
\nsectors located in the Asia-Pacific region. <\/b><\/p>\n
\n
<\/p>\n
\n
<\/p>\n No deterioration
\nof payment delays despite the impact of COVID <\/b><\/h3>\n
\n
<\/p>\n
\nof respondents experienced payment delays in 2020, similar to 2019. Despite a weakened economic environment, the survey conducted by Coface shows that payment delays improved in 2020,<\/b>\u00a0with
\nthe average duration of overdue payments falling to a five-year low, thanks to
\nstrong government policy responses. Shorter payment delays were seen across six
\nof the nine surveyed economies and 10 out of 13 sectors. This trend was
\npartially due to robust and coordinated government policy responses to soften
\nthe impact of the pandemic on business activity, as well as the move by
\ncompanies towards tightening credit management and strengthening cash-flow
\nresiliency. This tighter credit policy was reflected by the average duration of
\npayment delays in Asia Pacific, which fell to 79 days in 2020, down from 85 in
\n2019, and its shortest length since 2015.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nthere was a build-up of credit risks in Australia and Hong Kong, with both
\nreporting a strong increase in late payments, and more crucially, a sharp rise
\nin ultra-long payment delays (ULPDs, over 180 days) amounting to over 2% of
\nannual turnover. According to Coface’s experience, 80% of ultra-long payment
\ndelays (ULPDs, over 180 days) are never paid. Meanwhile, the retail, construction, <\/b>and transport<\/b> sectors \u2013 among the worst
\nhit by the pandemic \u2013 \u00a0 saw the largest
\nincreases in ULPDs over 2% of their annual turnover, indicating an increase in cash flow risk.<\/b><\/p>\n
\n
<\/p>\n
\n
<\/p>\n Economic
\nimprovement in 2021: Companies in Australia and the automotive industry are
\nmost optimistic <\/b><\/h3>\n
\n
<\/p>\n
\nwas characterised by the shock of Covid-19 on both economies and society.
\nUnlike previous recessions, which tended to be gradual and shallower, the
\npandemic recession was rapid and deep due to the unique elements of the
\ncoronavirus pandemic. Companies were surveyed about the impact of Covid-19 on
\ntheir business operations. In Japan and Taiwan, a reduction in demand was the
\ntop reason impacting companies’ sales and cash-flows, whereas in China, higher
\nmaterial prices were the most-cited reason. In India, where many companies rely
\non migrant workers, the top impact cited was insufficient workforces due to
\nlockdown measures disrupting business operations.<\/span><\/p>\n
\n
<\/p>\n![](\"https:\/\/release.media-outreach.com\/release.php\/Images\/Thumb\/500x0\/160643\/Economic-Growth-EN.jpg#image-160643\")
<\/span><\/p>\n
\n
<\/p>\n
\nrobust and coordinated policy responses, an accelerated shift towards
\ndigitalisation, and countries reopening parts of their economy after strict
\nlockdown measures, the recovery was quick but uneven. Companies nevertheless expect that economic growth will improve in
\n2021. Australian firms were the most optimistic, with 80% of respondents
\nanticipating higher growth<\/b>, followed by India (76%), China (73%), Malaysia
\n(73%) and Taiwan (71%). In contrast, Japan was the only country where less than
\ntwo-thirds of respondents (61%) expect an improvement in economic growth during
\n2021.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nsectors, automotive is the most
\nconfident regarding year-ahead sales<\/b>, with 66% of respondents expecting an
\nimprovement. This was followed by energy (64%), metals (64%), paper (63%) and
\npharmaceutical (61%). The highest proportion of companies anticipating an
\nimprovement in cash flows over the next 12 months were found in automotive,
\nagri-food, and pharmaceutical at 55% each, followed by metals (53%), paper
\n(52%), and chemicals (51%).<\/p>\n
\n
<\/p>\n
\n
<\/p>\n Information &
\ncommunications equipment export drives growth in Asia but risks remain<\/b><\/h3>\n
\n
<\/p>\n
\nthe ongoing move towards “normal” business conditions, we expect the region to experience
\npositive growth after contracting in 2020. The
\npace of expansion will be the fastest in India (+9.0%), which saw the sharpest
\ncontraction among the nine surveyed economies during 2020<\/b>. This is followed
\nby China (+7.5%), Singapore (+6.3%), Taiwan (+5.6%), Australia (5.0%), Hong
\nKong (+4.8%), Malaysia (+4.6%), Japan (+2.7%) and Thailand (+2.2%). External demand has been a key driver of
\nthe recovery for Asia, as a global shift towards remote working and remote
\nlearning drove a global need for information and communications (ICT) equipment<\/b>.
\n<\/p>\n
\n
\n
\n
<\/p>\n
\neconomies in the region that are key exporters of ICT products <\/b> ,
\nsuch as China (+40% YTD), Taiwan (21% YTD), Malaysia (28% YTD) and Singapore
\n(9% YTD). An increase in capital investment also boosted sales of electronic
\nand electrical machinery. However, the recovery in private consumption was much
\nmore gradual, and lagged behind growth in manufacturing and exports as labour
\nmarket improvements remained weak and many parts of the APAC region experienced
\nrenewed mobility restrictions and lockdowns. Curbs on international travel
\nremained largely in place, which prevented the tourism sector from mounting a
\nrecovery. <\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nthere will be no new wave of COVID-19 infections in the second half of 2021,
\nand that a ramp-up of vaccination improves the resiliency of the recovery. The
\ncaveat is that the current environment remains difficult to predict. Moreover,
\nthere are rising risks to the recovery, such as the global semiconductor
\nshortage, which could limit Asian export growth, and rising commodity prices,
\nwhich could compress corporate margins and weigh on demand,” explained <\/i>
\nBernard Aw, Coface’s Asia-Pacific
\nEconomist. <\/b><\/p>\n
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