However, the report added, longer payment delays did not go hand in hand with an increase in firms with overdue payments as the proportion of respondents that experienced an increase in the value fell to 26.8 per cent in 2022 from 35.5 per cent a year earlier.
A long payment delay could affect the production and operation of enterprises, impact bank credit and lead to more firms being caught in debt situations they are unable to resolve, which could further exacerbate financial risks.
The main reason for payment delays was found to be customers’ financial difficulties, given fierce competition and higher raw material prices.
China is considered the market where the risk of so-called ultra-long payment delays remains elevated compared to others, at 36.4 per cent, the survey said.
This is almost four times that of Japan and Singapore, where firms experienced the least chance of payments being overdue by more than six months exceeding 2 per cent of their annual turnover, according to Coface.
At a Politburo meeting in April, Beijing placed a focus on risks in key areas and to coordinate efforts to reform small- and medium-sized banks, insurance firms and trust institutions.
According to a research report released by the Bank of China on Monday, the global financial system will continue to face uncertainties in the third quarter, with credit and liquidity risks prominent.
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