The 2024 Payment Practices Barometer survey for China was conducted during Q3 2024, and findings should therefore be viewed with this in mind.

Key takeaways from the report for China  

DSO management ramped up in China to mitigate risk of cash crunches

• Late payments currently affect, on average, just over one third of invoices issued by Chinese companies in B2B trade. Bad debts stand at an average 3% of all B2B sales on credit, with energy/fuel businesses the hardest hit. Overdue invoices are turned into cash on average three weeks beyond the due date, and 42% of businesses
  tell us this causes cashflow problems.
   
• Various strategies are used to mitigate the risk of liquidity crunches stemming from late payments. These include delaying investment plans, delaying payments to suppliers, and resorting to bank credit. Improved debt collection efficiency has also boosted financial resilience by reducing large swings in Days Sales Outstanding (DSO).

Optimism high among Chinese companies despite economic challenges

• There is more guarded optimism about the outlook for insolvency trends in the 12 months ahead among businesses in China. A stable rate of insolvencies is expected by 66% of companies in our survey, chiefly in the automotive industry. However, 28% of businesses tell us they anticipate a negative trend of insolvencies, especially in the energy/fuel sector. 
   
• Uncertainty about the state of the domestic economy is the major concern looking ahead for companies in China. They tell us they are worried about a marked slowdown amid frail
  domestic demand, although external demand remains resilient. This anxiety is felt in both the short-term and longterm across all sectors.

The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Its findings can give valuable insights into the current dynamics of corporate payment behaviour in B2B trade. It can also help companies doing business, or planning to do so, in the markets polled to identify emerging future trends in the payment practices of B2B customers. 

Interested in finding out more?

For a complete overview of the 2024 survey results for China, please download the full report available in the related documents section below. The regional report for Asia is also available for download in the section below.

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