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Country Risk Climate Greater China Region: Coface Survey Reveals Higher Credit Risk

A survey of corporate credit risks management across the Greater China region, China, Hong Kong and Taiwan, was conducted in the fourth quarter of 2012 by Coface, a leading global credit insurance group. This survey revealed that China and Hong Kong enterprises are exposed to higher credit risks as evidenced by sharply increased amount of overdue. Access to finance is a key concern for enterprises especially SMEs in China. Enterprises in this region are less optimistic on the recovery of global and local economies.

  • Over 40% of interviewed enterprises in Hong Kong indicated increase of overdue
  • Over 65% of interviewed China and Hong Kong enterprises reported fierce competition impacting margin caused financial difficulties of buyers
  • Over 30% of Hong Kong enterprises’ mentioned the rising raw material prices as the second reason caused financial difficulties of buyers
  • 82% of Chinese enterprises do not believe global recovery in 2013
  • Textile, clothing & shoes : The recovery of EU and US markets is critical as still a majority of enterprises in Hong Kong, China and Taiwan relies on export to these markets. Competition in domestic market is also very intense in this sector.
  • Household electric & electronic appliances: The sector is highly export oriented in the region. Except high end products like smart-phones and tablets, medium to low end appliances are badly hit by slow demand in export market, high competition, fast changing technology trend and rising production costs.

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Source:  Coface Press Release

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