Companies in Asia are facing more overdue payments as the macroeconomic problems facing the region filter through the supply chain.

In China, 80.6% of companies experienced overdue payments in 2015, with the the value of outstanding debt rising by 58.1% from 2014.

In its annual corporate payments survey of Asia Pacific, credit insurance firm Coface quizzed 2,793 companies in eight countries: Australia, China, Hong Kong, India, Japan, Singapore, Taiwan and Thailand.

On aggregate, 70% of companies in the region experienced overdue payments last year, no improvement on 2014.

What’s more, companies do not expect the situation to improve over the course of 2016. Those sectors hit hardest are construction, industrial machinery, automotive and metals. Companies in these industries are being affected most by the slowdown in China, particularly in its property sector.

Perhaps the industry that causes most concern is metals. Faced with a huge surplus of metals such as steel and a slowing construction sector, China has been accused of dumping steel by countries including the US, India and Australia at the WTO.

The US, on the other hand, has been accused of protectionism by China, with a levy placed on Chinese steel imports leading them to bring their own case to the WTO. Coface expects the situation to worsen.

“More than 50% of Chinese steel capacity that has been closed last year is now operational again,” Casper Burgering, ABN Amro

“The metals sector will probably continue to face challenges. The outlook for 2016 is negative, stemming from subdued Chinese and global demand, significant overcapacities and  low prices amid market disequilibrium. Restructuring in this sector is likely to kick start in 2016, commencing with the closure of zombie steel companies in China and the rise of M&A activities,” says the report.

This view is in line with most analysts studying the sector. In an email exchange, Casper Burgering, metals analyst at ABN Amro writes: “Improving steel prices and better steel market sentiment in China are certainly no incentive for high cost inefficient mills to cut capacity.

“From my resources I understand that since sentiment and steel prices in China have increased, more than 50% of Chinese steel capacity that has been closed last year is now operational again. This is not a good sign for market balance.”

The majority of those surveyed said that “customer financial difficulties” were the primary cause of late payments – again suggesting systemic risks in the Asian value chain.

“With mounting global uncertainties linked to China’s growth moderation, the fiscal difficulties experienced by oil exporting countries and US monetary normalisation, overall company payment experience in Asia is likely to remain weak in 2016,” says Jackit Wong, Asia Pacific economist at Coface.

Of concern is the fact that there has been a slight increase in overdue payments of 150 days or more. Coface is of the view that if a debt is outstanding for this long, it is unlikely to ever be repaid.

Much has been said and written about China’s highly leveraged corporations and regional governments.

The central government has in recent months launched a scheme of securitising corporate debts into bonds which can be traded – prompting comparisons to the subprime mortgage crisis in the US, whereby banks bundled and sold non-performing mortgages, only to spark the biggest global financial crisis for generations.

Interest in these bonds has reportedly been minimal, but the government has also been taking equity stakes in heavily indebted banks in exchange for absorbing some of their non-performing loans.