Despite Asia’s subdued trade performance, the region’s companies are optimistic about their growth prospects, and are making moves to bolster their liquidity position to be able to fulfil new orders, fresh research has found.

Seven in 10 Asian companies expect to see rising demand for their products and services in the coming months, according to the latest edition of the Atradius Payment Practices Barometer for Asia, a poll of 1,800 businesses across China, Hong Kong, Indonesia, India, Japan, Singapore, Taiwan and Vietnam carried out during Q2 and Q3 this year.

The survey also revealed a strong commitment to address the challenges posed by deteriorating business-to-business (B2B) payment practices, which are reflective of the vulnerabilities affecting the global economy and marketplace.

More than 50% of companies in the region said they have increased efforts to collect overdue B2B invoices during the past 12 months, and this is bearing fruit: late payments across Asia declined by 12% over the past year, while bad debts fell to 5% of all B2B invoiced sales, from 7% in 2022.

In addition, companies opting to sell on credit are granting longer payment terms to B2B customers as a means to help them navigate cashflow difficulties, Atradius found, with these terms now averaging 60 days from invoicing. Meanwhile, almost half are turning to trade credit insurance to bolster their risk management framework.

“The flexible approach to credit management demonstrated by Asian businesses, which involves trade credit insurance for 47% of companies polled, is particularly relevant because it enables them to seize opportunities in a growing market while safeguarding against potential credit-related risks in B2B trade activities,” says Andreas Tesch, Atradius’ chief market officer. “[This] showcases their resilience and forward-thinking approach to business operations and cash flow risks mitigation.”

The findings by Atradius are in line with the World Trade Organization’s forecasts for the region’s trade over the next year. The supranational body currently expects Asia’s trade growth to fall below an already sluggish global average for the second year running this year. However, for 2024, it predicts Asia will roar back to life, with a world-beating 5.5% increase in exports.