GDP growth is forecast to accelerate to 3.2% in 2018, the strongest annual expansion since 2011. However, the chances of it improving for a longer period appear to be lower than expected. This is largely due to the increase in US protectionist measures and their potential for triggering a trade war with Asian countries at the centre. This in return raises fears of Asia Pacific exporters that turnovers will decline. Suppliers focusing on domestic trade, on the contrary, consider the introduction of international trade barriers to be an opportunity for growth. 45% of the exporters surveyed by Atradius in the region expect their turnover to decline 10% to 20% due to uncertainty over and changes in trade agreements. These are results that emerge from the latest 2018 edition of the Atradius Payment Practices Barometer for Asia Pacific.
According to the survey, 52% of the suppliers surveyed in China are pessimistic about potential export turnover losses due to the introduction of trade barriers such as tariffs or targeted restrictions. The opinions of Chinese suppliers are shared by respondents in Indonesia (65%), Taiwan (48%) and Hong Kong (47%). All economies with deeply intertwined trade relationships with China.
Despite concerns over the impact of protectionist trends on the Asia Pacific trade outlook, countries in the region are striving to reinforce trade ties with the rest of the world, increasingly turning to Australia for economic and trade cooperation. This may explain why 54% of the Australian suppliers surveyed do not expect a negative impact on their businesses’ turnover in the coming months. Japanese respondents (51%) share the same optimistic view.
Eric den Boogert, Managing Director of Atradius Asia comments: “Many Asian companies are now benefitting from further liberalisation of international trade as new trade agreements are agreed, or existing ones enhanced. With the growing opportunities, providing our customers with the confidence they need to expand with the right business partners is a priority for us.”
The report further addresses details on payment duration; payment periods increased from 55 days in 2017 to 57 days in 2018. Except for China and Singapore, all APAC countries have experienced an increase in payment duration over the past year. While 2018 brought small changes in the average proportion of uncollectable B2B receivables, some things remain the same — the main reason for writing off B2B receivables as uncollectable is the customer going bankrupt or out of business.