Half of Hong Kong Companies Expect Payment Conditions to Worsen

Half of Hong Kong Companies Expect Payment Conditions to Worsen

A survey found that 93% of businesses experienced late payments over the past year, while companies take an average of 144 days to collect payment after delivering goods.

Half of companies in Hong Kong expect payment conditions to deteriorate over the next 12 months, despite a stronger economic recovery, as late payments continue to strain businesses’ cash flow, according to Coface’s APAC Payment Survey 2026.

The survey found that 93% of Hong Kong respondents experienced late payments in the past year, compared with 91% across Asia-Pacific. Although Hong Kong’s economy grew 5.1% in the first half of 2026, its fastest half-year expansion in nearly five years, stronger growth has yet to translate into improved payment behavior.

The government raised its full-year growth forecast to between 3.5% and 4.5%, from a previous range of 2.5% to 3.5%. However, Coface said the recovery remains concentrated in sectors such as financial services and electronics re-exports, limiting its benefits for the broader economy.

“The economic recovery is real, but it remains narrowly based,” said Junyu Tan, regional economist for North Asia at Coface. He noted that strong headline economic figures have not eased the challenges facing many businesses, while thin margins in re-export trade continue to weigh on companies.

Long Collection Cycles Strain Cash Flow

Hong Kong businesses take an average of 144 days from product delivery to final payment collection, according to the survey. In transportation, energy and agriculture, the cash conversion cycle exceeds 160 days.

Energy, transportation and metals recorded the longest payment delays, with average overdue periods of around 80 days.

Despite relatively generous payment terms averaging 73 days in Hong Kong, about four in 10 respondents said payment delays had become more frequent and severe than a year earlier.

Nevertheless, 60% of surveyed companies do not expect payment terms to change over the next 12 months. Only 32% said they had become more cautious about payment risk over the past year, compared with 48% across Asia-Pacific.

The findings suggest that businesses may not be adjusting their risk management practices quickly enough to reflect growing concerns about payment conditions.

Business Relationships Influence Payment Risk

Customer relationships remain a major factor in how Hong Kong companies manage overdue payments. Respondents cited the strength or strategic importance of customer relationships as the leading contributor to payment delays, at 21%. Macroeconomic conditions accounted for 18%, while customers’ financial health or creditworthiness represented 17%.

Nearly three-quarters of respondents, or 73%, said long-standing relationships influence how much late payment they are willing to tolerate. The proportion was particularly high in energy and automotive and mobility, at 83% in both sectors, followed by transportation and logistics at 77% and construction and real estate at 71%.

However, relationships played a somewhat smaller role in Hong Kong than across the region. Only 22% of Hong Kong respondents said customer relationships influenced their tolerance of late payments to a great extent, compared with 32% across Asia-Pacific.

“Long-standing relationships are a strength of doing business in Hong Kong, and they are one reason companies stay flexible with customers they trust,” said Chris Murphy, general manager for Hong Kong at Coface.

But trust and a strong payment history do not necessarily reflect a customer's current financial position, Murphy said, adding that businesses should supplement established relationships with timely financial information and closer monitoring of payment behavior.

Risk Assessment Remains Less Data-Driven

Although 83% of Hong Kong respondents said they use financial information to at least a moderate extent when assessing customer payment risk, fewer rely heavily on such information than their regional counterparts.

Only 35% said financial information has a strong influence on their risk assessments, compared with 43% across Asia-Pacific. Just 14% reported using highly structured, analytics-driven approaches, less than half the regional figure of 31%.

Coface said businesses should take a more proactive approach to managing payment risk by monitoring customer payment behavior and treating delays as early warning signals before they escalate into defaults.

The findings highlight a disconnect between Hong Kong’s improving economic performance and the persistent financial pressures facing companies. With half of respondents anticipating further deterioration in payment conditions, businesses may need to strengthen credit assessments and collection practices to protect cash flow in the coming year.