2024年亚太地区首席财务官调查 理解亚太地区的贸易情绪 APAC CFO Survey 2024 Comprehending trade sentiments in Asia Pacific

AllianzTrade

Executive

summary

2023trade

situation

2023payment

trends

Riskmitigation

strategies

Trade

confidencelevel

2024business

outlookandpriorities

Opportunitiesin

e-commerce

Conclusion

APACCFOSurvey2024

ComprehendingtradesentimentsinAsiaPacific

AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

Foreword

Globalinsolvencies

+9%in2024

Globaltrade

+3%in2024

2023trade

situation

COVID-19biggestimpactfor

79%respondents

PaulFlanagan

RegionalCEO,

AllianzTradeinAsiaPacific

Afterafewtumultuousyears–the

pandemictothewarinUkraineand

skyrocketinginflationjusttonameafew–theyearof2024willfaceanewroundofeconomicuncertaintyaseconomies

thataccountfor60%ofglobalGDPareheadedtothepolls.Thismaycastfurthershadowsonglobaltrade,asweexpectittogrowbyamere3%involumethisyear,whileglobalinsolvenciesaretappedtoincreaseby9%in2024.

WeconductedthissurveylatelastyearoncompanyCFOs,controllersandfinance

directors.Weaskedabouttheirbusinessperformanceoverthepastyear,paymentbehaviorsthattheyencountered,

constraintsthattheyfacedwhenit

comestoexpandingtonewcustomers

andmarkets,andtheirchoiceofrisk

mitigatingmeasuresnavigatingforward.Intotalwereceived479responses.

Unsurprisingly,Covid-19,thoughseemedlikeadistantpast,affectedthebusinessofourrespondentsaspickedbynearly

79%ofrespondents.Highinputcosts

andinflationcameaclosesecond,at

around76%and75%respectively.Morethan85%ofrespondentshaddelayed

ornon-paymentsfromtheircustomers,

notablyintheelectronicsandsoftware

&ITservicessectors.Delaysinsuppliers’deliveryandcashflowissuesarethenextheadachesinline,ataround45%and

36%respectively.

2023payment

trends

Riskmitigation

strategies

Lookingahead,about43%ofrespondentspickedincreasinginvestmentintechnologyandresearch&developmentasthemostcrucialelementswhenitcomestodrivingbusinessgrowthinthenext12months.Thisisfollowedbyexpandingproductsuiteandpenetratingnewmarkets,bothataround37%,thelatteriswhereAllianzTradeandourcreditsolutionscanhelp.Collaboratingwithnewpartnerswasalsoakeystrategy,aspickedbyover33%ofrespondents.

Withglobaltraderapidlymovingonline,

wealsotookasanopportunitytogauge

confidencelevel

themarketsentimentintermsofB2Bonlinetrade.Over61%ofrespondentsstatedtheyarealreadysellingonline.Amongthem,

Trade

2024business

outlookandpriorities

over72%areofferingcredittermsontheironlinesales;amongthosewhodon’t,over28%aredeterminedtostartdoingsointhenearfuture.Thisisalignedwellwithwhatwehavelaunchedinthemarket,ourBuy-Now-Pay-Later(BNPL)solutiontocatertothemarketneedsandthegrowthpotentialine-commerceB2Btrade.

Iwishtoonceagainconveymysincere

gratitudetotheseniorexecutiveswho

participatedinthissurvey.Yourviewsandfeedbackhaveenabledustogainadeeperunderstandingoftheevolutionofglobal

trade,inparticularinthepost-pandemic

Opportunitiesin

e-commerce

world.Asalways,yourcommentsarevitaltousandwouldhelpusfurtherfinetuneourpositioningandproductoffering.Welookforwardtocontinuingtoworkcloselywithyouandtoachievingmutualgrowthahead.

APACCFOSURVEY2024

Executive

summary

Conclusion

2AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

Executive

summary

2023trade

situation

APACCFOSURVEY2024

Contents

PAGE4

Executivesummary

2023payment

trends

Lookingback:

PAGE5-6

12023tradesituation

8

Riskmitigation

22023paymenttrends

strategies

11

3Riskmitigationstrategies

Lookingforward:

confidencelevel

14

Trade

4Tradeconfidencelevel

PAGE15-18

52024businessoutlookandpriorities

outlookandpriorities

2024business

PAGE19

6Opportunitiesine-commerce

PAGE20

Conclusion

Opportunitiesin

e-commerce

Conclusion

3AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

APACCFOSURVEY2024

85%

ofcompanieshave

struggledagainstpaymentissuesoverthepastyear:

LatepaymentsNon-payments

57%

Executivesummary

28%

Topconcerns:

57%

Cashflowconstraints

43%

riskofnon-payments

68%

Riskmitigation

strategies

Trade

confidencelevel

2024business

outlookandpriorities

Opportunitiesin

e-commerce

Conclusion

ofcompanieshaveadedicatedriskteamwithinthecompany

Executive

summary

2023trade

situation

2023payment

trends

ThisCFOSurvey,ourfirstafterthepandemic,gathered

479responsesfromcompaniesoperatingin11locationsandacross19sectors.Amongthesamplesize,around64%aresmallandmedium-sizedenterprises(SMEs)(annual

turnovernotexceedingUS$50million),20%aremid-sizedorganisations(US$50milliontoUS$250million)whiletheremaining16%areormultinationalcorporations(MNCs)(US$250millionandabove).

Themainfocusofthissurveyistofindoutthetrading

behaviorsofourrespondentsandtheirforward-lookingplans.Withover70%ofrespondentsstatingthatthey

tradeoncredit,atleast1out2companieshavefacedlatepayments,whilenearly28%facednon-payments,whichcombinedtoaveryalarming85%ofcompaniesthathavestruggledwithpaymentissuesoverthepastyear.

Thetopsectorsthatfacedlatepaymentsareelectronics,software&ITservicesaswellasmachinery&equipment.Asfornon-payment,itwassoftware&ITservices,

computer&telecomaswellaselectronics.Apartfrom

paymentissues,nearly22%oftherespondentsfaced

insolventcustomers.Constructionandelectronicssectorstoppedthelist,whilecloselyfollowedbythesoftware&ITservicessector.

Thisresonateswiththequestiontoourrespondents

aboutthetopconcernsfortheirbusiness,withcash

flowconstraintscomingoutthetopatabout57%.The

secondmostcommonconcern,pickedbynearly43%ofrespondents,wastheriskofnon-payment.Thisisthenfollowedbyadministrativeburdenandcostoffinancing,withlackofcreditriskmanagementexpertisewithinthecompanycompletingthetopfiveatover30%.

Asformanagingrisks,over68%ofrespondentsstatedthattheyhaveadedicatedriskteamwithinthecompany(63%ofSMEs,84%ofMNCs).However,whenitcomestorisk

mitigatingstrategies,resultsarequiteevenlyspreadwithtopthreebeingrequestingadvancepayments,conductingthoroughcustomerchecksandapplyingtightercreditlimitonlesscreditworthycustomers.Tradecreditinsurance,oneofthemosteffectiveandaffordableriskmitigatingtools,camenextatabout10%.Sectorsthatusedtradecredit

insuranceastheirriskmitigationstrategyareelectronics,computer&telecomaswellaschemicals.

4AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

APACCFOSURVEY2024

Executive

summary

Lookingback:

2023trade

situation

2023tradesituation

2023payment

Iftherewasonewordthatencapsulatedtheyear2023for

trends

enterprises,itwas“testing”.Transitioningoutoftheglobal

Covid-19pandemic—howtopivotbusinessinthenext

normal—wasjustoneofthetrialsthat2023presentedto

enterprisesintheAsiaPacific(APAC)and,indeed,globally.TheRussia-UkraineandHamas-Israelwars,majorclimate

disasters(ragingfiresandoverwhelmingfloods),alongwithaccelerateddigitisationandtalentshortages,wereother

Riskmitigation

strategies

macrofactorsthatputahugestrainonoperationalcertainty.

Titanicortiny,businessesofallsizesweremorethanput

throughtheirpacesacrossseveralotherfronts.Companieshadalsotocometogripswithinflationandthetwinwoesofdelayedanddefaultedpayments.Ifinflationraised

Trade

confidencelevel

expendituresthroughtheroof,lateornon-paymentssmotheredbusinessconfidence.Liquiditywasseverelytaxed,impactingexpansionpossibilities.Indeed,thespectreofinsolvencywasever-present.

Further,thesestrainsandstressorsaffectedsupplychain

securityaswell.Delaysincustomerpaymentornon-

2024business

outlookandpriorities

Opportunitiesin

e-commerce

Conclusion

paymenthadaknock-oneffectonsupplierstoo,hinderingtheirtimelydeliveryofgoodsandservices.And,inaviciouscircle,cashflowissuesmeantthatbankswerereluctanttohandoutcreditlines,furtherimpactingoperationalviability.

5AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

APACCFOSURVEY2024

Businesssituationinpast12months

Figure1.1demonstratestheimpactthatthese

turbulenceshadonthecompaniessurveyedforthisreport,whetherSMEs,mid-sizedorganizationsor

MNCs.Challenges,fromlate-payersanddefaulterstoinadequatecreditlines,were“sometimes”,ifnot

“frequently”,experiencedbythecompaniessurveyed(Figure1.2).Asaresult,cashflowconstraintswasapressingandpresentconcern(Figure1.3).

Here'sthedeepdive.Apartfromkeypost-Covid

adjustments,businessesintheAPACmarketsalso

grappledwithotherstrainsandstressors(Figure1.1).

•Highinputcosts(76.0%)andinflation(75.2%)wereneck-and-neckasthesecondandthirdfactorsthataffectedcompaniesafterpost-Covid.

•Thetwinchallengesofdelayedpayments(67.2%),

andahigherriskofinsolvencyalongwithunpaid

invoices(57.8%)werealsosourcesofbusinessdistress.

•Supplychaindisruptions(64.7%)wasanotherkeychallenge.

Someofthefactorsthataffectedcompanies,suchasdelayedcustomerpaymentsandsupplierdelaysalsobecameoperationalchallenges(Figure1.2).

•Delayedpaymentfromcustomers(57.4%)toppedthelistofday-to-dayanxieties.

•Companiesalsofaceddelaysinsupplierdeliveriesanddefaults(44.7%).

•Cashflowissues(35.7%)wasthirdonthelistofchallenges.

Ahealthyinflowofaccountsreceivableensuresthe

smoothoutflowofexpenditureforoverheadssuchas

employeewagesandrentals.Liquiditybottlenecks

createproblemsnotonlyforcashoutflowsbutalsolimitopportunitiesfordiversificationofcustomerbaseand

productsuiteexpansions,whichwerealsokeyconcerns(Figure1.3).

•Notsurprisingly,cashflowconstraints(56.8%)—the

inabilitytoeffectivelymanagecashinflowandoutflow

—toppedthelistofbusinessconcerns.

•Whileliquiditywasthechiefinternalpreoccupation,theriskofnon-payment(42.6%)wasthechiefexternalfactorthatcausedapprehension.

•Administrativeburden(41.3%)—thetimeandcostofattendingtocomplianceandregulations,orthe

processofapplyingforpublic-servicebenefits—wasthirdonthelistofconcerns.

6AllianzTradeisthetrademarkusedtodesignatearangeofservices

Figure1.1:Keyfactorsthataffectedbusinessesinthepast12months

COVID-19

Highinputcosts

Inflation

Delayedpayments

SupplychaindisruptionsReductionintrade&

exportopportunities

Higherriskofinsolvency/defaultpayments

OngoingwarinUkraine

Politicalconflict

78.7%

76.0%

75.2%

67.2%

64.7%

62.2%

57.8%

57.6%

54.1%

Figure1.2:Keyoperationalchallengesthatbusinessesexperiencedinthepast12months

Delayedpayment

fromcustomers

Suppliersdelivery

delay/default

Cashflowissues

Non-payment

fromcustomers

Cyberattack

Creditlinerefusal

frombank(s)

Insolventcustomers/bankruptcies

Fraud

57.4%

44.7%

35.7%

27.6%

25.1%

23.2%

21.9%

17.5%

Figure1.3:Keyconcernsthatappliedtobusinessesinthepast12months

Cashflowconstraints

Riskofnon-payment

Administrativeburden

Costoffinancing

Lackofcredit

managementexpertiseLegalandregulatoryconsiderations

Diversificationof

customerbase

Expandproductsuite

Technological

advancements

Extendtonewsector

Outsourcingproductiontolower-costcountriesGreateraccess

tofinancing

56.8%

42.6%

41.3%

34.0%

30.5%

30.1%

16.5%

14.8%

12.1%

10.9%

5.2%

4.8%

providedbyEulerHermes.

Executive

summary

2023trade

situation

2023payment

trends

Riskmitigation

strategies

Trade

confidencelevel

2024business

outlookandpriorities

Opportunitiesin

e-commerce

Conclusion

Executive

summary

2023trade

situation

2023payment

trends

Riskmitigation

strategies

Trade

confidencelevel

2024business

outlookandpriorities

Opportunitiesin

e-commerce

Conclusion

APACCFOSURVEY2024

Lookingback:

2023paymenttrends

Offeringcredittermstocustomersisadouble-edgedsword.Ontheonehand,customerswhopurchasegoodsorservicesfromyourbusinessappreciatethattheyhaveawindow

—30,60or90days—fromthetimetheybuyfromyoutothetimetheypayyou.Ontheotherhand,theagreementtodeferpaymentcouldstarveyourbusinessofaccountsreceivablesifcustomersmisspaymentsornotpayatall.

Achokedcashpipelinebecomesdireparticularlyforsmallbusinesseswhichthenhavelittleornoliquiditytopayforoverheadssuchaswagesandrentals.OurstatisticsshowthatmoreSMEsandmid-sizedbusinessesexperienced

missedornon-paymentscomparedtoMNCs.

Understandably,SMEs—withtheirsmallerreservesand

greaterexposuretocreditrisks—offeredshortercredit

terms.Incontrast,majorityofthemid-sizedofferedupto60days,someextendingto90days.

Paymentcreditterms

Figure2.1highlightsthecredit-termwindowofferedby

businessesofdifferentsizes.Figure2.2showsthepaymentdelaysordefaultsthatthesebusinessesexperienced.

Further,Figure2.3capturesthecreditperiodsoffourkey

industrysectorsandthelevelofmissedandnon-paymentstheyfaced.

Paymentcredittermsofferedbybusinesssizes(Figure2.1):Enterprisesofallsizesofferedcredittermsrangingfrom

onetothreemonths.ButSMEsgavetheshortestterms(60daysorless),signallingthatthesesmallfirmsfacedgreaterconcernsovercashflow.Thatsaid,fewbusinessesacrossallsizesriskedcredittermsofmorethan90days.

•AmongSMEs,most(46%)offeredtermsof30-60days.Some(27%)wereabletogive60-90daycredit.

•Amongmid-sizedenterprises,most(55%)entrustedcustomerswithtermsof30-60days.Some(32%)wereconfidentenoughtooffer60-90daycredit.

•Asimilarpatternofcredittermsgivenbythemid-sizedenterpriseswasobservedamongMNCs.

However,accordingtotherecentAllianzTradeDSOreport,1in5companiesgloballypaytheirsuppliersonlyafter90days.InAPAC,21%ofthecompaniesarepaidafter90dayswithalmostallsectorsarehitbylongerpaymentterms.

Globalworkingcapitalrequirements(WCR)havealso

increasedforthethirdstraightyearto76dayswithAPACpostinganincreaseof2daysto81days.

Figure2.1:Credittermsofferedbydifferentbusinesssizes

SMEmmMid-sizedMNCmmMNC

60%

50%

40%

30%

20%

10%

0%

<30days30to<60days60to<90days90to<120days120daysormore

7AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

Executive

summary

2023trade

situation

2023payment

trends

Riskmitigation

strategies

Trade

confidencelevel

2024business

outlookandpriorities

Opportunitiesin

e-commerce

Overalllateandnon-payments(Figure2.2):Businessesofallsizessurveyedsaidthathalfofpaymentsduetothemwereeitherdelayedordefaultedinthepast12months.

Butthesmallerplayersboremoreofthisbrunt.Among

therespondents,thefigurewas20%forSMEsand19%formid-sizedcompaniescomparedto12%forMNCs.

Paymentcredittermsbysectors(Figure2.3):

Thesectorsbeinghighlightedare:

Automotive

ComputerandtelecomsElectronics

Software&ITservices

Ofthese,electronicscompaniesgavethelongestcreditwindow:60-90days.Theotherthreesectorsgave30-60dayterms.

Allenterpriseshadmorethanhalfoftheirinvoiceseitherpaidlateornotatall.

•Threesectorsfacedasimilarproportionofsuchdelaysordefaults:28.6%forbusinessesincomputerand

telecom,28.0%forthoseinsoftwareandIT,and23.8%inautomotives.

•Incontrast,only17.9%ofcompaniesinelectronicshadover50%oftheirreceivablesmissedorreneged.

Figure2.2:Paymentbehaviorexperiencedbydifferentbusinesssizes

Lessthan30%ofinvoiceswerepaidontime

Over80%ofinvoiceswerepaidontime

Abouthalfofinvoiceswerepaidontime

Nearly100%ofinvoiceswerepaidontime

15%

65%

19%

18%

60%

20%

3%

1%

2%

23%

62%

12%

MNCMid-sizedSME

APACCFOSURVEY2024

Figure2.3:Credittermsofferedbykeysectors

90to<120daysmm120daysormore

mm<30daysmm30to<60daysmm60to<90days

12%

27%

13%

47%

13%

2%

2%

6%

11%

33%

40%

12%

16%

41%

52%

38%

17%

49%

39%

3%

7%

20%

Conclusion

Electronics

Automotive

manufacturers

Automotivesuppliers

Computer&telecom

Software

&ITservices

8AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

APACCFOSURVEY2024

Executive

summary

Lookingback:

2023trade

situation

Riskmitigationstrategies

2023payment

trends

Mitigatingpaymentriskpost-Covidismadeallthemorechallengingbecausethecustomerwhowascreditworthyyesterdaymaynotbesolventtoday.Indeed,underour

businesstipsfor“TheFinanceLeaderofTomorrow:

Riskmitigation

ChallengesandOpportunities”,AllianzTradesoundedakeyalarm.Thatis:post-Covid,theriskofpaymentdelaysandpaymentincidentshaveheightenedwhile“confidenceindealingwithnon-payment”hastakenadive.

strategies

Butthepandemiccannotbearthesingularblameforallbaddebts,latepaymentsandunpaidinvoices.Suchday-to-daybusinesschallengesexistedbeforeCovidandwillcontinuetodosoinreinventedforms,dependingontheglobalissuesoftheday.

confidencelevel

Truthbetold,theonusisonbusinessestoconductrigorouscreditchecksbeforeanydealissealed.Oncesignatures

Trade

outlookandpriorities

areonthedottedlinebutthingsgoawry,promptcreditrecoveryisamust.Aimforthesweetspotincustomerriskmanagement.Thatis,theamicableintersectionbetweenrobustdebt-collectionandclientsensibilities.Putanotherway:howtogettothefriction-lessplacewhereproactivebutpoliteremindersarereceivedwithoutacrimony.

2024business

Tradecreditinsurance(TCI)isthesweetspotinmitigation-riskpractices.Itprotectsbusinessesagainsttherisksoflateornon-paymentsandhasmechanismstoensureasmoothdebtcollectionprocesstoboot.Withit,policyholdersknowthattheirbusinessisprotectedagainstbothcommercial

Opportunitiesin

e-commerce

Conclusion

andpoliticalrisksthatarebeyondtheircontrolandhavethereassurancethatmoneyowedtothemwillbepaid.

9AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

Executive

summary

10%

89%

2023trade

situation

2023payment

trends

Riskmitigation

strategies

APACCFOSURVEY2024

Riskmitigationmatters

Nearlyallbusinessessurveyedsaidtheyhadstrategies,includingTCIs,inplacetolessentheeffectsofpayment

failures(Figure3.1).Figure3.2highlightstheirbestrisk

mitigationpractices.However,Figure3.3showsthatwhilecompaniesbelievethatTCIhedgesagainstbaddebts,

convictionwasnotmatchedbyadoption.

Figure3.1showsthatacrossbusinessessurveyed(10%)countedTCIasariskmitigationstrategy.Some89%ofcompaniesalsohadotherbufferingstrategies.Only1%hadnostrategy.

Further,havingTCIpolicies—ornot—affectedhowconfidentlytheyfeltaboutbeingbufferedagainst

insolvenciesandnon-payments:

•Amongallresponses(67%)feltmorevulnerabletocreditrisks.

•ThosewithTCIs(71%)weremoreassuredofbusinesscontinuityingloomyscenarios.

Figure3.1:Typeofriskmitigationstrategies

OtherstrategiesTCINostrategy

1%

Figure3.2:Riskmitigationstrategiesinplaceagainstpaymentdefaults

Trade

Requestingadvancepaymentsordeposits

Conductingthoroughbackground

checksonpotentialcustomersApplyingatightercreditlimitonlesscreditworthycustomersMonitoringcustomersI

paymentbehaviors

TradecreditinsuranceUsingbankguarantees

Non-recoursefactoring

(sellinginvoicesatadiscount)

16.0%

15.2%

14.9%

10.7%

9.5%

7.5%

7.2%

Companieswhichwerealreadypreparedtotaketheedgeoffpaymentdefaults,bankedchieflyonthreestrategiesfordoingso.

confidencelevel

•Askingforadvancepaymentordeposits(16.0%)wasthechoiceriskmitigationstrategy.

•Duediligence—whetherconductingchecks

10AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

beforehand(15.2%)ortighteningcreditlimits(14.9%)weretheotherpreferredoptions.

2024business

outlookandpriorities

Opportunitiesin

e-commerce

Conclusion

WhetherSMEsormid-sizedcompaniesorMNCs,

enterprisesofallsizeswereconvincedthatriskmitigationstrategieswereessentialtoprotectionagainst

paymentdefaults.

Indeed,asFigure3.3shows,companiesfeltmoreassuredagainstthevagariesofbaddebtswithTCI.Butthein-

principleconvictionwasnotmatchedbyactualadoption.Inshort:morebusinesseshadyettoinvestinsuch

2023trade

situation

insurancepolicies.ThepositiveisthatTCIcanbemuch

harnessedasavaluableassetinthebusinessmarketplace.

APACCFOSURVEY2024

Executive

summary

Overalltotal:

67.3%71.4%

Figure3.3:RiskmitigationviaTCIbysectors

mmTradeconfidenceoverallTradeconfidencewithTCI

2023payment

trends

Agrifood

Automotivemanufacturers

Automotivesuppliers

Riskmitigation

Chemicals

strategies

Computer&telecom

Construction

Electronics

confidencelevel

Energy

Trade

Householdequipment

Machinery&equipment

Metals

Other

outlookandpriorities

Paper

2024business

Pharmaceuticals

Retail

Software&ITServices

Opportunitiesin

e-commerce

Textiles

Transportequipment

0%20%40%60%80%100%

Conclusion

11AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

Executive

summary

2023trade

situation

2023payment

trends

Riskmitigation

strategies

Trade

confidencelevel

2024business

outlookandpriorities

APACCFOSURVEY2024

Lookingforward:

Tradeconfidencelevel

HouthirebelattacksonvesselsintheRedSeainlate2023arejustthelatestblowtoaseriesofsetbacksforglobal

tradein2024.Theiranti-shipmissileattacksareforcingshipmentsofgoodsfromoilandgastotoysandfurnituretobypasstheSuezCanalforsafety,takingfarlonger

reroutes.Giventhatabout12%oftheworld’stradecargopassesthroughtheCanal,diversionswouldspellsupplydelaysandhighercosts.

Astradeexitsrecession,therecoverywillbelimitedbytheinventoryglut.Disruptionsinglobalshippingandprotectionismmeanthatthepaceofrecoveryis

capped,andglobaltradegrowthwillremainbelowitslong-termaverage.

Long-terminterestratesarepoisedforamodestdeclinein2024,whilethebullmarketinequitiescouldcontinue.

Geopolitics,risingdefensespending,reshoring,AIfrenzyandthegreentransitionwillcontinuetoshapemarket

sentiment.Theconcentrationingeographies,sectorsandcompanieswillmakemarketdynamicsvulnerable.TradetensionsbetweenUSandChina—theworld’stwolargesteconomies—andtheRussia-Ukrainewarasjusttwo

top-linechangeabilities.Addtothatpot,slowinggrowthinChina,withdownsidepressuresaboundandthechallengeforpolicymakersistoreestablishconfidenceandsupportnewgrowthdrivers,inordertoestablishasustainable–

12AllianzTradeisthetrademarkusedtodesignatearangeofservicesprovidedbyEulerHermes.

thoughslowing–economicmodelwillimpacttherestoftheworld.

Indeed,theoutlookforglobaltradeis“sobering”,said

theUnitedNationsinitsWorldEconomicSituationand

Prospects2024report.Itsaid:“Althoughglobaleconomicgrowthoutperformedexpectationsin2023withseveral

largeeconomiesshowingremarkableresilience,simmeringgeopoliticaltensionsandthegrowingintensityand

frequencyofextremeweathereventshaveincreasedunderlyingrisksandvulnerabilities.”

Thereportforecasts:“AdecelerationinglobalGDP

growth,fromanestimated2.7%in2023to2.4%in2024,signallingacontinuationofsluggishgrowthtrends.

Emergingmarketswillexperienceamoderaterecovery,thankstodomesticconsumerspendingandinvestment

activity.ExportswillbeagrowthdriveronlyforSoutheastAsiaandafewothernations.Resilienceisstillimpressiveaspolicyconstraintsabound.”

Recentelectionshavealsoconfirmedrisingpolarizationrisks.TheUS,India,Mexico,theEU,SouthAfricaandtheUKelectionswillallmatterintoday’suncertainworld.

Ifthereisasliverofhopeinthissoberingtradescene,it

isthis:businessesmaybedownbutnotout.FromSMEs

tomid-sizedcompaniestoMNCs,therearethosewhich

havepreparedfortradeturbulence.Askingfordepositsoradvancepaymentsoutright,andscrutinisingapotentialcustomer’screditworthinessortighteningcreditlimits

aresomeoftheirriskmitigationstrategies.Further,somebusinesseshavetradecreditinsurancetoweatherthemfromthepelterofpaymentdefaultsandinsolvencies.

Opportunitiesin

e-commerce

Conclusion

APACCFOSURVEY2024

Impactoftradecreditinsuranceonbusinessconfidence

Thetradeconfidencelevel(TCL)forbusinessesofallsizesisdirectlyimpactedbywhethertheyhavetradecredit

insurance—ornot.Figure4.1showstheoverallTCL

amongbusinessesofallsizes.Figures4.2and4.3reflectTCLamongSMEsandmid-sizedcompanies,respectively.Figures4.4and4.5showrespectivelythehighestand

lowesttradeconfidencelevels,respectively,bysectors.

AllianzTradedeepdatarevealedthat99%ofbusinessessurveyedhadriskmitigationstrategies.Yet,thetrade

confidencelevel(TCL)ofallsuchbusinesseswasjust

67.6%.Thatis,onlytwooutofthreecompaniesofall

sizesfeltconfidentenoughofbeingprotectedagainst

paymentdefaultsandinsolvencies.However,having

tradec