Beijing Mandates 60-Day Cash Payments from Large Enterprises to SMEs
Crhk · 2 SOURCESabout 2 hours ago2 MIN
Summary
China's State Council General Office has released a comprehensive directive to tackle the longstanding issue of large enterprises delaying payments to smaller suppliers, a practice that has strained SME cash flows across the country. The notification introduces ten specific measures across four key areas, with the most prominent being a mandatory 60-day cash payment requirement for large corporations. Ministry officials allege that some large enterprises, while competing aggressively on pricing in their markets, have been deliberately manipulating payment terms to extract financing benefits at the expense of smaller partners.
Key Points
- Large enterprises must settle SME payments within 60 days via cash or bank transfer, effective from date of delivery
- The Ministry of Industry and Information Technology alleged that some large firms exploit their market dominance by extending payment cycles to shift financing costs
- Regulators including the Ministry, People's Bank of China, and market regulator will jointly interview and sanction companies with large outstanding payables
- As of June 2026, inclusive micro-loan balances reached 38.5 trillion yuan, growing nearly 20% annually since 2020, indicating systemic financing gaps
- Maximum payment period for electronic invoices will be reduced to 6 months, and government procurement must use full cash payments
Why It Matters
The directive signals a significant escalation in Beijing's efforts to protect smaller businesses, moving from voluntary guidelines to mandatory enforcement mechanisms. For Hong Kong companies with supply chain ties to mainland enterprises, these regulations could accelerate payment cycles and reduce the risk of receivable defaults. The policy also signals stronger regulatory alignment between financial, industrial, and market oversight authorities in targeting systemic corporate misconduct.
The directive signals a significant escalation in Beijing's efforts to protect smaller businesses, moving from voluntary guidelines to mandatory enforcement mechanisms. For Hong Kong companies with supply chain ties to mainland enterprises, these regulations could accelerate payment cycles and reduce the risk of receivable defaults. The policy also signals stronger regulatory alignment between financial, industrial, and market oversight authorities in targeting systemic corporate misconduct.