China releases regulation on ensuring timely payments to SMEs

China's State Council on Tuesday released a regulation on ensuring timely payments to small and medium-sized enterprises (SMEs), according to a decree of the State Council signed by Premier Li Keqiang.

The regulation will go into effect on September 1.

Noting that SMEs provide significant support for expanding employment and improving people's livelihood, the State Council introduced the regulation to ensure that government departments, public institutions, and large enterprises pay SMEs on time to safeguard their legitimate rights and interests, and improve the business environment.

The regulation standardizes the contract signing between the aforementioned departments and SMEs, requiring them to pay for goods, projects, and services from SMEs on time.

It also prohibits them from extending the payment period.

The country will set up mechanisms for payment information disclosure, complaint handling, as well as supervision and evaluation, to better the business environment, according to the decree.