The Regulations on Payment Protection for Small and Medium-sized Enterprises shall come into force on Sept 1, according to a decree of the State Council signed by Premier Li Keqiang.
Adopted at the State Council executive meeting on July 1, the regulation standardizes the contract signing and funds guarantee for better payment management.
Government departments, public institutions and large enterprises should not force SMEs to accept unreasonable payment periods, methods and liabilities for breaching the contract and other conditions.
The aforementioned departments should pay for goods, projects, and services of SMEs on time, as payment extension is prohibited according to the regulations.
The government will also set up mechanisms for payment information disclosure, complaint handling, as well as supervision and evaluation, to safeguard legitimate rights and interests of SMEs, and improve the business environment.
