New regulation to ensure timely payments to SMEs

The State Council, China’s Cabinet, recently released a regulation on ensuring timely payments to small and medium-sized enterprises, or SMEs, which will help improve the business environment, officials said.

The regulation -- called Regulations on Payment Protection for Small and Medium-sized Enterprises -- was made public on July 14. It standardizes the contract signing between SMEs and government departments and public institutions, as well as large companies, noting that SMEs should not be forced to accept unreasonable terms, officials added.

They noted that the regulation also introduced provisions in terms of payment deadlines, payment information disclosures and complaint handling -- stressing that the regulation will help boost the SME confidence in development.

The regulation will go into effect on Sept 1.