Late payment has long been a persistent headache for small and medium-sized enterprises (SMEs). To address this, the State Council has recently issued a notice aimed at strengthening the governance of payment delays, urging leading companies to adopt a "60-day cash payment commitment" and intensifying oversight of large firms' payment practices. The policy also seeks to boost fund transmission efficiency and financial support, enabling large enterprises to use financing to replace accounts payable and release cash to upstream and downstream SMEs more promptly.

At a State Council Information Office briefing on September 14, Cao Yuanyuan, Director of the Financial Markets Department at the People's Bank of China (PBOC), said that for companies issuing bonds in the interbank market, the central bank will enhance disclosure requirements on accounts payable and continue to support firms in replacing these liabilities through loans or bond issuance. Companies that demonstrate a clear reduction in outstanding payables or significantly shorten payment cycles will be granted financing conveniences, such as preferential treatment in bond issuance.

In recent years, some large companies have leveraged their dominant market positions to delay payments to suppliers, aiming to reduce financial costs and gain a competitive edge. This practice not only undermines SME suppliers but also exacerbates "involution" and supply-demand imbalances at the macroeconomic level. Cao noted that public financial data shows some large enterprises hold substantial accounts payable while maintaining ample cash reserves, indicating they are fully capable of paying on time but choose not to do so.

From a macroeconomic perspective, Cao explained that when large firms expand interest-free liabilities like accounts payable, SMEs whose cash flow is squeezed are forced to borrow from banks. In effect, these SMEs bear the financing costs shifted onto them by larger corporations, creating structural mismatches that hinder the transmission of monetary policy. The new notice emphasizes close attention to large enterprises with high payable balances and strong cash positions.

The PBOC will intensify coordination with relevant authorities to tackle this issue, according to Cao. For companies issuing bonds in the interbank market, the central bank will strengthen disclosure of payable information and continue facilitating replacement of payables via loans and bonds. Firms that noticeably reduce payables or shorten payment periods will receive financing incentives in bond issuance and other areas.

To ease liquidity pressure on SMEs, the PBOC has been ramping up financing support, including implementing 25 measures for financial support of the private economy, enhancing financial service capabilities, utilizing structural monetary policy tools like rural and small-enterprise relending, and improving credit enhancement systems for private and SMEs. The central bank has also promoted the nationwide use of its unified动产 registration system and accounts receivable financing service platform to streamline confirmation and financing of SME receivables.

Cao stated that further efforts will be made to expand financing support for SMEs, including special actions for private and inclusive小微 enterprises, ensuring reasonable growth in loan volumes, steady improvement in loan quality, and stable interest rates and quality customer bases.

The scale of accounts receivable voucher business has dropped notably. These electronic vouchers, issued by core enterprises through electronic platforms, represent promises to pay within a set period and are used by banks to offer financing to suppliers. They feature split transferability and financing convenience, and their use had grown rapidly in recent years. The new notice calls for stricter regulation of such voucher services and enhanced oversight of the platforms that issue them.

Cao noted that at its peak, there were over 200 electronic voucher platforms nationwide, with outstanding voucher balances reaching 3 trillion yuan, impacting numerous core enterprises and their supply chains. However, early development lacked adequate regulation. Some core companies used vouchers to delay payments and stretch payment terms, while charging suppliers high financing fees for holding these vouchers, or even profiting by providing high-interest financing through affiliated factoring companies, effectively squeezing both ends.

In April last year, the PBOC and the National Financial Regulatory Administration jointly issued rules to regulate supply chain finance and better guide information service institutions in serving SME financing. Over the past year, the voucher business has contracted significantly. By the end of July, outstanding voucher balances stood at 2.4 trillion yuan, down 20% from over 3 trillion yuan before regulation.

Voucher terms have also shortened markedly. Under previous rules, payment periods were supposed to be within six months. The new notice further tightens this, restricting vouchers to a maximum of six months and requiring commercial banks to scrutinize the reasonableness of payment terms and exercise caution in financing such vouchers. By end-July, the average voucher term had shortened by 92 days compared with the same period last year before regulation.

The "two-ended squeezing" phenomenon has been effectively curbed, and some large enterprises involved have already exited the voucher business, Cao said. Platform standards are also improving. Under PBOC supervision, major electronic voucher platforms now display fee schedules transparently and have reduced service rates to 0.16%. They have strengthened risk controls by establishing mechanisms to collect trade background information and suspending voucher issuance to core enterprises with overdue defaults. So far, 145 platforms failing to meet compliance requirements have exited or pledged to exit the market.

Looking ahead, Cao emphasized that the central bank will continue to strictly control voucher terms, intensify oversight of electronic voucher platforms, and push core enterprises to pay in cash promptly. These measures aim to alleviate SME payment difficulties and support a smoother flow of the macroeconomic cycle.