Li Qiang signed a State Council order, promulgating the "Regulations on Guaranteeing Payment of Funds to Small and Medium-Sized Enterprises"

Order of the State Council of the People's Republic of China

No. 802

The "Regulations on Ensuring the Payment of Funds to Small and Medium-sized Enterprises" have been revised and adopted at the 43rd executive meeting of the State Council on October 18, 2024, and are hereby promulgated and shall come into force on June 1, 2025.

Premier Li Qiang

March 17, 2025

Regulations on Ensuring the Payment of Funds to Small and Medium-sized Enterprises

(Promulgated by Order No. 728 of the State Council of the People's Republic of China on July 5, 2020; Amended by Order No. 802 of the State Council of the People's Republic of China on March 17, 2025)

Chapter 1  General Provisions

Article 1　For the purpose of promoting timely payment of funds to small and medium-sized enterprises by government organs, public institutions, and large enterprises, protecting the legitimate rights and interests of small and medium-sized enterprises, and optimizing the business environment, these Regulations are formulated in accordance with the Law of the People's Republic of China on the Promotion of Small and Medium-sized Enterprises and other laws.

Article 2　Government organs, public institutions, and large enterprises shall abide by these Regulations when paying funds to small and medium-sized enterprises for the procurement of goods, projects, and services.

Article 3　As used in these Regulations, "small and medium-sized enterprises" refer to enterprises legally established within the People's Republic of China and determined as medium-sized, small, and micro enterprises based on the standards for classifying small and medium-sized enterprises approved by the State Council; "large enterprises" refer to enterprises other than small and medium-sized enterprises.
The enterprise size type at the time of contract signing shall be determined by small and medium-sized enterprises and large enterprises. When signing contracts with government organs, public institutions, and large enterprises, small and medium-sized enterprises shall proactively inform them that they are small and medium-sized enterprises.

Article 4　The work of ensuring the payment of funds to small and medium-sized enterprises shall implement the Party's and the state's guidelines, policies, decisions, and deployments, adhere to the principle of payment entity responsibility, industry self-discipline, government legal supervision, and social collaborative supervision, and prevent and govern the problem of overdue payments to small and medium-sized enterprises in accordance with the law.

Article 5　The department of the State Council responsible for the comprehensive management of the work of promoting small and medium-sized enterprises shall conduct comprehensive coordination and supervision and inspection of the work of ensuring the payment of funds to small and medium-sized enterprises. Relevant departments of the State Council, such as development and reform, finance, housing and urban-rural construction, transportation, water conservancy, financial regulation, state-owned assets supervision, and market supervision and administration, shall be responsible for the relevant work of ensuring the payment of funds to small and medium-sized enterprises in accordance with their respective responsibilities.
The people's governments of provinces, autonomous regions, and municipalities directly under the Central Government shall assume overall responsibility for the work of ensuring the payment of funds to small and medium-sized enterprises within their respective administrative regions, strengthen organizational leadership and coordination, and improve institutional mechanisms. The people's governments at or above the county level shall be responsible for the management work of ensuring the payment of funds to small and medium-sized enterprises within their respective administrative regions.

The departments of the people's governments at or above the county level responsible for the comprehensive management of the work of promoting small and medium-sized enterprises and the relevant departments of development and reform, finance, housing and urban-rural construction, transportation, water conservancy, financial regulation, state-owned assets supervision, and market supervision and administration shall be responsible for the relevant work of ensuring the payment of funds to small and medium-sized enterprises in accordance with their respective responsibilities.

Article 6　Relevant industry associations and chambers of commerce shall, in accordance with laws, regulations, and organizational charters, strengthen industry self-discipline management, standardize and guide large enterprises in their industry to fulfill their obligations to pay funds to small and medium-sized enterprises in a timely manner, not to use their dominant position to owe funds to small and medium-sized enterprises, and provide information consulting, rights protection, and dispute resolution services to small and medium-sized enterprises, protecting the legitimate rights and interests of small and medium-sized enterprises.
Large enterprises are encouraged to publicly pledge the payment terms and methods for procuring goods, projects, and services from small and medium-sized enterprises.

Article 7　Government organs, public institutions, and large enterprises shall not require small and medium-sized enterprises to accept unreasonable payment terms, methods, conditions, and breach of contract liabilities, and shall not owe funds to small and medium-sized enterprises for goods, projects, and services.
Small and medium-sized enterprises shall operate lawfully, be honest and trustworthy, and provide qualified goods, projects, and services in accordance with the contract.

Chapter 2 Provisions on Payment of Funds

Article 8　Government organs and public institutions using fiscal funds to procure goods, projects, and services from small and medium-sized enterprises shall strictly implement the approved budget and shall not conduct procurement without a budget or exceeding the budget.
Funds for government investment projects shall be ensured in place in accordance with relevant national regulations, and construction shall not be financed by the construction unit.

Article 9　Government organs and public institutions procuring goods, projects, and services from small and medium-sized enterprises shall pay the funds within 30 days from the date of delivery of the goods, projects, or services; if otherwise agreed in the contract, such agreement shall prevail, but the payment term shall not exceed 60 days at most.
Large enterprises procuring goods, projects, and services from small and medium-sized enterprises shall pay the funds within 60 days from the date of delivery of the goods, projects, or services; if otherwise agreed in the contract, such agreement shall prevail, but the payment term shall be reasonably agreed upon in accordance with industry standards and transaction habits and paid in a timely manner; it shall not be agreed that the receipt of payment from a third party shall be a condition for payment to small and medium-sized enterprises or payment to small and medium-sized enterprises shall be made proportionally to the payment progress of the third party. If laws, administrative regulations, or relevant national regulations provide otherwise for the payment terms in the first and second paragraphs of this Article, such provisions shall prevail. If the contract stipulates the settlement methods such as progress payment settlement and regular settlement, the payment term shall be calculated from the date on which both parties Confirm the settlement amount.

Article 10　If government organs, public institutions, and large enterprises agree with small and medium-sized enterprises that the payment of funds to small and medium-sized enterprises shall be made upon the completion of inspection or acceptance of goods, projects, or services after delivery, the payment term shall be calculated from the date of completion of inspection or acceptance.
Both parties to the contract shall specify a clear and reasonable inspection or acceptance period in the contract, and complete the inspection or acceptance within such period; if laws, administrative regulations, or relevant national regulations stipulate otherwise for the inspection or acceptance period, such provisions shall prevail. If government organs, public institutions, and large enterprises delay the inspection or acceptance, the payment term shall be calculated from the expiration of the agreed inspection or acceptance period.

Article 11If government organs, public institutions, and large enterprises use commercial bills, electronic receipts for accounts receivable, or other non-cash payment methods to pay funds to small and medium-sized enterprises, they shall make clear and reasonable agreements in the contract, shall not force small and medium-sized enterprises to accept commercial bills, electronic receipts for accounts receivable, or other non-cash payment methods, and shall not use commercial bills, electronic receipts for accounts receivable, or other non-cash payment methods to indirectly extend the payment period.

Article 12　Government organs, public institutions, and state-owned large enterprises shall not forcibly require the audit results of the audit institution as the basis for settlement, except as otherwise provided by laws and administrative regulations.

Article 13　Except for legally established bid bonds, performance bonds, project quality warranty bonds, and migrant worker wage bonds, no other bonds may be collected in the course of engineering construction. The collection ratio and methods of bonds shall comply with laws, administrative regulations, and relevant national provisions. Government agencies, public institutions, and large enterprises shall not limit bonds to cash. For small and medium-sized enterprises that provide guarantees with letters of guarantee issued by financial institutions, government agencies, public institutions, and large enterprises shall accept them. Government agencies, public institutions, and large enterprises shall, in accordance with the law or contract agreements, promptly settle accounts with small and medium-sized enterprises for the collected bonds and return them after the guarantee period expires.

Article 14　Government agencies, public institutions, and large enterprises shall not refuse or delay payment to small and medium-sized enterprises on the grounds of changes in legal representatives or major responsible persons, internal payment procedures, or waiting for project completion acceptance and filing, final account audits, etc., when not stipulated in the contract.

Article 15　In transactions between government agencies, public institutions, and large enterprises and small and medium-sized enterprises, if there are disputes in some parts but do not affect the performance of other parts, the timely payment obligation for the undisputed parts shall be fulfilled.

Article 16　Encourage, guide, and support commercial banks and other financial institutions to increase credit to small and medium-sized enterprises, reduce the comprehensive financing costs of small and medium-sized enterprises, and provide convenience for small and medium-sized enterprises to use accounts receivable, intellectual property rights, government procurement contracts, inventory, machinery and equipment, etc., as collateral for financing.

For small and medium-sized enterprises financing with accounts receivable, government agencies, public institutions, and large enterprises shall Confirm the creditor-debtor relationship within 30 days from the date when the small and medium-sized enterprises submit a request for confirmation of rights, supporting the financing of small and medium-sized enterprises.

Article 17　Government agencies, public institutions, and large enterprises that delay payment to small and medium-sized enterprises shall pay overdue interest. If the parties have agreed on the interest rate for overdue interest, the agreed interest rate shall not be lower than the one-year loan market quotation rate at the time of contract signing; if no agreement is made, overdue interest shall be paid at a daily rate of five thousandths of a percent.

Article 18　Government agencies and public institutions shall publicly disclose information such as the number and amount of contracts for overdue payments to small and medium-sized enterprises in the previous year through websites, newspapers, and other means that are easily accessible to the public before March 31 each year.

Large enterprises shall include information such as the number and amount of contracts for overdue payments to small and medium-sized enterprises in their annual reports and publicly disclose them to the public through the national enterprise credit information publicity system in accordance with the law.

Article 19　Large enterprises shall incorporate the work of ensuring payment to small and medium-sized enterprises into their enterprise risk control and compliance management system, and urge their wholly-owned or controlled subsidiaries to pay small and medium-sized enterprises in a timely manner.

Article 20　Government agencies, public institutions, and large enterprises and their staff shall not intimidate or retaliate against small and medium-sized enterprises and their staff who request payment or file complaints in any form.

Chapter 3 Supervision and Management

Article 21　County-level and above people's governments and their relevant departments shall increase the efforts to clean up arrears owed to small and medium-sized enterprises by government agencies, public institutions, and large enterprises through supervision and inspection, inquiries and interviews, supervisory notices, and complaint handling.

Article 22　County-level and above local people's government departments shall regularly report the situation of overdue payments to small and medium-sized enterprises in the previous year to the people's government at their level according to procedures. Public institutions and large state-owned enterprises shall regularly report the situation of overdue payments to small and medium-sized enterprises in the previous year to their competent departments or regulatory departments according to procedures.

County-level and above local people's governments shall regularly listen to reports on the work of ensuring payment to small and medium-sized enterprises within their administrative regions, strengthen supervision and guidance, and study and resolve prominent issues.

Article 23　Provincial-level and above people's governments shall establish a supervision and inspection system to supervise and inspect the work of ensuring payment to small and medium-sized enterprises, and conduct interviews with the main responsible persons of departments and local people's governments that fail to implement policies or make insufficient progress in their work.

County-level and above people's governments responsible for the comprehensive management of small and medium-sized enterprise promotion work may conduct inquiries and interviews with government agencies, public institutions, and large enterprises that owe payments to small and medium-sized enterprises; for serious cases, they may issue supervisory notices; if necessary, they may conduct joint work with the superior authorities, industry competent departments, and regulatory departments of the owing units.

Article 24　Provincial-level and above people's governments responsible for the comprehensive management of small and medium-sized enterprise promotion work (hereinafter referred to as complaint receiving departments) shall establish convenient and smooth channels to receive complaints about arrears owed to small and medium-sized enterprises by government agencies, public institutions, and large enterprises.
The State Council department responsible for the comprehensive management of small and medium-sized enterprise promotion work shall establish a national unified complaint platform for arrears owed to small and medium-sized enterprises, strengthen the construction of complaint handling mechanisms, and share information and cooperate with relevant departments and local people's governments.

Article 25　Complaint receiving departments shall, in accordance with the principle of "local management, hierarchical responsibility, whoever is in charge is responsible, whoever supervises is responsible", transfer the complaints to the relevant departments or departments designated by the local people's government (hereinafter referred to as complaint handling departments) for handling according to procedures within 10 working days from the date of formal acceptance.

Complaint handling departments shall form a handling result within 30 days from the date of receiving the complaint materials, and provide feedback to the complainant in writing and to the complaint receiving department. In cases of complex circumstances or other special reasons, with the approval of the department head, the handling period may be appropriately extended, but the maximum handling period shall not exceed 90 days.

The respondent shall cooperate with the complaint handling department. The complaint handling department shall urge the respondent to provide timely feedback. If the respondent fails to provide timely feedback or fails to provide feedback as required, the complaint handling department shall issue a supervisory letter; if the respondent still refuses to cooperate after receiving the supervisory letter, the complaint handling department may conduct interviews and issue notices to the respondent and order rectification.

The complainant shall have a contractual relationship with the respondent and shall not make false or malicious complaints.

The staff of the complaint receiving department and the complaint handling department shall bear the obligation of confidentiality for state secrets, trade secrets, and personal information learned in the performance of their duties.

Article 26　If government agencies, public institutions, and large enterprises are legally and procedurally determined to be dishonest for owing payments to small and medium-sized enterprises, the complaint receiving department and relevant departments shall, according to procedures, include the relevant dishonest information in the credit records of the relevant entities. For serious cases or cases that cause serious adverse social impacts, the relevant information shall be included in the national credit information sharing platform and the national enterprise credit information publicity system and publicly disclosed to the society; necessary restrictions shall be imposed on government agencies in terms of official consumption, office buildings, and budget arrangements; and large enterprises shall be restricted in accordance with the law and regulations in terms of financial support, investment project approval, financing acquisition, market access, qualification assessment, and commendation and awards.

Article 27　Auditing authorities shall conduct audit supervision over the payment of funds to small and medium-sized enterprises (SMEs) by government agencies, public institutions, and large state-owned enterprises in accordance with the law.

Article 28　When the state conducts assessments of the development environment for SMEs and evaluations of the business environment in accordance with the law, it shall include the situation of guaranteeing the payment of funds to SMEs in the assessment and evaluation content.

Article 29　The department of the State Council responsible for the comprehensive management of SME promotion work, based on the SME classification standards approved by the State Council, shall establish an enterprise size type testing platform to provide self-testing services for SME size types.

In case of disputes over the SME size type, an application for confirmation may be submitted to the department in charge of the comprehensive management of SME promotion work of the county-level or above local people's government where the party claiming to be an SME is located. Relevant departments such as HR, market supervision and administration, and statistics shall provide necessary assistance at the request of the confirming department.

Article 30　The state encourages legal service institutions to provide public interest legal services to SMEs that have payment disputes with government agencies, public institutions, and large enterprises.
News media should conduct public interest publicity on relevant laws, regulations, and policies concerning the guarantee of payments to SMEs, and strengthen the supervision of the public opinion on the behavior of government agencies, public institutions, and large enterprises in arrears of payments to SMEs in accordance with the law.

Chapter 4 Legal Liability

Article 31　Government agencies and public institutions that violate this Regulation and fall under any of the following circumstances shall be ordered by their superior authorities or competent departments to rectify; if they refuse to rectify, the leading personnel and directly responsible personnel shall be given disciplinary actions according to the law:

(1) Failure to pay the funds for goods, projects, and services to SMEs within the prescribed time limit;

(2) Delaying inspection and acceptance;

(3) Forcing SMEs to accept non-cash payment methods such as commercial bills and electronic vouchers for accounts receivable, or using non-cash payment methods such as commercial bills and electronic vouchers for accounts receivable to indirectly extend the payment period;

(4) Requiring the audit results of the auditing authorities as the basis for settlement without legal or administrative regulations;

(5) Illegally collecting security deposits, refusing to accept guarantees provided by SMEs through letters of guarantee issued by financial institutions, or failing to timely calculate and return security deposits to SMEs;

(6) Refusing or delaying payment to SMEs on the grounds of changes in the legal representative or main person in charge, implementation of internal payment procedures, or waiting for completion acceptance records and final account audits without contractual agreement;

(7) Failure to disclose information on overdue unpaid funds to SMEs in accordance with regulations.

Article 32　Government agencies and public institutions that fall under any of the following circumstances shall have their liabilities investigated and pursued according to law:

(1) Using fiscal funds to purchase goods, projects, and services from SMEs without implementing the approved budget;

(2) Requiring construction units to advance funds for government-funded projects.

Article 33　For large state-owned enterprises that owe SMEs funds, causing adverse consequences or impacts, the state-owned enterprise management personnel responsible shall be given disciplinary actions according to the law.
If large state-owned enterprises, without legal or administrative regulations, require the audit results of the auditing authorities as the basis for settlement, their supervisory departments shall order them to rectify; if they refuse to rectify, the state-owned enterprise management personnel responsible shall be given disciplinary actions according to the law.

Article 34　Large enterprises that violate this Regulation, fail to publicly disclose information on overdue unpaid funds to SMEs in their annual reports in accordance with regulations, or conceal the true situation or forge documents, shall be dealt with according to law by the market supervision and administration department.

Article 35　Government agencies, public institutions, and large enterprises and their staff who intimidate or retaliate against SMEs and their staff who request payment or lodge complaints, or who engage in other acts of abuse of power, dereliction of duty, or favoritism and malpractice, shall have the leading personnel and directly responsible personnel given disciplinary actions or punishments according to law; if a crime is constituted, criminal liability shall be investigated according to law.

Chapter 5 Supplementary Provisions

Article 36　Group organizations that use all or part of fiscal funds to purchase goods, projects, and services shall refer to the relevant provisions of this Regulation for government agencies and public institutions for the payment of funds to SMEs.
The payment of funds to SMEs for the purchase of goods, projects, and services by the military shall be implemented in accordance with the relevant provisions of the military.

Article 37　This Regulation shall come into force on June 1, 2025.