China Market Regulator Warns Big Firms Over Delayed Payments to SMEs

China's State Administration for Market Regulation (SAMR) is stepping up enforcement against large enterprises that delay payments to small and medium-sized suppliers. Speaking at a State Council policy briefing, credit supervision official Zhou Weijun announced that authorities will enforce Article 15 of the revised Anti-Unfair Competition Law. Regulators are coordinating with the Ministry of Industry and Information Technology and the central bank to monitor payment cycles, while conducting field research and issuing warnings to key industries, including leading automotive manufacturers.

Prolonged payment delays directly choke liquidity for smaller vendors upstream, threatening the stability and operational survival of industrial supply chains. By classifying payment delays under unfair competition enforcement rather than purely private contract disputes, regulators are equipping themselves with administrative levers to penalize systemic payment deferrals by dominant buyers.

China's market regulators are expanding scrutiny over large corporations that withhold or delay payments to small and medium-sized enterprises (SMEs), using competition law to stabilize industrial supply chains. Speaking at a State Council Information Office policy briefing, Zhou Weijun, director of the Credit Supervision Department at the State Administration for Market Regulation (SAMR), said the agency will strictly crack down on large enterprises that abuse their advantageous market position to withhold payments. Zhou noted that amid intensifying market competition, some dominant corporations have leveraged their capital, technical, and distribution strengths to shift operational costs onto smaller vendors, delaying payments across goods, engineering, and service contracts. To address this issue, regulatory authorities are relying on Article 15 of the revised Anti-Unfair Competition Law, which took effect in October last year. The provision specifically defines and prohibits large enterprises from abusing an advantageous position to delay payables to SMEs. According to Zhou, enforcing this provision is intended to protect the fundamental operating conditions of smaller businesses while steering larger enterprises toward healthier competitive practices. SAMR plans to build a collaborative regulatory mechanism in tandem with the Ministry of Industry and Information Technology (MIIT) and the People's Bank of China (PBOC). The inter-agency framework will facilitate regular communication and information sharing. Authorities intend to deploy formal regulatory talks and mediation to urge corporate rectification where prolonged payment terms and complaint volumes are concentrated. Regulators are particularly focused on evasive payment practices, including blurring payment milestone dates, stalling inspection and acceptance procedures, and using commercial acceptance drafts to covertly stretch payment periods. Zhou emphasized that cases involving substantiated malicious delays will face strict legal penalties in accordance with established sectoral payment guidelines. Alongside the policy briefing, SAMR has initiated research visits to leading enterprises in the automotive sector, delivering regulatory guidance and urging dominant automakers to avoid abusing advantageous market positions at the expense of their supply chains.