China Regulators Issue Notice on Automaker Supplier Payment Terms

The Ministry of Industry and Information Technology and the State Administration for Market Regulation issued the Notice on Promoting Automakers' Standardized Payment of Supplier Accounts and Optimizing Payment Period Management. In June 2025, 17 key automakers publicly pledged that payment periods would not exceed 60 days. Over the past year or more, the average payment period of key automakers has shortened and the proportion of cash payments has risen, improving the overall payment situation to a certain extent. Payment of accounts involves many stages, and the subsidiaries and branches of automakers differ considerably, so problems remain in the process of optimizing payment periods.

The problems include differing standards for when the payment period starts, such as delivery acceptance, centralized reconciliation, receipt of invoices, and vehicle-loading verification, resulting in differences in actual payment periods; unclear and lengthy acceptance conditions, which effectively extend payment periods; and payment methods that include cash as well as non-cash instruments such as bank acceptance bills, commercial acceptance bills, and supply chain notes. The notice provides regulatory guidance on clarifying when payment periods start, making acceptance work standardized and efficient, paying accounts in full and on time, ensuring compliant and convenient payment methods, making advance payments during price negotiations, and handling exceptional circumstances.

The notice sets requirements for payments to small and medium-sized enterprises, encouraging automakers to complete payment within 30 days and within 60 days at the longest; it encourages 100% cash payment and prohibits unjustified delays. Enterprises should establish and improve internal management systems and submit semi-annual and annual reports to competent authorities on time.

The notice calls for stronger cross-departmental coordinated supervision, the establishment of a regular supervision and inspection mechanism, and encouragement of enterprises to disclose payment period information; joint regulatory talks will be held with enterprises where problems are prominent, and illegal acts will be handled in accordance with laws and regulations. The Ministry of Industry and Information Technology, through government procurement of services, has commissioned third-party institutions to conduct annual research and assessments, with the assessment results made public; where there are objections to the assessment results, the third-party institution will conduct a review; where there are doubts about the assessment work, the ministry will organize verification and make the results public; and where it is verified that a third-party institution has engaged in fraud, illegal profit-seeking, or other such acts, it will be dealt with seriously in accordance with the law.

China's automotive industry has built the world's largest and most complete automotive industrial chain system, with deep linkages between upstream and downstream. The notice sets clear rules for automakers' payment of supplier accounts and payment period management.