Order No. 802 of the State Council: Announcement of the Revised Measures for the Protection of Payments to Medium and Small Enterprises
The State Council issued Order No. 802 on March 17, 2025, announcing the revised Measures for the Protection of Payments to Medium and Small Enterprises, effective from June 1, 2025. The measures consist of five chapters and 37 articles, with the main revisions as follows:
First, clarify responsibilities. Specifically, define the duties of national and local departments responsible for comprehensive management of promoting medium and small enterprise development, including those in sectors such as reform, finance, housing, rural construction, and others, regarding their roles in ensuring timely payments to medium and small enterprises.
Second, strengthen payment obligations. Clearly stipulate payment deadlines for government agencies, public institutions, and large enterprises when paying medium and small enterprises,increase the requirement that large enterprises must pay within 60 days from the date of goods delivery, project completion, or service provisionwithin 60 daysfor internal payment.
Third, improve supervision and reporting mechanisms. Add provisions requiring county-level or higher people's governments and relevant departments to conduct supervision through inspections, consultations, reporting, and handling reports to enhance efforts in clearing up and eliminating harassment of medium and small enterprises.
Fourth, increase penalties for violations. For large enterprises that harass medium and small enterprises resulting in adverse consequences or damage, as well as acts by government agencies, public institutions, large enterprises, and their staff involving retaliation, abuse of power, or neglect of duty, legal responsibilities shall be fully enforced.
The full text of the measures is as follows.
The Measures for the Protection of Payments to Medium and Small Enterprises has been reviewed and passed at the 43rd regular meeting of the State Council on October 18, 2024, and is hereby announced to take effect from June 1, 2025.
Chairman Li Qiang
March 17, 2025
Measures for the Protection of Payments to Medium and Small Enterprises
(Issued by the State Council Order No. 728 on July 5, 2020; revised by the State Council Order No. 802 on March 17, 2025)
Chapter One General Provisions
Article 1 To promote timely payments by government agencies, public institutions, and large enterprises to medium and small enterprises, protect the legitimate rights and interests of medium and small enterprises, optimize the business environment, and based on laws such as the Law of the People’s Republic of China on Promoting the Development of Medium and Small Enterprises, these measures are formulated.Article 2 Government agencies, public institutions, and large enterprises purchasing goods, projects, or services from medium and small enterprises shall abide by these measures.In these measures, 'medium and small enterprises' refer to medium-sized, small, and micro-enterprises legally established within the territory of the People’s Republic of China, identified according to the national standards for classification of medium and small enterprises approved by the State Council; 'large enterprises' refer to enterprises other than medium and small enterprises.Medium and small enterprises and large enterprises shall determine their status based on enterprise scale types jointly established during contract signing. When a medium and small enterprise signs a contract with a government agency, public institution, or large enterprise, it shall actively inform the counterpart of its status as a medium and small enterprise.Article 4Payments to medium and small enterprises shall be carried out in accordance with the Party and state guidelines, policies, and decisions, adhering to the principles of primary responsibility, industry self-regulation, government law-based supervision, and social co-supervision, and preventing and addressing issues of harassment of medium and small enterprises in a lawful manner.Article 5 Departments under the State Council responsible for comprehensive management of promoting medium and small enterprise development shall coordinate and supervise payment work related to medium and small enterprises. Relevant departments under the State Council responsible for reform, finance, housing, rural construction, transportation, water resources, financial regulation, state asset supervision, market supervision, etc., shall perform their respective duties to ensure compliance with payment responsibilities related to medium and small enterprises.Provincial, autonomous regional, and municipal people's governments shall bear overall responsibility for payment work related to medium and small enterprises within their administrative regions, strengthening organizational leadership, unified coordination, and system building. County-level or higher local people's governments shall be responsible for managing payment work related to medium and small enterprises within their administrative regions.County-level or higher local people's governments and relevant departments responsible for comprehensive management of promoting medium and small enterprise development, as well as those responsible for reform, finance, housing, rural construction, transportation, water resources, financial regulation, state asset supervision, market supervision, etc., shall fulfill their duties according to their respective responsibilities to ensure compliance with payment responsibilities related to medium and small enterprises.Article 6 Industry associations and chambers of commerce shall, in accordance with laws, regulations, and bylaws, strengthen industry self-regulation, standardize guidance for large enterprises in fulfilling their payment obligations and timely payment to medium and small enterprises, prohibiting the use of advantageous positions to harass medium and small enterprises. They shall provide services such as information consultation, rights protection, and dispute resolution to safeguard the legal rights and interests of medium and small enterprises.Large enterprises shall publicly disclose their payment terms and methods for purchasing goods, projects, or services from medium and small enterprises.Article 7 Government agencies, public institutions, and large enterprises shall not impose unreasonable payment terms, methods, conditions, or contractual liabilities on medium and small enterprises, nor shall they delay or obstruct payments for goods, projects, or services provided by medium and small enterprises.Medium and small enterprises shall operate in compliance with the law, maintain good faith, and provide qualified goods, projects, and services in accordance with contract agreements.
Chapter Two Payment Regulations
Article 8 When government agencies and public institutions use fiscal funds to purchase goods, projects, or services from medium and small enterprises, they must strictly follow approved budgets and shall not conduct purchases without prior budgeting or beyond budget limits.Funds required for government investment projects must be secured in place according to national regulations and shall not be funded through construction by the executing units.Article 9 When government agencies and public institutions purchase goods, projects, or services from medium and small enterprises, they shall make payments within 30 days from the date of delivery of goods, completion of projects, or provision of services; if otherwise agreed in the contract, the agreement shall prevail, but the maximum payment period shall not exceed 60 days.When large enterprises purchase goods, projects, or services from medium and small enterprises, they shall make payments within 60 days from the date of delivery of goods, completion of projects, or provision of services; if otherwise agreed in the contract, the agreement shall prevail, but the payment term shall comply with industry standards, reasonable commercial practices, and timely payment requirements, and shall not condition payment on third-party settlement or base payment on third-party settlement ratios.If laws, regulations, or national rules provide otherwise for the first or second payment terms, the provisions shall apply accordingly.For contracts specifying milestone payments, periodic settlements, or other settlement methods, the payment term shall commence from the date both parties confirm the settlement amount.Article 10 When government agencies, public institutions, and large enterprises enter into contracts with medium and small enterprises to pay after delivery of goods, completion of projects, or provision of services, the payment term shall start from the date of inspection or acceptance of goods, projects, or services as compliant.Both parties shall agree on clear and reasonable inspection or acceptance periods in the contract and complete the inspection or acceptance within such periods. If laws, regulations, or national rules provide otherwise for inspection or acceptance periods, the provisions shall apply. If government agencies, public institutions, or large enterprises delay inspection or acceptance, the payment term shall start from the expiration of the agreed inspection or acceptance period.Article 11 When government agencies, public institutions, and large enterprises use commercial bills, electronic receivables notes, or other non-cash payment methods to pay medium and small enterprises, they must clearly and reasonably specify the terms in the contract. They shall not force medium and small enterprises to accept commercial bills, electronic receivables notes, or other non-cash payment methods, nor shall they extend payment terms by using such payment methods.Article 12 Government agencies, public institutions, and large enterprises shall not require audit results from auditing institutions as the basis for settlement unless otherwise specified by laws, regulations, or national rules.Article 13 Except for bid guarantees, performance bonds, quality assurance bonds, and worker wage guarantee deposits established by law, no other types of deposit shall be collected during project construction. The collection ratio and method of deposits shall comply with laws, regulations, and national rules.Government agencies, public institutions, and large enterprises shall not designate deposits as cash. Medium and small enterprises providing guarantees through financial institutions shall be accepted by government agencies, public institutions, and large enterprises.Government agencies, public institutions, and large enterprises shall, in accordance with the law or contract agreements, promptly reconcile and refund any deposits collected from medium and small enterprises upon expiration of the guarantee period.Article 14 Government agencies, public institutions, and large enterprises shall not alter legal representatives or principal responsible persons, conduct internal payment procedures, or unilaterally refuse or delay payment to medium and small enterprises in cases where no agreement has been made in the contract, based on pending claims, project settlement documents, or similar reasons.Article 15 Transactions between government agencies, public institutions, and large enterprises with medium and small enterprises may involve disputes in part but not affect the performance of other parts. In such cases, the undisputed parts shall be performed and paid in a timely manner.Financial institutions such as banks, credit unions, and financing guarantee companies should increase lending support to medium and small enterprises, reduce their comprehensive financing costs, and provide convenient financing for medium and small enterprises seeking to secure accounts receivable, intellectual property, government procurement contracts, warehousing, equipment, and other assets as collateral.When medium and small enterprises seek financing based on accounts receivable, government agencies, public institutions, and large enterprises shall acknowledge the request within 30 days from the date of the application and support the financing.Article 17 When government agencies, public institutions, and large enterprises delay payments to medium and small enterprises, they shall pay overdue interest. If the interest rate is agreed upon, the agreed rate shall not be lower than the one-year loan prime rate (LPR) quoted at the time the contract was signed. If no rate is agreed upon, the daily interest rate shall be calculated at five ten-thousandths per day. Government agencies and public institutions shall disclose, before March 31 each year, the number of contracts and total amounts of unpaid payments to medium and small enterprises from the previous year through websites, newspapers, or other public channels.Large enterprises shall include the number of contracts and total amounts of unpaid payments to medium and small enterprises from the previous year in their annual reports and disclose this information through the national enterprise credit information disclosure system to the public.Article 19
Large enterprises shall report their progress in implementing the payment protection work, incorporate it into their risk control and compliance management systems, and urge their wholly-owned or controlling subsidiaries to make timely payments to medium and small enterprises.
Government agencies, public institutions, large enterprises, and their staff members shall not harass, retaliate against, or intimidate medium and small enterprises or their employees who have made payment requests or filed complaints.Chapter Three Supervision and Management County-level or higher people's governments and relevant departments shall strengthen supervision through inspections, consultations, reporting, and handling complaints to enhance efforts in clearing up harassment of medium and small enterprises by government agencies, public institutions, and large enterprises. County-level or higher local people's governments and their relevant departments shall report annually to their respective people's governments on the status of overdue payments to medium and small enterprises from the previous year. Public institutions and large enterprises shall report annually to their competent authorities or supervisory departments on the status of overdue payments to medium and small enterprises from the previous year.County-level or higher local people's governments shall listen to annual reports on payment work related to medium and small enterprises within their administrative regions, strengthen guidance, and study solutions to sudden problems.Provincial-level or higher people's governments shall establish inspection mechanisms to supervise payment work related to medium and small enterprises. For departments and local governments failing to implement policies effectively or advancing work inadequately, they shall initiate consultations. For serious cases, they shall report to higher authorities.County-level or higher people's governments responsible for comprehensive management of promoting medium and small enterprise development may conduct consultations with government agencies, public institutions, and large enterprises found to be harassing medium and small enterprises. In serious cases, they may report to higher authorities and collaborate with relevant departments for joint action.Provincial-level or higher people's governments responsible for comprehensive management of promoting medium and small enterprise development (hereinafter referred to as 'receiving complaint departments') shall establish convenient and accessible channels for reporting harassment of medium and small enterprises by government agencies, public institutions, and large enterprises.The State Council department responsible for comprehensive management of promoting medium and small enterprise development shall establish a national unified platform for reporting harassment of medium and small enterprises, strengthen institutional construction for handling complaints, and share information with relevant departments and local governments.Receiving complaint departments shall handle reports in accordance with the principles of territorial management, graded responsibility, primary responsibility, and primary supervision. From the date of formal receipt, they shall process the report within 10 working days according to procedures and transfer it to the relevant department or local government (hereinafter referred to as 'handling departments').Handling departments shall complete the processing results within 30 days from the date of receiving the report, respond in writing to the complainant, and reply to the receiving department. For complex cases or special circumstances, with approval from the head of the department, the deadline may be extended appropriately, but the maximum extension shall not exceed 90 days.Respondents shall cooperate with the work of the handling department. Handling departments shall guide respondents and promptly respond to their feedback. If the respondent fails to respond in a timely manner or refuses to cooperate despite being urged to do so, the handling department shall issue a notice of urging; if the notice is still ignored, the handling department may negotiate or report to the respondent and order rectification.Complainants shall not fabricate facts or maliciously report. They must have a genuine relationship with the respondent.Staff members of receiving and handling complaint departments shall keep confidential any state secrets, trade secrets, and personal information obtained during the performance of their duties.Government agencies, public institutions, and large enterprises found to have harassed medium and small enterprises in violation of laws and regulations shall be recorded in relevant subject credit records. For serious cases or those causing significant negative social impact, relevant information shall be entered into the national credit information sharing platform and the national enterprise credit information disclosure system for public disclosure. Government agencies and public institutions shall take necessary restrictions in official expenses, office space allocation, and other areas. Large enterprises shall face legal restrictions in financial support, project approval, financing access, market entry, asset evaluation, and excellence awards.
Auditing institutions shall conduct audits and supervision on payment activities of government agencies, public institutions, and large enterprises to medium and small enterprises in accordance with the law.When conducting assessments and evaluations of the business environment and enterprise development environment at the national level, relevant departments shall include the status of payment work related to medium and small enterprises in the assessment content.Departments under the State Council responsible for comprehensive management of promoting medium and small enterprise development shall establish enterprise scale type testing platforms based on the national standards for classifying medium and small enterprises, and provide self-testing services for enterprise scale types.For enterprise scale types involving disputes, applications for recognition may be submitted to the competent departments under county-level or higher local people's governments responsible for comprehensive management of promoting medium and small enterprise development in the region where the enterprise is located. Departments responsible for human resources and social security, market supervision, statistics, and other relevant sectors shall provide necessary assistance upon request.Chapter Four Legal LiabilityArticle 31Government agencies, public institutions, and large enterprises violating these measures in any of the following ways shall be ordered to correct their behavior by their superior agencies or competent departments; if they refuse to correct, responsible leaders and direct personnel shall be disciplined in accordance with the law:(1) Failure to make payments within the prescribed period for goods, projects, or services provided by medium and small enterprises;(2) Delaying inspection or acceptance;(3) Forcing medium and small enterprises to accept commercial bills, electronic receivables notes, or other non-cash payment methods, or extending payment terms by using such methods;(4) Requiring audit results from auditing institutions as settlement basis without legal or regulatory grounds;(5) Illegally collecting deposits, refusing to accept guarantees provided by financial institutions on behalf of medium and small enterprises, or failing to promptly reconcile and refund deposits after the guarantee period expires;(6) Changing legal representatives or principal responsible persons, conducting internal payment procedures, or refusing or delaying payment in cases where no agreement has been made in the contract, based on pending claims, project settlement documents, or similar reasons;(7) Failing to publicly disclose overdue payment information as required.
Government agencies and public institutions having any of the following behaviors shall be held legally accountable:(1) Using fiscal funds to purchase goods, projects, or services from medium and small enterprises without following approved budgets;(2) Requesting construction units to fund projects.Article 33
