Government departments and public institutions at all levels and State-owned enterprises should take the lead in timely payments for small and medium-sized enterprises (SMEs), Premier Li Keqiang stressed at the State Council executive meeting on July 1.

Premier Li said the fundamentals of the economy should be stabilized to help SMEs through this difficult time. As a move to that end, the draft regulation on ensuring payments to SMEs was adopted at the meeting.

Deferred payment and arrears, if not resolved, will take a toll on enterprises and discourage SMEs' confidence in development, Premier Li noted.

In the current efforts to ensure stability on the six fronts and security in the six areas, he said, the draft regulation is an urgent move to safeguard legal rights and interests of SMEs and private enterprises.

Hardest time for SMEs

SMEs have long been in a disadvantaged market position in industrial chains and sales channels, Premier Li said, adding that they are now having the hardest time due to the epidemic.

The purpose of the regulation is to protect SMEs, as ensuring payments to them has become an urgent problem, he said.

The draft regulation provides for contract signing, funding provision and means of payment for government departments, public institutions and large enterprises in their dealings with SMEs.

It sets out requirements on the payment period and acceptance review, and specifies conditions that cannot justify refusing or delaying related payments.

A system will be established for public disclosure of information regarding overdue payments to SMEs within the prescribed time limit.

Stipulations are laid down for handling complaints, penalties for acts of bad faith, and disciplinary action and accountability.

The urgency of the problem necessitates prompt actions to finalize and implement the regulation, the Premier said.

Expose typical cases on payment default to SMEs

In the past two years, related government departments and large State-owned enterprises have been actively dealing with the payment default to individual enterprises and SMEs, Premier Li said.

He demanded they increase efforts in cleaning payment defaults this year, ensure payments to SMEs, fulfill social responsibilities and create a fair market environment ruled by laws.

“The typical cases of payment default to SMEs should be exposed in public. The General Office of the State Council and related departments should strengthen supervision, ensuring the enforcement of the regulation,” Premier Li said at the meeting.