State Office: Exploring the use of SME specialty and new development evaluation results for financing and credit enhancement to guide financial institutions to step up support for high-quality small and medium-sized enterprises

The Zhitong Finance App learned that on September 10, the General Office of the State Council issued the “Notice on Strengthening the Work Related to Managing Payment Difficulties for Small and Medium Enterprises”. Among them, it is proposed to increase supporting financing support. Strengthen the supply of financing and provide support in terms of loans and debt issuance for large enterprises with obvious results in reducing payable periods and reducing pressure on scale. Guide commercial banks to support large enterprises to replace accounts payable through loans and debt issuance financing on the premise that risks are manageable, and promptly pay cash to downstream small and medium-sized enterprises. Explore the use of evaluation results on the specialized and innovative development of small and medium-sized enterprises for financing and credit enhancement, and guide financial institutions to step up support for high-quality small and medium-sized enterprises.

The full text is as follows:

Notice of the General Office of the State Council on strengthening the work related to the management of repayment difficulties for small and medium-sized enterprises

The people's governments of the provinces, autonomous regions and municipalities directly under the Central Government, all ministries, departments and agencies directly under the State Council:

In order to control the repayment difficulties of small and medium-sized enterprises in accordance with the law and smooth out the economic cycle, with the approval of the State Council, the relevant matters are now notified as follows:

1. Improve industry account payment rules

(1) Clear and reasonable accounting periods by industry. Authorities in charge of various industries will embed timely payment requirements into industry management and strengthen implementation. Formulate and improve settlement and payment management regulations in this industry, and clarify key elements such as account period starting points, account payment methods and processes, goods and service inspection (or project completion settlement) standards and deadlines, and maximum payment periods (collectively referred to as the four key elements of payment). While respecting transaction habits, large enterprises in the industry and their wholly-owned or holding subsidiaries (hereinafter collectively referred to as large enterprises) are guided to limit the maximum payment period for small and medium-sized enterprises to 60 days. Formulate, improve and promote the use of model contract texts, and implement the four key elements of payment. Refine the criteria for determining untrustworthy behavior in arrears of corporate accounts by industry and clarify punitive measures. Formulate supporting provisions of the “Regulations on Safeguarding Payment of Funds for Small and Medium Enterprises”. Where the payment method is not specified in the contract, institutions, institutions, and large enterprises all use cash to pay SME accounts, and must not use commercial money orders or electronic accounts receivable documents (hereinafter referred to as electronic vouchers) in place of payment.

(2) Promote leading enterprises to take the lead in implementing the “60-day present commitment”. Launch timely payment initiatives for large enterprises in the industry, and guide large enterprises, especially leading enterprises, to take the lead in issuing and implementing promises to pay accounts to small and medium-sized enterprises in cash within 60 days from the date of delivery of goods, projects, and services. Urge large enterprises to keep accounts in strict accordance with corporate accounting standards, and correct acts such as not signing contracts, not invoicing, and not confirming debt-debt relationships. Guide relevant associations to carry out self-regulatory management of timely payments and formulate self-regulatory standards for timely payments.

II. Strengthen the supervision of payment behavior of large enterprises

(3) Conduct interviews and rectification. Establish and improve mechanisms for monitoring large corporate accounts, focusing on large enterprises with large accounts payable and abundant cash assets. For large enterprises that deliberately lengthen account periods, industry authorities or supervisory authorities, the People's Bank of China, the General Administration of Market Supervision, etc. carry out joint interviews and supervise rectification, and the relevant local people's governments cooperate to do a good job of supervising the rectification. Enterprises that refuse to make corrections after the interview are jointly punished according to law and regulations; those found to be seriously untrustworthy are publicized on the “Credit China” website and punished for loss of trust according to law and regulations.

(4) Strict anti-unfair competition enforcement. Accelerate the refinement of the enforcement guidelines of Article 15 of the Anti-Unfair Competition Law, handle relevant complaints and reports in accordance with the law, and deter the abusive acts of large enterprises that deliberately lengthen the account period by abusing their dominant position through model accounting points, delaying inspection and acceptance of goods and services (or project completion and settlement), and using commercial money orders or electronic vouchers to disguise payment periods. After investigation, they are punished according to law and regulations, and publicly exposing typical cases.

(5) Improve disclosure requirements for account information. Refine and improve information disclosure rules for listed companies, and clearly require listed companies with accounts payable to a certain scale to disclose matters such as main account payment methods, average account periods, commercial money orders, and the issuance of electronic vouchers. Companies that issue corporate bonds or non-financial corporate debt financing instruments in exchange markets and interbank markets are required to enhance disclosure of account information. Guide listed companies and debt issuers that have long account periods and use non-cash payments to gradually reduce account periods, increase cash payment ratios, and make timely payments. Accelerate the improvement of rules for disclosing information on annual reports such as overdue accounts payable by large enterprises, and step up supervision and enforcement.

(6) Give full play to the exemplary role of central enterprises and state-owned enterprises in making timely payments. Central enterprises took the lead in clarifying the four key elements of payment in contracts, taking the lead in implementing various requirements relating to electronic certificate business and electronic certificate service platform management, using cash payments for all small and medium-sized enterprises, and maintaining a reasonable cash payment ratio for large enterprises. Default arrears are discovered and settled together, and seriously prosecuted and held to account in accordance with the law and regulations. Where a large enterprise undertakes a central enterprise project and then subcontracts implementation, the central enterprise shall require the general contracting unit to promptly pay the accounts to the subcontracted unit and maintain the same cash payment ratio in the contract. Embed timely payment requirements into the central enterprise compliance management system. The payment status of accounts payable by central enterprises and subsidiaries at all levels, and the issuance of commercial bills of exchange and electronic certificates are incorporated into the supervisory system, and the treasury system is used to carry out penetrating supervision. Local state-owned assets supervisory authorities supervise enterprises in accordance with the above requirements.

III. Standardize the management of non-cash payment instruments

(7) Standardize the management of electronic certificate business. Reduce the maximum payment period for electronic vouchers to 6 months. Electronic certificate service platforms are not allowed to issue new electronic vouchers with a payment period of more than 6 months, and commercial banks and commercial factoring companies are not allowed to provide financing for electronic vouchers with a payment period of more than 6 months. Monitor large enterprises that overuse commercial money orders and electronic vouchers, and urge the downsizing of commercial money orders and electronic vouchers business. Large enterprises are required not to force or disguise small and medium-sized enterprises to conduct accounts receivable financing with associated commercial factoring companies.

(8) Strictly supervise electronic certificate service platforms. The electronic certificate service platform should strictly implement various compliance requirements such as filing management, certificate period, and fee specification, and connect all operating data to the Shanghai Bill Exchange. The Shanghai Bill Exchange monitors the issuance of commercial money orders and electronic vouchers by large enterprises across agencies and with a full caliber. Where payment is overdue for commercial money orders and electronic vouchers of large enterprises, the Shanghai Bills Exchange and the electronic certificate service platform will separately disclose them. The e-voucher service platform stopped providing newly issued e-voucher services for companies with overdue payments.

IV. Strengthening capital transmission efficiency and financing support

(9) Unblock the financial transmission chain. The full amount of government procurement projects is paid in cash, and timely payment is included in the scope of government procurement project supervision; strengthen supervision of the entire process from the bottom up to payment of government investment project funds; give priority to cash payments by owners' units and push project general contracting units to promptly pay no less than the same proportion of cash to subcontractors. Existing government investment projects that have been completed but have not been settled and paid should complete financial accounts and pay for the project as soon as possible, push general contracting units to pay subcontractors as soon as possible, and encourage migrant workers' wages to be paid. Strengthen the implementation and supervision of the “Administrative State-owned Assets Management Regulations”, and strictly implement the time frame requirements for construction projects from completion acceptance to completion and financial accounts. Public institutions must strictly implement the statutory payment period requirements for the procurement of goods, projects, and services from small and medium-sized enterprises. Key regions and industries where the national default payment arrears complaint platform finds outstanding arrears are supervised and rectified within a limited period of time, and notified by industry by region if necessary.

(10) Increase supporting financing support. Strengthen the supply of financing and provide support in terms of loans and debt issuance for large enterprises with obvious results in reducing payable periods and reducing pressure on scale. Guide commercial banks to support large enterprises to replace accounts payable through loans and debt issuance financing on the premise that risks are manageable, and promptly pay cash to downstream small and medium-sized enterprises. Explore the use of evaluation results on the specialized and innovative development of small and medium-sized enterprises for financing and credit enhancement, and guide financial institutions to step up support for high-quality small and medium-sized enterprises.

All relevant departments in all regions should strengthen work coordination, strengthen vertical coordination, consolidate responsibilities and continue to advance, insist on guiding correction and law enforcement and accountability, promote the overall improvement of the problem of small and medium-sized enterprises in repayment difficulties, and create a good ecosystem for integrated development, mutual benefit and win-win situation for large, medium, and small enterprises. Special classes to clean up corporate accounts arrears should strengthen coordination, guidance, supervision, follow-up and evaluation, and promote the implementation of various tasks. Request reports on important situations in a timely manner in accordance with the procedures.

This article was selected from “China Government Network Official Website”; Zhitong Finance Editor: Huang Xiaodong.