What happened
China's Ministry of Industry and Information Technology and the State Administration for Market Regulation jointly issued a notice on September 7, 2026, aimed at regulating payment terms between automakers and their suppliers.
The notice sets clear rules for when payment periods start, requiring that they begin only after suppliers deliver goods and they pass acceptance checks. It also mandates that automakers complete acceptance of general parts within three working days and functional parts requiring vehicle testing within five working days.
The guidelines encourage cash payments and prohibit forcing suppliers to accept non-cash instruments like commercial acceptance bills or supply chain notes. They also require automakers to pay small and medium-sized suppliers within 30 days where possible, with a maximum of 60 days.
Why it matters
This is the first national policy document specifically addressing payment terms in any industry, signaling a regulatory push to curb unfair competition and stabilize supply chains.
Excessively long payment periods have increased financial pressure on suppliers and threatened the stability of the automotive supply chain. The new rules aim to foster a fairer, more collaborative relationship between automakers and parts suppliers.
The move follows a June 2025 commitment by 17 major automakers to keep payment periods within 60 days, which has already shortened average payment times. These guidelines formalize and expand such efforts.
Key facts
The notice was jointly issued by the Ministry of Industry and Information Technology and the State Administration for Market Regulation.
Payment periods must start from the date suppliers deliver goods and they pass acceptance, with acceptance of general parts required within 3 working days and functional parts within 5 working days.
Automakers are encouraged to pay small and medium-sized suppliers within 30 days, with a maximum of 60 days, and to use cash payments.
The guidelines prohibit forcing suppliers to accept non-cash payment methods such as commercial acceptance bills or supply chain notes.
In 2025, 17 major automakers publicly committed to payment periods not exceeding 60 days, which has effectively shortened average payment times.
What to watch next
Watch for how automakers adjust their payment practices to comply with the new rules, and whether they disclose payment information as encouraged.
The government plans to conduct annual evaluations by third parties and may publicly release results, which could increase transparency and accountability in the industry.
The effectiveness of these measures will depend on enforcement, including joint talks and penalties for violators, as well as the response from suppliers and industry stakeholders.