Beijing – The Ministry of Industry and Information Technology (MIIT) and related authorities said on Monday that they will tighten regulations governing payments from Chinese automobile manufacturers to their parts suppliers. The move is intended to close loopholes that existed under a previously voluntary self‑commitment scheme, where some manufacturers delayed product acceptance or relied on cash‑less instruments such as bills of exchange and promissory notes.
Under the new rules, automakers must adhere to defined timeframes for product acceptance procedures and make cash payments to suppliers more quickly. Breaches of the requirements will attract penalties, the ministries added.
The regulatory change follows an intense price war in China's auto sector. Last year, after complaints from steel producers and other component suppliers, leading Chinese car makers pledged to settle invoices within 60 days. The ministry noted that, despite the pledge, payment periods remain longer than those observed by established international automotive groups.
The tightened framework aims to improve cash flow for downstream suppliers and reduce financing pressures that have built up amid the competitive environment.
