PBOC: SME payment delays hurt economic circulation, weaken monetary policy transmission

The PBOC is framing corporate payment behavior as a monetary transmission problem, not just a fairness issue — a notable shift in how the central bank diagnoses why rate cuts underdeliver. The dynamic it describes, where large firms' interest-free payables mute their sensitivity to rates while suppliers borrow at higher risk premiums, means easing can partly stall inside supply chains rather than reach investment. This matters most for smaller suppliers and for anyone reading PBOC easing signals as a clean gauge of credit conditions. Whether the report translates into concrete payment-discipline measures is the open question.