TREE NEWS update: China’s Ministry of Industry and Information Technology said it supports large enterprises in using loans and bond issuance to replace accounts payable owed to smaller suppliers, Vice Minister Ke Jixin told a State Council Information Office briefing on September 14. The ministry’s notice on tackling payment delays requires large firms to shorten payable periods, cut the scale of payables and raise the share of cash payments, with special arrangements made for the short-term pressure firms may face in complying.
China’s MIIT Backs Large Firms’ Loans and Bond Issuance to Settle Payables
AI take
The policy targets a structural bottleneck in China's industrial supply chains: large buyers using payables as de facto financing at the expense of smaller suppliers. Refinancing those obligations through loans and bonds shifts the burden onto the formal credit system, which could ease cash-flow stress for SMEs but concentrates exposure on banks and bondholders. The open question is whether the special arrangements for firms facing short-term compliance pressure signal genuine flexibility or a softening of enforcement.
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