On September 7, 2026, China's Ministry of Industry and Information Technology (MIIT) and the State Administration for Market Regulation jointly issued the Notice on Promoting Standardized Supplier Payment and Optimized Payment-Term Management for Automobile Enterprises, the first national document specifically targeting payment terms in the auto industry.
The notice sets out five requirements, including a clearer definition of when payment terms start to run: counting from the date when the supplier delivers goods, engineering, or services and the buyer accepts them. Acceptance procedures must be completed within three working days for ordinary parts, and within five working days for functional components requiring vehicle-mounted verification.
It also standardizes payment methods, encouraging the use of cash and prohibiting the forcing or indirect forcing of suppliers to accept non-cash instruments such as bank or commercial acceptance bills or supply-chain notes. In June 2025, 17 leading automakers publicly committed to a 60-day payment term cap, and the average payment term at major automakers has shortened materially over the past year.
Analysts said the new rules constrain powerful automakers from delaying payments, improve cash flow for parts suppliers and strengthen the overall health of the industry chain.
Source: National Business Daily / Tencent News
