China sets out new financial rules for carmakers

China has tightened payment rules for automakers, setting firm deadlines for accepting parts and closing loopholes that allowed carmakers to stretch supplier payments.

The Ministry of Industry and Information Technology and the State Administration for Market Regulation on Monday unveiled new guidelines aimed at standardizing supplier payment practices across the world's largest auto market.

The move comes after 17 major Chinese automakers pledged last June to keep supplier payment periods within 60 days.

The new rules spell out how that 60-day clock should work in practice. Payment periods must be calculated from the date that goods, engineering work or services delivered by suppliers have passed acceptance checks.

They also impose tighter timelines on those checks. Automakers should generally complete acceptance of ordinary components and other production materials within three working days of receiving them, while functional components that require installation and vehicle testing should generally be accepted within five working days.

The rules further tighten requirements on how suppliers are paid. Automakers are encouraged to use cash and are prohibited from forcing, or indirectly pressuring, suppliers to accept non-cash payment instruments such as bank acceptance bills, commercial acceptance bills and supply-chain notes.

Automakers and suppliers must specify payment deadlines in their contracts and abide by them. Companies that have publicly committed to a maximum payment period cannot set a longer deadline in supplier contracts.

Wind data showed average accounts-payable turnover days among major automakers at about 170 days in mid-2025 and 164 days at the end of that year, before rising to roughly 187 days by mid-2026.

The MIIT said that it will commission third-party organization to assess payment practices at major automakers annually and publish the results. The reviews will examine payment periods and methods, as well as accounts-payable levels, using company documents, data reviews, on-site inspections and employee interviews.