China clears 75% of overdue payments to smaller private enterprises

China is stepping up measures to support private companies and small and medium-sized enterprises (SMEs), including ensuring government departments and State-owned enterprises clear their overdue payments to them.

As of the end of last December, 75% of the more than 890 billion yuan (US$129.76 billion) in such arrears identified nationwide had been paid up, exceeding the projected target of making no less than half of the payments in 2019, according to Xin Guobin, vice-minister of industry and information technology.

"By the end of this year, all undisputed arrears should be cleared as much as possible, and no new arrears should be incurred," Xin said during a recent State Council Information Office press conference held in Beijing.

"In the next step, we will continue to adopt measures such as consultation, supervision, inspection and follow-up evaluation to facilitate government efforts in classifying and formulate a settlement plan," Xin added. "Meanwhile, we will speed up the legislative process of the regulation to force government departments and SOEs to pay their bills on time."

Statistics from the third-party assessment in December showed 94% of the enterprises were satisfied with the overdue payment clearing work, and 96% reported that no new arrears were incurred in 2019.

The State Council at its Jan. 8 executive meeting chaired by Premier Li Keqiang made arrangements for ensuring that government departments and SOEs clear their overdue payments to private firms and SMEs and required that resolute efforts be made to see the work through.

President Xi Jinping said that government departments and SOEs must under no circumstances incur payment arrears to private businesses, and effective measures should be taken to prohibit acts of sidestepping repayments.

Premier Li Keqiang made clear the target and tasks in clearing arrears during the annual session of the National People's Congress last year, and stressed the need for resolute efforts to see the work through in this regard.