Core Viewpoint - The article highlights the ongoing challenges faced by small and medium-sized enterprises (SMEs) in the automotive supply chain, particularly regarding payment terms and the emergence of "invisible" payment periods that extend beyond the nominal payment terms set by large enterprises [1][3][4]. Group 1: Payment Terms and Challenges - The Ministry of Industry and Information Technology has opened a platform to address complaints regarding payment delays from key automotive companies, indicating a regulatory response to the issue [1]. - While some material suppliers have benefited from the new "60-day payment term" policy, other sectors like equipment and infrastructure still experience lengthy payment cycles, sometimes exceeding one year [1][3]. - The concept of "invisible payment periods" has emerged, where the time from delivery to payment confirmation can be significantly longer than the nominal terms, creating cash flow challenges for SMEs [3][4][5]. Group 2: Causes of Delayed Payments - Large enterprises often delay payment confirmations for several reasons, including tight cash flow, complex acceptance processes in large projects, and strategic decisions to enhance their own financial metrics [5][6][8]. - Some companies engage in "layered transactions" to circumvent regulatory requirements, effectively extending payment periods while appearing to comply with nominal terms [5][8]. Group 3: Impact on SMEs - SMEs face significant difficulties in obtaining financing due to the lack of formal payment confirmations, which hampers their ability to secure loans from banks [18][19]. - The cash flow cycle for listed SMEs in China has shown a deterioration, with accounts receivable periods increasing from 116 days to 135 days, indicating worsening cash flow conditions despite some improvements in overall cash flow cycles [13][14]. Group 4: Regulatory and Policy Responses - Recent regulations, such as the "Payment Protection for SMEs" and guidelines from the central bank, aim to ensure timely payments from core enterprises to protect SMEs' cash flow [14][15]. - The article suggests that learning from international practices, such as penalties for delayed payments in the UK and EU, could enhance the accountability of large enterprises in China [15][16]. Group 5: Future Considerations - The article emphasizes the need for core enterprises to recognize the benefits of optimizing payment terms for their operational efficiency and the stability of the supply chain [21]. - It calls for more detailed and enforceable regulations to ensure transparency and predictability in payment terms across the supply chain [21].

Core Insights - The article discusses the challenges faced by small and medium-sized enterprises (SMEs) in the automotive supply chain, particularly regarding payment terms and cash flow management [1][3][12] - It highlights the introduction of a "60-day payment term" by major automotive companies, but notes that not all suppliers benefit equally, with some facing much longer payment cycles [3][4] - The concept of "invisible payment terms" is introduced, where delays in payment confirmation create additional cash flow challenges for SMEs [3][5][9] Payment Terms and Challenges - The "60-day payment term" is primarily applicable to material suppliers, while equipment and infrastructure suppliers often experience longer payment cycles, sometimes exceeding one year [3][5] - SMEs are often pressured to accept unfavorable payment terms due to the need to maintain relationships with larger enterprises, which can lead to cash flow issues [9][11] - The article emphasizes that the real issue for SMEs is not just the nominal payment terms but also the hidden delays in payment confirmation, which can extend the time before they receive payment [4][5][9] Regulatory Environment - Recent regulations, such as the "Payment Protection for SMEs" law, aim to ensure timely payments from core enterprises to their suppliers, but implementation details remain vague [12][13] - The article suggests that existing regulations in developed countries impose penalties on late payments, which could serve as a model for improving the situation in China [13] Financial Implications - SMEs struggle to secure financing due to the lack of formal payment confirmations, which complicates their ability to leverage accounts receivable for loans [14][15] - The reliance on core enterprises' credit for supply chain financing poses risks, and there are calls for alternative financing models that do not depend solely on these large companies [15][16] Recommendations for Improvement - The article advocates for clearer regulations regarding penalties for delayed payments and suggests that core enterprises should be required to disclose accounts receivable information to enhance transparency [17] - It emphasizes the need for a cultural shift in business practices, encouraging core enterprises to optimize payment terms to improve overall supply chain efficiency [17]