China will enforce regulations on ensuring timely payments to small and medium-sized enterprises (SMEs) starting from Sept. 1.

The State Council announced the regulations in a bid to safeguard legitimate rights and interests of SMEs and improve the business environment.

The regulations ban government departments, public institutions and large enterprises from defaulting on payments to SMEs in any disguised form, or forcing unfair payment terms upon SMEs in contracts.

To curb unfair practices, China will standardize contract signing and set up mechanisms for payment information disclosure, complaint handling, as well as supervision and evaluation, according to the regulations.