In June 2022, the Ministry of Finance (“MOF”) and
the Ministry of Housing and Urban-Rural Development
(“MOHURD”) jointly released the “Circular on
Improving the Methods for the Settlement of Construction
Price”, which became effective on 1 August 2022.
China has long regulated the proportion of the contract price in
government projects, which must be paid by way of interim progress
payments. That proportion has now been increased.
More particularly, the Circular states that the proportion of
construction progress payments for construction projects of
governmental agencies, institutions, and state-owned enterprises
shall be not less than 80% of the price of the completed project.
This increases the lower limit of the 2004 requirements for
progress payments to be between 60% and 90% of the contract
price.
