CHINA'S Commerce Ministry is preparing to crack down on retailers who fail to pay their suppliers on time and instead use the funds for expansion and other investments ?? or who commit outright fraud.

Also targeted are retailers who obtain bank loans by supplying false information.

Some retailers have even closed up shop and fled after taking goods from suppliers or receiving a bank loan, the ministry said on its Website, without supplying details.

New measures to be implemented next month will require provincial commerce watchdogs to keep a close eye on retailers who delay payments to suppliers for more than three months or in cases where the amount owed exceeds 50 percent of a retailer's assets.

Special regional task forces will be set up to investigate payment problems, and more channels such as hot lines and e-mail boxes will be established for suppliers reporting problems.

The ministry said the government will try to map out measures on the issue before the end of October, clarifying payment deadlines and other legal provisions.

"We welcome the move because it will help standardize the market and benefit the industry in the long term, especially at a time when such foreign giants as Wal-Mart Stores have entered the market." said Zhang Jindong, chairman of Suning Appliance, a leading chain store operator.