Retail sales of consumer goods exceeded 50 trillion yuan in 2025, while total circulation of production materials approached 100 trillion yuan, with over 180 million market entities—these figures outline the vast scale of China's domestic market. However, in the textile industry, irregular transactions, excessively long payment terms, and difficult receivables have become the norm, especially for small and medium-sized fabric suppliers who often fall into a cycle of 'goods shipped, money not returned.' On May 8, 17 national industry associations jointly issued the 'Domestic Trade Transaction Guidelines (Trial)', precisely targeting these long-standing systemic bottlenecks.
Background
This guideline is not an isolated document. It was guided by the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Justice, and the Cyberspace Administration of China, and jointly released by 17 industry associations including the China National Textile and Apparel Council, the China Textile Commerce Association, and the China Chamber of Commerce for Textiles Import & Export. The composition of the drafting parties indicates that every node of the textile supply chain—from production and circulation to foreign trade—is represented, meaning these rules will directly impact everything from yarn trading to garment procurement.
The core of the guideline is to clarify key aspects such as 'signing transaction contracts, delivery and acceptance of goods, payment terms and settlement, and standardizing commercial behavior.' For textile enterprises, this is equivalent to a 'standardized operating manual' for domestic trade. Previously, many small and medium-sized enterprises relied only on verbal agreements or simple orders, making it extremely costly to seek recourse in cases of quality disputes or delayed payments.
Industry Impact
The most immediate impact of this guideline on the textile industry lies in payment term management. In domestic textile trade, payment terms of 90 or even 180 days are not uncommon, with some downstream apparel brands using their strong bargaining position to shift inventory pressure upstream to fabric mills. While the new rules do not set a mandatory cap on payment terms, they provide suppliers with clearer negotiation leverage and a more robust framework for recourse by standardizing contract clauses and payment processes.
From the perspective of industrial clusters, small and medium-sized enterprises in textile hubs like Keqiao, Shengze, and Nantong will be the biggest beneficiaries. Fabric merchants in these areas have long had to passively accept payment delays from large clients. With the new rules in place, companies can explicitly agree on payment milestones and penalty clauses in contracts, significantly improving the predictability of receivables.
Furthermore, the guideline's emphasis on 'standardizing commercial behavior' means that gray-area practices such as kickbacks and secret rebates will face stricter scrutiny. This has long-term significance for enhancing transparency and fairness in textile trade and also helps reduce compliance risks for buyers.
Practical Recommendations
For Buyers - Promptly incorporate the 'Domestic Trade Transaction Guidelines' clauses into procurement contract templates, especially regarding product acceptance standards and payment timelines, to avoid future disputes. - Use the 'standardize commercial behavior' provisions to establish internal supplier integrity management systems and reduce compliance risks. - Reassess the payment term structure of existing suppliers. For long-term partners with excessively long payment terms, try to negotiate more reasonable payment plans based on the new rules.
For Foreign Trade Enterprises - Although the guidelines target domestic trade, companies shifting from export to domestic sales should pay special attention to clauses on contract signing and delivery acceptance, avoiding the direct application of foreign trade habits (e.g., sample approval) to domestic trade, which could lead to ambiguous acceptance standards. - Monitor any supplementary implementation details that industry associations may issue later, and proactively adjust internal transaction processes and legal review procedures. - Use the new standardized transaction rules as a starting point to build trust with new domestic customers, reducing the credit risk of first-time cooperation.
The introduction of this guideline marks a critical step for the textile industry's transition from a 'relationship-based economy' to a 'contract-based economy.' While it cannot completely eradicate the payment term problem in the short term, it provides the industry with actionable institutional tools. For textile enterprises, actively embracing these rules is not merely about compliance; it is a strategic choice to gain a first-mover advantage in the construction of a unified national market.