In 2025, China's total retail sales of consumer goods exceeded 50 trillion yuan, the total circulation of production materials approached 100 trillion yuan, and the number of business entities surpassed 180 million. These figures illustrate the vast scale of the domestic market. However, persistent problems such as long payment terms and difficult collection have long plagued the textile industry, especially small and medium-sized fabric and yarn suppliers. On May 8, 17 national industry associations jointly released the 'Domestic Trade Transaction Guidelines (Trial)', aiming to address these challenges through rule-making.
Background
The guidelines were developed under the guidance of the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Justice, and the Cyberspace Administration of China. Multiple textile-related associations, including the China National Textile and Apparel Council, the China Textile Commerce Association, and the China Chamber of Commerce for Import and Export of Textiles, participated in drafting. The document clarifies key aspects such as contract formation, delivery and acceptance, payment terms, and business conduct, aiming to establish high-standard transaction norms and improve the standardization of domestic trade. Notably, this is the first time such a multi-industry initiative has been launched, covering sectors from textiles to light industry, building materials, and automotive distribution, reflecting a cross-sector consensus on unified market rules.
From a data perspective, although the textile industry's share of total retail sales is not separately disclosed, its payment term issues are particularly acute. Industry data shows that average payment terms for fabric transactions range from 60 to 90 days, with some orders exceeding 120 days, directly squeezing the cash flow of small and medium enterprises. The release of these guidelines essentially provides these companies with a reference 'transaction template,' helping to reduce disputes caused by vague contracts or commercial customs.
Industry Impact
For the textile supply chain, the guidelines are expected to generate three levels of effects. First, on the procurement side, brand owners and large apparel companies often leverage their bargaining power to extend payment terms. By clarifying payment milestones and acceptance standards, the guidelines may limit this practice. For example, the emphasis on 'delivery and acceptance' timelines means buyers cannot indefinitely delay the acceptance process, thereby accelerating payment collection. Second, for fabric and yarn suppliers, especially small and medium factories in the midstream, standardized contract clauses can reduce transaction risks and bad debts caused by oral agreements or vague terms. Third, on an industry-wide level, unified rules help break down regional market barriers, making transaction processes more consistent across textile clusters like Keqiao and Shengze, reducing friction costs from local practices.
However, the effectiveness of the guidelines depends on voluntary adoption. Currently, 'goods first, payment later' remains the dominant model in domestic trade, especially in textiles, where downstream apparel companies often delay payments citing trial orders or seasonal stocking. While the guidelines provide a framework, they lack enforcement power, requiring sustained promotion by industry associations and proactive compliance by enterprises. Additionally, the payment term issue is tied to supply chain finance—if banks or factoring institutions can offer financing based on standardized contracts, the cash flow pressure on SMEs could be truly alleviated.