New Domestic Trade Guidelines Signal Relief for Textile Industry's Payment Term Woes

China's total retail sales of consumer goods surpassed 50 trillion yuan in 2025, with the circulation of production materials approaching 100 trillion yuan and over 180 million market entities. Behind this massive domestic trade volume, however, lies a persistent pain point: irregular transactions, excessively long payment terms, and difficulty in collecting receivables. The textile industry, one of the most capital-intensive links in the domestic trade chain, feels this acutely.

Policy Focus: Unified Rules to Tackle Chronic Industry Problems

On May 8, guided by the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Justice, and the Cyberspace Administration, 17 national industry associations and chambers of commerce jointly released the 'Domestic Trade Transaction Guidelines (Trial)'. Participants included core textile organizations such as the China National Textile and Apparel Council, the China Textile Commerce Association, and the China Textile Import and Export Chamber, meaning the guidelines cover the entire textile chain.

The guidelines set high standards for key links including contract formation, goods delivery and acceptance, payment terms and settlement, and commercial conduct. For the textile industry, the payment term issue has long been a focal point of upstream-downstream bargaining—fabric mills supplying garment brands often endure 60- or even 90-day payment terms, while they themselves must pay cash for yarn and dyes. This scissors-like cash flow pressure keeps many small and medium-sized weaving enterprises perpetually on the edge of a funding crisis.

Industry Impact: From Transaction Standardization to Credit Ecosystem Reshaping

The first change the guidelines bring is the increased certainty of transaction contracts. In the past, domestic textile trade relied heavily on verbal agreements or simple documents, making dispute resolution costly when quality issues or payment delays occurred. The new guidelines structure delivery acceptance and payment milestones, providing buyers and sellers with standardized templates at the contracting stage, reducing disputes caused by vague rules.

A deeper impact lies in the transmission of the credit system. When payment terms and settlements are brought under unified norms, the accounts receivable of textile enterprises become more predictable. This is particularly critical for upstream chemical fiber and cotton spinning companies, which bear the risk of raw material price fluctuations; chaotic downstream payment rhythms can easily trigger chain defaults. Data shows over 180 million market entities in China, with a significant share in textiles. Unified rules help shift industry credit from 'relationship-based' to 'system-based trust'.

For enterprises shifting from export to domestic sales, these guidelines also have practical significance. In recent years, some textile foreign trade companies have turned to the domestic market but struggled with its credit culture. The standardized framework reduces the friction cost of switching between foreign and domestic trade rules, facilitating a smoother market transition.

Practical Recommendations

For Buyers - Explicitly cite the 'Domestic Trade Transaction Guidelines (Trial)' in contracts as the basis for acceptance and payment to avoid disputes from verbal agreements. - Use the guidelines' payment term norms to negotiate phased payment plans with suppliers, such as batch settlement based on delivery progress, to reduce single capital occupation. - Incorporate the guidelines' commercial conduct standards into supplier evaluation systems, prioritizing partners with transparent transaction processes.

For Export-Oriented Enterprises - When entering the domestic market, proactively offer standardized contract templates based on the guidelines to build professional trust with customers. - Use the guidelines' clear definition of payment terms to design cash flow models for domestic business, keeping the collection cycle within 45 days to match operating costs. - Monitor subsequent supporting industry credit evaluation mechanisms related to the guidelines, actively participate in pilot programs, and accumulate domestic trade credit records.