New Domestic Trade Guidelines: A Policy Breakthrough for Textile Industry's Payment-Term Dilemma

One of the most persistent hidden costs in China's textile industry—long payment terms—is finally facing a systematic solution. On May 8, under the guidance of the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Justice, and the Cyberspace Administration, 17 national industry associations jointly issued the 'Domestic Trade Transaction Guidelines (Trial)'. This document is not a vague call to action; it targets specific pain points in domestic trade: contract formation, goods acceptance, payment terms, and commercial conduct, aiming to build a high-standard set of transaction rules for over 180 million business entities.

The Payment-Term Trap: A Hidden Cost for Textiles

The textile chain is long and capital-intensive—from chemical fiber and fabric weaving to garment manufacturing and retail. Public data shows that in 2025, total retail sales of consumer goods exceeded 50 trillion yuan, and total circulation of production materials approached 100 trillion yuan. Yet, the problem of excessively long payment terms and difficult receivables persists. Textile companies are particularly affected: fabric suppliers often accept payment terms of 90 days or even six months. When a downstream garment factory faces a cash crunch, the upstream mill bears the bad debt risk. This 'debt chain' is especially common among small and medium textile enterprises, squeezing already thin margins.

The new Guidelines explicitly regulate payment terms and conditions, requiring both parties to specify payment dates, methods, and penalties for default in the contract. This means textile companies will have clearer rules when signing with buyers, rather than relying on oral agreements or industry custom. For suppliers who have long been in a weaker bargaining position, this is a legal safeguard.

Unified National Market: Breaking Regional Barriers

The Guidelines are part of a broader push to build a unified national market. In the past, transaction rules varied greatly across regions and industries, forcing textile firms to adapt to multiple standards for cross-provincial deals, driving up negotiation costs. The joint release by 17 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—means that textile trade rules will align horizontally with those of light industry, building materials, and auto distribution, creating a common baseline.

From an industrial cluster perspective, major textile hubs like Keqiao, Shengze, and Nantong will benefit directly. These areas handle high transaction volumes with many participants. Standardized contracts can reduce disputes caused by vague terms and improve efficiency. Unified acceptance standards will also lower the frequency of quality disputes, allowing buyers and sellers to focus on products rather than arguments.

Practical Recommendations

For Buyers - Immediately review existing procurement contracts against the Guidelines' requirements on payment terms and conditions; adjust payment cycles to avoid default risks. - Prioritize suppliers who already use standardized contracts, as this often indicates better management and more stable cash flow. - Establish internal quality inspection processes based on the Guidelines' goods acceptance standards to reduce return disputes caused by unclear criteria.

For Export-Oriented Firms - The gap between domestic and international trade rules is narrowing; consider using the Guidelines' contract templates as a base for domestic sales to reduce dual-system operational costs. - Pay attention to the Guidelines' requirements on 'standardizing commercial conduct' to avoid violations in promotions or rebates, especially when clearing inventory from cross-border to domestic channels. - Stay in touch with textile import/export chambers for detailed interpretations of the Guidelines for specific textile categories, and prepare early for compliance in domestic sales channels.