China’s total retail sales of consumer goods surpassed 50 trillion yuan in 2025, while the total circulation of production materials approached 100 trillion yuan, with over 180 million market entities. Within this massive domestic trade landscape, the textile sector stands out as one of the most active yet also one of the most troubled by payment disputes and collection difficulties. On May 8, 17 national industry associations, under the guidance of multiple government departments, jointly released the Domestic Trade Transaction Guidelines (Trial), directly targeting these long-standing invisible barriers.
Background
The guidelines were issued under the guidance of the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Justice, and the Cyberspace Administration of China. Key textile associations such as the China National Textile and Apparel Council, the China Textile Commerce Association, and the China Chamber of Commerce for Import and Export of Textiles were among the 17 publishers. The guidelines set clear requirements on contract formation, goods delivery and acceptance, payment terms and settlement, and business conduct, aiming to establish a high-standard transaction framework for enterprises to reference.
In recent years, domestic textile transactions have often relied on verbal agreements or simple contracts, with payment terms ranging from 30 to 90 days or even longer. Difficulties in collecting payments have squeezed the cash flow of small and medium-sized fabric and yarn traders, forcing some to resort to private lending, which indirectly raises financing costs across the supply chain. The new guidelines mark a critical step from informal ‘gray rules’ toward standardized practices.
Industry Impact
For textile enterprises, the most direct benefit lies in improved payment term management and payment security. The guidelines clearly standardize payment terms and settlement methods. Although not legally binding, they provide a clear reference framework for both parties in a transaction. When a buyer demands a 90-day payment term, the supplier can now negotiate based on industry consensus standards, reducing the possibility of unilateral price pressure or extended payment cycles.
From an industrial cluster perspective, the biggest beneficiaries will be the numerous small and medium-sized factories in clusters like Keqiao (Shaoxing), Shengze (Wujiang), and Nantong home textiles. These enterprises typically have weak bargaining power and often accept harsh payment conditions when dealing with large buyers. The new guidelines may help shift this imbalance, encouraging buyers to adopt more standardized payment practices.
However, the effectiveness of the guidelines depends on voluntary adoption. The textile supply chain is long and involves frequent transactions; transitioning completely from a ‘gray zone’ to a ‘standard model’ will take time. But given the broad coverage of the 17 national associations and the strong policy push for a unified domestic market, the practical impact of this guideline should not be underestimated.