China's total retail sales of consumer goods exceeded 50 trillion yuan in 2025, while the total circulation of production materials approached 100 trillion yuan, with over 180 million business entities. These figures highlight the sheer scale of domestic trade, but also mask a chronic problem: inconsistent transaction rules and frequent payment disputes. 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)'. Both the China National Textile and Apparel Council (CNTAC) and the China Textile Commerce Association are among the signatories. This document aims to standardize contract formation, goods inspection, payment terms, and commercial conduct, providing a reference framework for domestic trade.
Background
The direct impetus for the guidelines is the widespread problems of 'non-standard transactions, long payment terms, and difficulty in collecting payments' in domestic trade. These issues are particularly acute in the textile industry. In fabric procurement, payment terms often stretch from 60 to 90 days, and small and medium-sized weaving and dyeing mills frequently face cash flow pressure due to delayed payments. The inclusion of CNTAC and the China Textile Commerce Association among the 17 signatories means the guidelines directly cover the entire chain from chemical fibers, yarns, and fabrics to garment trading. It is worth noting that the guidelines are not mandatory regulations but industry self-discipline standards for reference. However, with the backing of ministries, they may evolve into contract templates or industry practices.
Industry Impact
The most direct impact on the textile supply chain lies in the regulation of payment terms. The guidelines clarify the norms for 'payment terms and methods', meaning the past practice of relying on verbal agreements or vague contract clauses will need adjustment. Buyers who habitually delay payments may face higher default costs, while suppliers gain clearer legal grounds for claims. Industry data shows that the average accounts receivable turnover period for textile enterprises is over 45 days, and for some SMEs, it exceeds 90 days. If the guidelines can push the industry to compress this to 30 days, hundreds of billions of yuan in working capital could be unlocked.
Another key point is the standardization of goods delivery and inspection. Textile products come in large batches with variable quality, and inconsistent inspection standards often lead to disputes. The guidelines require clear agreements on inspection procedures, meaning buyers and sellers must specify key indicators like color fastness, shrinkage rate, and weight per square meter in contracts. This will increase upfront communication costs for fabric traders accustomed to a 'sample confirmation plus batch production' model, but it will also reduce post-dispute risks. Overall, the new rules favor standardized operations by leading enterprises while squeezing middlemen who rely on delaying payments.
Practical Recommendations
For Buyers - Clearly define inspection standards and payment milestones in contracts, avoiding vague terms like 'payment on delivery'. Refer to the payment term templates in the guidelines. - Prioritize suppliers with credit ratings or industry self-discipline commitments to reduce delivery risks caused by their cash flow issues. - Use the 'standardize commercial conduct' provisions to include anti-bribery clauses in framework agreements, mitigating compliance risks.
For Textile Factories - Proactively incorporate the guidelines' transaction norms into sales contracts, especially detailing the period for inspection objections and penalty clauses for overdue payments. - Monitor subsequent industry implementation rules from CNTAC and adjust internal order management processes accordingly. - For orders with payment terms exceeding 60 days, request a bank guarantee or third-party warranty to hedge against collection risks.
Outlook
The release of the guidelines marks a shift in domestic trade from 'wild growth' to 'rule-driven' operations. For the textile industry, this change will accelerate the elimination of middlemen who profit from information asymmetry and payment delays, pushing transactions toward transparency and standardization. In the short term, companies will need to invest in legal and contract management costs. In the long run, unified transaction rules will reduce friction costs across the supply chain and improve the operational efficiency of the domestic market. With a more standardized trading foundation for the 50 trillion yuan retail market, textile enterprises will see tangible improvements in cash flow management, inventory turnover, and supply chain stability.