17 Industry Associations Jointly Release New Domestic Trade Guidelines: Textile Sector's Payment Term Woes May Be Alleviated

When the total retail sales of consumer goods exceeded 50 trillion yuan in 2025, with over 180 million business entities, the scale of domestic trade was undeniable. Yet on the flip side, persistent issues like irregular transactions, excessively long payment terms, and difficult receivables remain submerged hazards in the market's deep waters. On May 8, the joint release of the 'Domestic Trade Transaction Guidelines (Trial)' by 17 national industry associations directly targeted these pain points—especially the widespread 'payment term anxiety' in the textile sector.

New Rules: Reshaping the Chain from Contract to Receivables

The Guidelines, guided by ministries including Commerce, NDRC, Justice, and Cyberspace Administration, involve key textile-related organizations such as the China National Textile and Apparel Council, China Textile Commerce Association, and China Chamber of Commerce for Textiles. Their core is standardizing the entire transaction chain: from contract formation and goods delivery/inspection to payment terms and commercial conduct. For the textile industry, this means the flexible transaction model often reliant on verbal agreements or vague clauses will face a more binding institutional framework.

Textile's Payment Term Dilemma: Data Behind Industry Pain

The textile industry is capital-intensive with a long chain, from raw material procurement and grey fabric production to dyeing, printing, and garment manufacturing. Industry data shows average payment terms range from 60 to 120 days, with some small to medium fabric suppliers facing over 180 days. With the total circulation of production materials approaching 100 trillion yuan in 2025, the resulting bad debts and capital lock-up directly squeeze profit margins. Midstream weaving and dyeing companies often bear the brunt of dual payment pressures from both upstream and downstream. The new rules aim to provide an institutional exit for this 'debt triangle' dilemma.

Industry Impact: How Standardization Transmits to Sourcing and Production

For textile factories and fabric buyers, the most direct change will be a redistribution of transaction costs. Previously, to mitigate receivables risk, suppliers often raised prices to offset payment term losses, while buyers favored longer terms to optimize cash flow. This game ultimately inflated the entire supply chain's hidden costs. The Guidelines' clear stipulations on payment terms are expected to push both parties back to more transparent pricing logic, stripping capital costs from prices. This means companies with strong cash flow management and good credit records will gain greater bargaining power, while those relying on delayed payments face elimination pressure.

Practical Recommendations

For Buyers - Review existing procurement contracts for payment terms against the new standards to avoid disputes from ambiguous clauses. - Prioritize suppliers with healthy cash flow and shorter payment cycles, incorporating their credit history as a core evaluation metric. - Establish standardized goods inspection procedures leveraging the new rules' clarity on acceptance, reducing payment delays due to quality disputes.

For Foreign Trade Enterprises - The separation of domestic and foreign trade management may need adjustment; the new rules' boost to domestic standardization will enhance supply chain coordination for firms integrating both markets. - Pay close attention to the guidelines on commercial conduct, especially regarding anti-bribery and fair competition, crucial for firms pivoting from export to domestic sales. - Use the new transaction standards as a reference point in negotiations with overseas clients, demonstrating the standardization level of the domestic market to build confidence.