China’s new supply chain law puts fashion brands under compliance pressure

A new Chinese supply chain security law that took effect in April 2026 is creating major compliance challenges for global fashion brands operating in China.

Under State Council Decree No. 834, supply chain investigations, audits, questionnaires, and information gathering activities could face regulatory scrutiny if considered sensitive under Chinese law.

The regulation directly clashes with growing Western compliance requirements, including forced labor, ESG, and supply chain transparency rules under the EU CSDDD and US UFLPA, particularly affecting the apparel and cotton sectors.

Industry experts warn brands are now caught between conflicting Chinese and Western regulations as China continues to account for around 40 percent of global textile and apparel exports.