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Corporate Update

A Traceability Tango: China Tightens, Europe Demands More

• By  Textile Excellence
• June 15, 2026

Fashion companies sourcing from China may soon find themselves caught between two very different sets of rules.

China has introduced new regulations that give the government greater control over supply chain information. At the same time, the European Union is demanding more transparency from companies through stricter due diligence and forced labour requirements.

The result is a growing compliance dilemma for global brands.

China's newly approved State Council Decree 834 treats supply chain information as a matter of national security. This could restrict the collection, sharing and transfer of certain supplier-related data by foreign companies operating in the country.

However, European regulations are moving in the opposite direction. Companies selling in the EU are increasingly being required to map their supply chains, conduct detailed supplier audits and gather information not only from direct suppliers but also from lower tiers of the value chain.

In simple terms, Europe is asking brands to look deeper into their supply chains, while China may limit how much information they can access and share.

This creates a difficult balancing act for fashion and footwear companies with manufacturing operations in China. Businesses may face situations where complying with one set of rules could make it harder to comply with the other.

Legal experts have warned that such "compliance conflicts" could become more common as governments introduce overlapping regulations with different objectives.

For the fashion industry, the issue goes beyond paperwork. Supply chain transparency has become a business necessity, but the rules governing access to that information are becoming increasingly complex.

Legal experts have warned that such "compliance conflicts" could become more common as governments introduce overlapping regulations with different objectives. For the fashion industry, the issue goes beyond paperwork. Supply chain transparency has become a business necessity, but the rules governing access to that information are becoming increasingly complex.