How ready are Chinese companies for overseas due diligence requirements, and what comes next?
As the EU’s Omnibus I amendment directive has been approved and entered into force on 18 March 2026, the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) now moves into the implementation phase. At the same time, mandatory human rights and environmental due diligence (mHREDD) and disclosure requirements are expanding across the market. Companies, in the EU and beyond, now need to move from monitoring developments to practical readiness. This urgency has come to the surface in the complex wave of supply chain management.
Supported by amfori as well as other brands, research led by the Office of the Social Responsibility of the China National Textile and Apparel Council (CNTAC) shows both a capability gap and a strong appetite to close it in the Chinese textile, apparel and light industries. It finds that many businesses remain at a preliminary stage with a lack of clarity on core legislative requirements, their own scope of responsibilities, and actual business impacts.
From debate to day-to-day delivery
When ESG due diligence officially becomes an emerging regulatory trend, what matters most is the implementation stage. This raises the question: can teams run a consistent, effective and actionable approach across procurement, legal, compliance, and sustainability?
The research suggests many Chinese businesses in the textile, apparel and light industries are not yet operating at that level. Nearly two-thirds of enterprises had not begun assessing the potential impact of overseas due diligence legislation. Among these respondents, nearly 70% had not read the full text of the relevant legislation and were unclear about the potential legal consequences of non-compliance.
This is more than a general awareness issue. It points to a gap in internal mechanisms and agenda setting, so legal expectations do not translate into concrete plans.
Confusion is already costing money
Rising compliance cost is another common concern, and the report highlights the drivers in clear terms: supply chain scrutiny, risk identification, information disclosure and technology upgrades. It also notes that uncertainty leads to “repeated adjustments and trial-and-error”, and this has added another layer to the financial burden.
The figures reinforce this message. Rising costs are identified as a primary pressure point by almost 65% of Chinese businesses. More than 60% say a lack of clear guidance significantly impedes understanding and implementation. At the operational level, over 70% perceive that overseas due diligence legislation has increased the difficulty and complexity of supply chain management, and around 75% describe cost escalation as one of the most direct consequences.
When requirements are unclear or when buyers interpret them in different ways, suppliers spend more on rework and coordination. That makes compliance more expensive, without making it more effective.
Collaboration is the missing piece
The report shows that implementation difficulties do not sit with suppliers alone.
Nearly 80% of businesses in the Chinese textile, apparel and light industries say they need additional support to understand and comply with overseas due diligence legislation, and 77% are willing to participate in training or seminars. More than 90% mention interpretation and training on laws and regulations as the most needed support, followed by due diligence tools and methods at close to 80%.
It is a call for buyer–supplier cooperation that turns legal expectations into workable routines, supported by shared tools, capacity building and, where needed, technical or financial assistance.
What practical readiness should look like
While there are daunting challenges ahead, the report itself points to the path ahead: clearer interpretation, detailed guidance, and more training and dialogue that help Chinese enterprises establish unified procedures.
It also provides a useful behavioural insight into what triggers action with a regression analysis. After controlling for key factors, enterprises that have read the relevant provisions of the CSDDD or other due diligence legislation are 4.66 times more likely to initiate an impact assessment.
The implication is not to ask everyone to read the legislation. The implication is that implementation works best when legal expectations are translated into simple, repeatable steps that business teams can run and suppliers can understand. That is how you reduce trial-and-error, and that is how you shift effort from paperwork towards real risk management.
Closing remarks
This research shows both the friction points and the direction: clarity, tools, and training, backed by buyer–supplier collaboration.
Scale will come faster if companies reduce duplication and use approaches that are already recognised across the market. That is exactly where amfori BSCI delivers value: a common framework that aligns with international standards to help turn ESG due diligence from paperwork into concrete actions in supply chain risk management.
The next step is collective: align expectations, share evidence, and build capability so that ESG due diligence becomes a routine that is practical and credible.
For more information, you can download the report (only available in Chinese) via this link.
