The best and most reputable place in Beijing to buy fabric is at the market in Muxiyuan. It's easy to get lost in this enormous material market which sells fabrics of course (silk, cashmere, cotton, velvet, real and fake fur etc), but accessories as well (buttons, zips etc). It is essential though, to search for the best quality. Prices are reasonable, but think about bargaining.
Haihutun, South of Muxiyuan Qiao on Nansahuan Lu (at the 1st red light, turn left after the bridge, 200m after the bus stop), Fengtai District. 木樨园纺织品市场,丰台区海户屯南三环路木樨园桥南(过桥之第一个红绿灯左转过了公共汽车站200米).