China-ASEAN bilateral trade surpassed the trillion-dollar mark for the first time in 2025, reaching USD 1.05 trillion with a year-on-year growth of 7.4%. In 2026, the momentum not only continued but accelerated—trade in the first seven months hit USD 744.41 billion, up 24.7% year-on-year, accounting for 21.8% of China's total foreign trade. For the textile industry, this means a larger and faster-flowing regional market is taking shape, and upstream suppliers of yarn and fabric are among the most direct beneficiaries.
The Industrial Logic Behind the Data
Customs data reveals a clear growth curve: in January-February 2026, China's textile and apparel exports to ASEAN reached USD 7.96 billion, up 19.1% year-on-year. Exports to Cambodia and Malaysia surged by 40.5% and 40.3% respectively, far exceeding the average. Notably, exports of intermediate goods such as yarn and fabric reached USD 4.49 billion, up 18%, growing almost in sync with finished products. This suggests that ASEAN's dependence on Chinese upstream textile inputs is not short-term order-driven but embedded in the rigid demand of local garment processing capacity—as long as local factories operate, Chinese yarn and fabric will keep flowing in.
A deeper signal lies in the stability of trade structure. China has been ASEAN's largest trading partner for 17 consecutive years, and ASEAN has been China's largest for six years, with mutual dependence rising. This reciprocal relationship makes textile flows more than one-way exports; it forms a closed loop of 'China supplies raw materials, ASEAN makes garments, and some finished goods return to China or are re-exported globally.' For domestic fabric suppliers, this means lower order volatility than in other single markets, because once ASEAN garment capacity expands, procurement of upstream materials tends to be sustained.
Resilience and Challenges of Regional Division
In the first half of the year, China's textile and apparel exports to ASEAN totaled USD 25.4 billion, with June showing a significant rebound in growth and improvement month-on-month. Behind this resilience is the efficiency advantage formed by years of regional supply chain collaboration. China's large-scale capacity in chemical fibers and cotton spinning, combined with ASEAN's comparative advantages in labor costs and tariff preferences, constitutes a combination that is difficult for other regions to replicate simply. For instance, garment factories in Vietnam and Cambodia rely heavily on Chinese high-count yarn and functional fabrics, and it is hard to find equally cost-effective substitutes in the short term.
But resilience does not mean no concerns. The divergence in growth rates deserves attention: the explosive growth in Cambodia and Malaysia coexists with single-digit growth in some other ASEAN countries, indicating that the market is not monolithic. Differences in industrial policies, infrastructure, and labor supply across countries mean that a 'one-size-fits-all' Southeast Asia strategy could face the risk of slowing growth by 2027. Moreover, as bilateral trade volume grows, some countries are beginning to pay attention to trade deficits and localization requirements, and future adjustments to rules of origin or tariffs cannot be ruled out, which would directly affect the cost advantage of the 'Chinese materials + ASEAN processing' model.