In the first four months of 2026, the textile industry's operational data reveals a subtle tension—a broad slowdown in growth alongside resilience in certain segments. According to data from the Industrial Economics Research Institute of the China National Textile and Apparel Council, the industrial value-added of textile enterprises above designated size grew by 2.8% year-on-year, down 1.2 percentage points from the same period last year. Fixed asset investment growth also narrowed, with textile industry investment rising only 1.5%, while garment and chemical fiber manufacturing investment fell 0.8% and grew 3.2%, respectively.
Structural Divergence Behind the Data
The export side is particularly noteworthy. Total textile and apparel exports in the period increased marginally by 0.9%, but textile exports fell 1.3% while apparel exports rose 2.5%. This divergence reflects a shift in global final demand toward garments, while intermediate fabric trade faces inventory destocking pressure. By major market, exports to ASEAN maintained positive growth, but those to Europe and the US fluctuated, with a clear trend toward order fragmentation.
On the domestic front, retail sales of apparel, footwear, and knitwear in units above designated size rose 3.6% year-on-year, outpacing overall social retail growth, but slowing from 5.2% a year earlier. Online channels continued to lead growth, but offline brick-and-mortar stores saw slower-than-expected recovery, particularly in third- and fourth-tier cities facing declining store efficiency.
The chemical fiber sector was the biggest highlight. Output grew 8.1%, with polyester filament yarn production surging 9.3%, supported by sustained high operating rates in downstream weaving. However, the chemical fiber price index fell 4.2%, and raw material PTA price volatility squeezed profit margins. Industry profit margins dropped from 3.8% to 3.1%, and the number of loss-making enterprises increased by 12%.
Uneven Climate Across Industrial Clusters
Regional industrial clusters showed clear divergence in business conditions. Traditional fabric bases like Keqiao in Shaoxing and Shengze in Wujiang saw order volumes flat year-on-year, but profits generally declined 5-8 percentage points due to high raw material costs and downstream price pressure. Nantong's home textile cluster benefited from e-commerce livestreaming channels, with retail growth of about 7%, but wholesale margins were eroded by logistics and return costs.
Guangdong's denim cluster saw export orders fall 4%, partly due to weak overseas demand and partly due to order migration to low-cost regions like Vietnam and Bangladesh. In contrast, Fujian Jinjiang's sportswear and footwear chain maintained stable growth, with exports up 5.2%, reflecting sustained health consumption trends.
Xinjiang's cotton textile cluster performed steadily, with yarn output up 3.5%, but high-count yarn export share declined due to international brand sourcing policies, shifting to increased domestic supply of pure cotton and blended varieties. Overall industry operating rates were around 78%, down from 82% a year earlier.
Policy and Cost Dynamics
On the policy front, the National Development and Reform Commission and the Ministry of Industry and Information Technology recently promoted a digital transformation pilot in the textile industry, implemented in areas like Linping. The pilot focuses on AI production scheduling and intelligent fabric inspection, with initial participants reporting a 3-5 percentage point improvement in yield rates. However, due to capital and talent constraints, SME participation is below 20%.
Cost pressures continue to mount. Cotton prices rebounded after hitting a low in March, rising 4.8% from the start of the year by April, but yarn prices only followed with a 2.1% increase, severely compressing spinning margins. PTA prices, influenced by international oil prices, fell 3.6% month-on-month in April, but downstream polyester filament prices fell even more, extending inventory turnover days for chemical fiber companies to 22 days.
Labor costs continue to grow at 8-10% annually, with hiring difficulties peaking after the Chinese New Year. Bortala Prefecture established cross-regional labor cooperation mechanisms, but temporary subsidies only alleviate short-term gaps, and long-term automation remains the key to breaking the deadlock.