In the first four months of 2026, the textile industry's core indicators continued to grow, but the pace generally slowed compared to the same period last year. The industrial value-added grew by 4.2% year-on-year, down 1.3 percentage points from 2025. Fixed asset investment growth fell to 5.8%, while retail sales increased by only 2.9%. Exports of textiles and apparel reached $89.8 billion, up 3.1%, but the growth rate declined from 4.5% in the first quarter. These figures point to a shift from 'recovery growth' to 'structural adjustment.'
Upstream vs. Downstream: Widening Growth Gap
Output of chemical fiber and yarn grew by 6.7% and 4.1%, respectively, significantly outpacing terminal apparel (2.3%) and home textiles (1.8%). This suggests intermediate goods inventories are building up. In textile hubs like Shengze and Keqiao, the average inventory turnover period for grey fabrics has extended from 18 days to 24 days since the start of the year.
Profit margins are under pressure. Revenue of textile enterprises above a designated size increased by 3.5%, but total profits rose by only 0.9%, with the profit margin dropping from 4.8% to 4.3%. Raw material costs for PTA and ethylene glycol rose by about 8% due to international crude oil fluctuations, while terminal garment prices increased by only 1.2%, squeezing processing profits.
Export Markets: Steady Traditional Orders, Emerging Markets Rising
Customs data shows exports to the EU and the US grew by 2.1% and 1.8%, respectively, stable but below expectations. The bright spots are Southeast Asia and the Middle East, with exports to Vietnam and Indonesia up 12.4%, and to Saudi Arabia and the UAE up 9.7%. This reflects the deepening 'China+N' supply chain strategy, where Chinese fabrics are exported as intermediate goods for overseas garment processing to benefit from tariff advantages.
Notably, exports of chemical filament fabrics to ASEAN surged by 18.3%, far outpacing cotton fabrics (4.2%). Functional and differentiated products are becoming new export engines, while substitution pressure on conventional cotton textiles is confirmed by capacity expansions in Bangladesh and India.
Domestic Demand and Policy: Balancing Employment and Consumption
Retail sales of apparel, footwear, hats, and knitwear grew by only 2.9%, lagging behind total retail sales (4.7%), indicating cautious consumer spending on non-essentials. However, sales through live-streaming and social e-commerce channels maintained growth above 15%, exacerbating operational difficulties for traditional wholesale markets.
On the policy front, the '15th Five-Year Plan for Implementing the Employment Priority Strategy' explicitly supports stable employment in the textile industry. Subsidies for social insurance or job retention for labor-intensive firms are expected in the second half of the year. Additionally, 80 new textile standards, including green fiber evaluation and recycled polyester grading, take effect on July 1, accelerating industry consolidation and potentially eliminating non-compliant small capacity faster than expected.