In the first four months of 2026, China's textile industry delivered a mixed picture: domestic demand and investment rebounded, while external demand remained under pressure. According to public data from the China National Textile and Apparel Council (CNTAC), industrial value-added grew by 4.1% year-on-year, fixed-asset investment expanded to 7.8%, but export delivery value only inched up 0.9%.
Domestic Demand Recovery
National Bureau of Statistics data shows that retail sales of garments, footwear, hats, and knitwear above a certain scale grew 5.6% YoY in Jan-Apr 2026, accelerating 1.2 percentage points from the same period last year. E-commerce penetration continued to rise, with livestreaming and instant retail contributing about 30% of the incremental growth. This indicates that end-consumer confidence is recovering, particularly in tier-2 and tier-3 cities and lower-tier markets where seasonal replacement demand has been released. For fabric and garment suppliers, the stability of domestic orders is improving, but attention must be paid to channel inventory turnover—many brands still operate a 'small-order, fast-replenishment' model, requiring greater flexibility in delivery schedules.
Investment Shift to Central and Western Regions
Fixed-asset investment grew 7.8%, far outpacing industrial value-added growth, signaling structural adjustment. Capital flows are concentrated in new chemical fiber materials, green dyeing and finishing upgrades, and textile industrial parks in central and western regions. New production capacity in Xinjiang, Henan, and Anhui now accounts for over 40% of the national total, up from 30% three years ago. This migration not only reduces overall production costs but also shortens logistics routes to Central Asian and European markets. However, for established eastern clusters like Shengze and Keqiao, existing capacity faces upgrade pressure—automation rates and energy consumption metrics have become competitive differentiators.
Export Pressure but Structural Improvement
Total textile and apparel exports in Jan-Apr 2026 grew only 0.9% YoY, well below the five-year average of around 4%. The main drag came from apparel exports to Europe and the US, which fell 2.3%, while textile exports (yarn and fabric) to ASEAN, the Middle East, and Africa maintained over 7% growth. This confirms the trend of supply chain decentralization—brands are shifting some garment orders to Vietnam and Bangladesh, but China's position as a core upstream fabric supplier remains solid. The average export unit price rose 3.1%, with higher shares of high-count high-density fabrics, functional coated textiles, and recycled fiber products, indicating a shift from volume growth to quality improvement.
Profit Improvement but Cost Pressures Persist
Industry main business revenue rose 4.5%, and total profit increased 8.2% YoY, with profit margin improving 0.3 percentage points to 5.1%. The improvement was mainly driven by lower raw material costs (PTA and polyester staple fiber prices dropped about 5% YoY) and product mix upgrades. However, SMEs (annual revenue below RMB 20 million) saw profit margins of only 2.8%, far below the industry average. Rising labor costs (+6.5% YoY) and environmental compliance investments (+12%) are the main erosive factors. Surveys in the Nantong home textile cluster show SME capacity utilization at around 75%, compared to 90% for leading enterprises, indicating deepening divergence.