One out of every five sweaters in the world comes from Dalan, Dongguan. This woolen knitting town in the Greater Bay Area hosted the 95th International Wool Textile Conference in late June. Data released at the conference deserves industry-wide attention: Dalan's annual garment output exceeds 900 million pieces, with the entire industry chain transaction volume surpassing 72 billion yuan. Behind these figures lies what Sun Ruizhe, President of the China National Textile and Apparel Council, called 'certainty'—at a time of heightened global supply chain volatility, China's textile industry is leveraging its scale and system advantages to provide a stable supply anchor for the global market.
Scale Advantage Meets Transition Pressure
China's textile industry remains the undisputed global leader in scale. Public data shows that China's annual fiber processing volume exceeds 60 million tons, with annual garment production exceeding 70 billion pieces, accounting for over 50% of global totals. On the export front, intermediate goods such as chemical fibers and fabrics account for a significant share of the over $300 billion in annual exports for six consecutive years. This means China is not just a manufacturer of end products but also a core supplier of upstream materials in the global textile supply chain.
However, structural transition pressures lurk beneath the scale. From January to April 2025, revenue of textile enterprises above designated size fell 0.3% year-on-year, but total profit surged 19.3%, with an operating profit margin of 2.9%. Profit growth far outpacing revenue growth indicates that the industry is shifting from 'quantity' expansion to 'quality' improvement—high-value-added products, digital management, and brand premiums are becoming new profit sources. During the same period, retail sales of garments, shoes, hats, and knitwear by units above designated size increased 8.1%, showing strong resilience in the domestic market.
Investment data reveals a divergence within the sector. From January to May 2025, fixed asset investment in the textile industry grew 10.8% year-on-year, but investment in the garment and chemical fiber sectors fell 10.3% and 14.5%, respectively. Investment in the textile sector is primarily directed toward intelligent transformation and green technology upgrades, while the garment and chemical fiber sectors face dual pressures of overcapacity and shifting demand structures.
Intelligent Economy: From 'Machines Replacing People' to 'AI Replacing Brains'
The conference theme 'Smart Weaving the Future' is not an empty slogan. Public case studies show AI penetrating the entire textile chain. Jiangsu Yueda Textile's 'Lighthouse Factory,' through intelligent manufacturing, reduced the number of workers per 10,000 spindles by about 70%, increased total labor productivity by more than four times, reduced unit energy consumption by 15%, and lowered processing costs by 26%. Semir's AI-assisted design system increased overall design and development efficiency by 35%, with pattern design efficiency improving by over 200%. Bosideng's 'AI Aesthetic Brain' reduced sample development costs by over 60%.
These cases point to a core trend: AI is no longer just optimizing a single link but is restructuring the cost structure and competitive logic of the textile industry. Traditionally, competitive advantages came from labor costs, scale effects, and supply chain responsiveness. Now, computing power, data, and algorithms are becoming new production factors. When 'digital employees' can be deployed in batches and 'tokens' become efficiency metrics, a company's core competitiveness shifts from 'how much fabric can you weave' to 'how much data can you process.'
For buyers, this means the criteria for supplier selection are fundamentally changing. In the past, capacity, price, and delivery time were key. In the future, digital maturity, AI application depth, and data asset governance capability will be equally important. Companies that have completed intelligent transformation will gain overwhelming advantages in flexible production, rapid sampling, and small-batch customization.
Experience Economy: Consumption Stratification Reshapes Supply Chains
Running parallel to the intelligent economy is the rise of the experience economy. The global consumer market is undergoing ecological restructuring: clear trends toward consumer stratification, with health, emotional connection, and self-expression becoming core demands. As a natural fiber, wool perfectly aligns with current consumer pursuits of sustainability, health, and quality of life. The conference theme combining 'wool health and digital life' precisely points to the breakthrough direction for the wool textile industry—using digital technology to empower natural fibers and revitalize traditional categories.
This trend has profound implications for supply chains. Large-scale standardized production is no longer the norm; small batches, multiple styles, and fast delivery are becoming standard. Social media's information dissemination speed has shortened the cycle from product explosion to obsolescence to weeks. This requires supply chains to have extreme responsiveness and flexible adjustment capabilities. China's textile industry's investment in digitalization—with a digitalization rate of 63.2% in key links, higher than the national manufacturing average—provides the infrastructure for such rapid response.
A New Industry Paradigm Amid Global Change
The IMF has lowered its global economic growth forecast for 2026 to 3.1%, with persistent risks from geopolitical conflicts, energy volatility, and shipping disruptions. In this context, the stable development of China's textile industry is of great significance to the global supply chain. But stability does not mean stagnation. Sun Ruizhe proposed in his speech that the industry needs to find a fulcrum for value creation and a path to breakthroughs. That fulcrum is the new growth space at the intersection of the intelligent economy and the experience economy.
Looking at export data, from January to May 2025, textile and apparel exports grew 0.1% year-on-year, with textile exports (mainly fabrics, yarns, and other intermediate goods) growing 1.7% and apparel exports falling 1.6%. The growth in textile (intermediate goods) exports indicates that China's role as a global 'raw material bank' for textiles is strengthening. The slight decline in apparel exports reflects the ongoing shift of final manufacturing to Southeast Asia. This 'strong intermediates, weak end-products' structure means China's textile industry needs to extend to both ends of the value chain: upstream toward high-performance fibers and functional fabric R&D, and downstream toward branding, design, and channel development.