One out of every five sweaters globally comes from Dalang, a small town in Dongguan, Guangdong. This industrial cluster now boasts a full-chain annual transaction value exceeding 72 billion yuan, with garment output surpassing 900 million pieces annually. At the recently concluded 95th International Wool Textile Conference, Dalang was repeatedly cited as a living case study of how Chinese wool textiles integrate into global supply chains.
Background
The conference, themed 'Smart Weaving the Future: Wool Health and Digital Life,' directly addressed the two main transformation axes of the wool industry: digitalization and health-orientation. Sun Ruizhe, President of the China National Textile and Apparel Council, revealed in his keynote that R&D spending intensity among China's textile enterprises above designated size rose from 1% at the end of the 13th Five-Year Plan to 1.3% in 2024. The industry's digitalization rate in key processes reached 63.2%, higher than the national manufacturing average. This signals that wool textiles are shedding their traditional labor-intensive image, adopting AI quality inspection, digital design, and industrial internet platforms.
Dalang's output figures underscore the power of openness and clustering. Yet the industry is not without headwinds: from January to May 2025, China's textile and apparel exports totaled US$116.73 billion, a mere 0.1% year-on-year increase, with garment exports falling 1.6%. Domestic demand, however, showed relative strength, with retail sales of garments, hats, and footwear by units above designated size rising 8.1% year-on-year. This divergence is reshaping market strategies for wool textile firms.
Industry Impact
Digitalization's penetration into wool textiles has moved from concept to practice. For instance, Jiangsu Yueda Textile, a 'Lighthouse Factory,' reduced labor per 10,000 spindles by about 70% through smart manufacturing, while boosting total labor productivity fourfold and cutting unit energy consumption by 15%. Semir's AI-assisted design system improved overall design efficiency by 35% and pattern design efficiency by over 200%. These cases show digitalization is no longer a luxury but a hard tool for cost reduction and efficiency gains.
Meanwhile, the experience economy is rewriting consumption logic. Consumers' demands for health, emotional connection, and self-expression are pushing wool products from mere warmth to a 'health plus digital life' proposition. Sun emphasized that global consumer markets are experiencing ecological restructuring, a return to human-centric values, and structural divergence. This means wool enterprises must move beyond fabric or garment production to build a full value chain from raw materials to end-user experience.
Challenges remain significant. The IMF has downgraded global growth expectations to 3.1%, while geopolitical conflicts, energy volatility, and shipping disruptions continue to pressure export-oriented firms. From January to April, revenue of textile enterprises above designated size edged down 0.3% year-on-year, though total profit rose 19.3%, with a profit margin of only 2.9%—a sign of revenue growth not translating into proportional profit gains.