China's wool textile industry posted a seemingly balanced but structurally revealing performance in early 2026. Customs data shows that from January to May, total trade in wool raw materials and products reached $6.06 billion, up 8.16% year-on-year. Exports stood at $4.35 billion, growing just 2.29%, while imports surged 27.35% to $1.71 billion—12 times faster than export growth. This divergence signals a shift from export-led growth to a dual domestic-international circulation model.
Exports: Emerging Markets Take the Baton, Intermediates Drive Growth
Export growth slowed, but the market composition is being reshaped. Traditional European and American orders remained stable, but incremental gains came from emerging textile manufacturing countries like India and Turkey. Exports to India surged 40.19% to $76 million, while those to Turkey rose 24.89% to $41.46 million. The common driver was wool top: cumulative exports of 13,300 tons worth $178 million, up 21.68% year-on-year, making it the largest single product.
This means India and Turkey are absorbing global textile capacity transfers, requiring large volumes of intermediates (wool top) to process into yarns or fabrics for re-export to Western markets. For Chinese wool companies, this is both an opportunity and a subtle shift in the value chain—from finished product exporter to upstream material supplier.
Cashmere products also shined, growing 6.97%, outpacing wool products' 5.11%. Finished goods like knitted sweaters and worsted fabrics saw steady demand. Notably, exports to Vietnam and Italy fell in volume but rose in value, indicating a shift from volume to value, with higher-priced products gaining traction.
Imports: Raw Material Buying Spree Reflects Capacity Expansion and Consumption Upgrade
Import data is the most telling signal in this trade report. The $1.71 billion import total included $127 million for cashmere raw materials and products, up 44.61% year-on-year. Wool raw material imports also surged, with companies stockpiling premium Australian and South African wool. The immediate cause is higher operating rates in domestic wool processing, but the deeper logic is more compelling.
First, domestic consumption recovery is transmitting upstream. Imports of high-end cashmere fabrics and garments rose in both volume and price, indicating that demand for premium wool products has become a necessity. Second, technological upgrades and capacity expansion in the wool industry are boosting raw material digestion. Third, rising international wool prices prompted companies to lock in supplies early, creating a mini buying frenzy.
Whether this import surge continues depends on two variables: the actual arrival of autumn/winter orders and raw material price trends. With the peak overseas procurement season yet to fully materialize, imports are likely to stay elevated.
Industry Impact: Dual Circulation Emerges, but Risks Loom
The double-digit growth in both exports and imports masks a narrowing trade surplus. If raw material costs keep rising while export prices cannot adjust upward, profit margins will be squeezed from both ends.
For industrial clusters in Zhejiang, Jiangsu, and Hebei, companies face a dilemma: either integrate upstream to control raw material costs, or move downstream to secure pricing power through high-end products. Leading firms are leaning toward the latter, developing differentiated wool fabrics and functional cashmere products to cement their irreplaceability in global supply chains.
For smaller players, risks are greater. Rising import costs and fragmented export orders demand stronger capital turnover and customer development capabilities. Without strategic adjustments, they risk being weeded out amid the macro narrative of 'double growth.'