The latest customs data for the first half of 2026 shows China's textile and apparel exports reached $145.96 billion, a modest 1.4% year-on-year increase. While not spectacular, this stability at a historically high level amid global inflation and geopolitical turmoil underscores the resilience of China's textile supply chain. The real story lies in the structural divergence: upstream textile exports grew 3.5%, while apparel exports fell 0.7%, a widening gap that demands attention.
June Rebound: Autumn-Winter Stocking Begins, but Seasonal Factors Mask Long-Term Divergence
June witnessed a stronger-than-expected rebound, with monthly exports reaching $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month. This surge was primarily driven by overseas autumn-winter stocking. Textile exports hit $13.52 billion, up 12.2% year-on-year, while apparel exports reached $15.75 billion, surging 21% month-on-month. In RMB terms, June exports totaled 200.25 billion yuan, with the fabric sector performing particularly well.
However, over the six-month horizon, structural divergence is stark. Textile exports stood at $73 billion, up 3.5%, while apparel exports were $72.96 billion, down 0.7%. This signals a shift in overseas brand procurement strategies: they are reducing long-term garment orders and instead placing frequent orders for yarns and fabrics as semi-finished goods, dispersing final assembly globally. China's upstream supply chain completeness and delivery efficiency make these intermediate goods hard to replace.
Market Disparity: U.S. Shines as Top Growth Driver, EU and Japan Cool
A breakdown of export destinations for the first five months reveals a fragmented global demand landscape. The U.S. market stood out, with growth in textile and apparel imports from China expanding 15 percentage points year-on-year. The positive signals from the U.S.-China summit, coupled with completed inventory destocking by overseas brands, led to increased procurement from China's supply chain.
In contrast, traditional mature markets like the EU, Japan, and South Korea continued to weaken. The EU struggles with high energy costs and inflation, dampening consumer apparel spending. ASEAN, Japan, and South Korea face constraints from regional tensions and rising energy prices, reducing imports from China. The temporary easing of Middle East tensions and lower shipping costs were short-term positive factors for June's export recovery, but their sustainability remains questionable.
Upstream Resilience vs. Garment Pressure: Two Sides of the Supply Chain Advantage
Detailed data for the first five months highlights the contrasting fortunes of upstream and downstream sectors. Yarn exports grew 6.6% year-on-year, fabric exports fell only 0.5%, and finished textile products rose 2.6%. However, apparel and clothing accessories exports declined 1.6%. This comparison is telling: China's textile supply chain moat lies upstream, with integrated capabilities from chemical fibers, spinning, dyeing, to finished products that are hard for other regions to replicate.
But garment OEM has lower barriers to entry, facing intense international capacity relocation and price competition. Capacity in Southeast Asia and South Asia is expanding rapidly, with some brands shifting orders away. Chinese garment factories face compressed profit margins, a trend unlikely to reverse soon. For buyers, this means upstream fabric and intermediate goods offer more stable supply, but garment OEM will see fiercer price competition.
Outlook: External Challenges Remain, but Industry Foundation Supports Stability
Looking ahead to the second half of the year, the global trade environment remains complex. The World Bank warns of triple pressures from rising energy prices, high inflation, and tightening monetary policies, with weak recovery in European and U.S. consumer demand. China's textile and apparel exports face multiple challenges in stabilizing volume and optimizing product mix. However, backed by a complete supply chain and product innovation capabilities, the industry's foreign trade foundation remains solid enough to support stable operations.