In the first half of 2026, China's textile and apparel exports posted a mixed performance. According to customs data, total exports reached $145.96 billion, up 1.4% year-on-year. However, a clear divergence emerged: textile exports grew 3.5% to $73 billion, while apparel exports edged down 0.7% to $72.96 billion. This indicates that profit is shifting upstream, while the apparel OEM sector continues to face pressure.
June Export Rebound: Winter Stocking and Falling Shipping Costs
June data became the highlight of the half-year. Monthly exports hit $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month. Textile exports reached $13.52 billion, up 12.2% year-on-year; apparel exports were $15.75 billion, up 3.2% year-on-year and surging 21% month-on-month. The rebound was driven by the start of overseas winter stocking and a temporary easing of Middle East tensions, which lowered shipping costs.
In RMB terms, cumulative exports for the first half were 1.012 trillion yuan, down 2.2% year-on-year, reflecting exchange rate pressure. However, June exports hit 200.25 billion yuan, with both year-on-year and month-on-month growth, especially in the fabric sector.
U.S. Market as Biggest Growth Driver, EU and Japan Lag
Data for the first five months shows the U.S. market as the largest growth driver. China's textile and apparel exports to the U.S. expanded their growth rate by 15 percentage points compared to the same period last year. The stabilization of bilateral relations and the completion of inventory destocking by overseas brands boosted procurement.
In contrast, demand from the EU, Japan, and South Korea weakened. The EU faces high energy costs and inflation, reducing consumer spending on clothing. ASEAN, Japan, and South Korea are also constrained by regional tensions and rising energy prices, leading to reduced imports from China. This uneven demand pattern requires exporters to reallocate resources toward growing markets.
Upstream Resilience, Apparel OEM Faces Structural Challenges
Sub-sector data for the first five months reveals stark differences. Yarn exports grew 6.6% year-on-year, while fabric exports edged down only 0.5%. Textile products exports rose 2.6%. In contrast, apparel and accessories exports fell 1.6%.
The reason: overseas brands are adopting low-inventory strategies, reducing large apparel orders and instead frequently purchasing semi-finished products like yarn and fabric. China's complete industrial chain—from chemical fiber, spinning, dyeing to finished products—offers delivery efficiency and quality that competitors cannot easily replicate. This underpins upstream growth. Apparel OEM, with lower entry barriers, faces capacity diversion to Southeast Asia and intense domestic price competition, a situation unlikely to change soon.
Challenges and Direction for the Second Half
The World Bank warns of continued pressure from high energy prices, inflation, and tight monetary policy globally. Weak consumer recovery in Europe and the U.S., rising production costs, and fragmented global trade patterns will test the industry.
However, the June rebound points the way forward. The era of low-cost, high-volume exports is over. A complete industrial chain, product innovation, and diversified global presence are key. Upstream fabric companies should seize the window for semi-finished product orders and develop high-value-added items. Apparel OEMs need to shift to OEM+ODM models, enhancing design and R&D capabilities to avoid pure price competition.