In the first half of 2026, China's textile and apparel foreign trade recorded a total of $145.96 billion, up 1.4% year-on-year. While the headline figure appears stable, a closer look reveals stark divergence between upstream and downstream: textile exports reached $73 billion, up 3.5%, while apparel exports stood at $72.96 billion, down 0.7%. The two segments are nearly equal in scale but moving in opposite directions.
Structural Divergence: Upstream Resilience, Downstream Pressure
The growth gap between textiles and apparel widened to 4.2 percentage points. Upstream intermediates such as yarn and fabric saw exports rise 6.6%, while apparel and clothing accessories fell 1.6%. The underlying logic is clear: overseas brands are shifting to low-inventory operations, reducing large long-term apparel orders and increasing high-frequency purchases of semi-finished products. China's complete industrial chain—from chemical fiber, spinning, dyeing to finished products—provides irreplaceable delivery efficiency and quality assurance, underpinning the sustained growth of upstream categories.
In contrast, the garment OEM track has low entry barriers, with international capacity diversion and price competition becoming acute. Capacity substitution from Southeast Asia and South Asia continues to gain traction, making the long-term pressure on China's apparel exports difficult to reverse in the short term. For buyers, this means upstream supply chains are more stable, while downstream apparel requires more cautious order planning.
June Turning Point: Autumn-Winter Stocking Drives Export Rebound
June data emerged as the biggest highlight of the first half. Monthly textile and apparel exports reached $29.27 billion, up 7.2% year-on-year and surging 14.3% month-on-month. Textile exports alone hit $13.52 billion, up 12.2% year-on-year, while apparel exports jumped 21% month-on-month to $15.75 billion. These figures clearly signal the start of overseas autumn-winter stocking.
Seasonally, June is typically a slow period, but this year's abnormal month-on-month surge indicates that overseas buyers, after completing inventory destocking, have started aggressive replenishment. For fabric and garment companies, this means the order rhythm for the second half may shift forward, requiring earlier production scheduling for July-August. Additionally, falling shipping costs and a temporary easing of Middle East tensions provided short-term tailwinds for export recovery.
Market Divergence: US as Sole Growth Driver, EU and Japan-South Korea Weak
Data from the first five months shows the US market as the biggest incremental source of growth in the first half. China's textile and apparel export growth rate to the US expanded by 15 percentage points compared to the same period last year. The China-US summit stabilized bilateral relationship expectations, and with overseas brands completing inventory destocking, buyers have increased procurement from Chinese supply chains.
In contrast, traditional markets such as the EU, Japan, and South Korea continued to weaken. The EU is mired in inflation driven by high energy costs, dampening consumer willingness to spend on clothing. ASEAN, Japan, and South Korea, constrained by regional tensions and rising energy prices, have also seen a decline in textile and apparel imports from China. This forces foreign trade companies to reassess market allocations: can the US market's growth dividend persist? Will the EU's weakness worsen further?
Profit Pressure Under RMB Valuation
Switching to RMB statistics, cumulative textile and apparel exports in the first half reached 1.01222 trillion yuan, down 2.2% year-on-year. Apparel alone was 505.8 billion yuan, down 4.2%. The divergence between USD and RMB valuations directly reflects the erosion of export enterprises' profits due to exchange rate fluctuations. For garment manufacturers, this is not just about order volumes but also about margin compression.
Looking ahead to the second half, the global trade environment remains complex. The World Bank warns that the global economy will continue to face triple pressures from rising energy costs, high inflation, and tightening overseas monetary policies. Weak recovery in end-consumption in Europe and the US, persistently high production costs, and fragmented global trade patterns leading to capacity competition will all continue to test industry players.