In the first half of 2026, China's textile and apparel exports reached $145.96 billion, up 1.4% year-on-year. The headline figure is modest, but the internal structure tells a more compelling story: the growth gap between textiles and apparel has widened to over 4 percentage points, signaling a clear divergence between intermediate and finished goods.
June Turning Point: Autumn-Winter Restocking Drives Export Rebound
Customs data released on July 14 shows June exports hit $29.27 billion, surging 14.3% month-on-month and up 7.2% year-on-year. This rebound reflects multiple factors: overseas brands have largely completed inventory destocking, triggering concentrated autumn-winter orders; easing tensions in the Middle East have reduced shipping costs, providing a short-term boost.
By category, June textile exports reached $13.52 billion, up 12.2% year-on-year, far outpacing apparel's 3.2% growth. However, apparel exports surged 21% month-on-month, indicating pent-up replenishment demand is being released, though its sustainability remains uncertain.
U.S. Market Leads Growth, Traditional Markets Falter
Examining the first five months' data, the U.S. market stands out. China's textile and apparel exports to the U.S. grew 15 percentage points faster than the same period last year, making it the single largest incremental contributor. Improved bilateral relations following the summit meeting and inventory replenishment by American brands drove increased sourcing from China.
In contrast, traditional markets like the EU, Japan, and South Korea continued to weaken. The EU's high energy costs and inflation have depressed consumer spending on apparel; ASEAN, Japan, and South Korea face headwinds from regional tensions and rising energy prices, reducing their imports from China. This market divergence is unlikely to change soon, forcing companies to reassess their market allocation priorities.
Supply Chain Advantage: Upstream Intermediates Outperform Apparel
First five-month data by subcategory reveals stark differences along the supply chain. Yarn exports grew 6.6% year-on-year; fabric exports edged down only 0.5%; finished textile products rose 2.6%; while apparel and accessories fell 1.6%.
This divergence stems from shifting procurement strategies. Brands now favor low-inventory models, reducing large long-term garment orders and instead placing frequent, smaller orders for semi-finished goods like yarn and fabric to maintain supply chain flexibility. China's complete textile ecosystem—from chemical fiber, spinning, dyeing to finished products—offers unmatched delivery efficiency and quality that competitors struggle to replicate. Apparel manufacturing, with lower entry barriers, faces intensifying competition from other regions and price wars, a pressure unlikely to ease soon.
Currency Volatility and Cost Pressures
RMB-denominated data reveals how exchange rate fluctuations impact exporter profitability. First-half exports totaled 1.012 trillion yuan, down 2.2% year-on-year, contrasting with the 1.4% growth in USD terms. Textile exports were 506.42 billion yuan, down only 0.1%, demonstrating strong resilience; apparel exports were 505.8 billion yuan, down 4.2%, squeezing manufacturers' margins.
Currency management has become essential for exporters. The yuan depreciated against the dollar in H1 2026, but with increased volatility. Companies need to employ tools like forward contracts and currency options to lock in profits.
Outlook: Finding Certainty Amid Uncertainty
The World Bank warns that global growth faces headwinds from high energy prices, persistent inflation, and monetary tightening. Consumption recovery in Europe and the U.S. remains weak, production costs stay elevated, and fragmented global trade intensifies competition.
Yet China's textile export base remains solid. The complete supply chain, product innovation capabilities, and diversified market presence provide a buffer against headwinds. June's export rebound injects confidence and clarifies the direction: the era of volume-driven, low-price exports is over. Companies must build new competitiveness through product innovation, supply chain optimization, and market diversification.