China's textile industry delivered a seemingly stable but deeply divided performance in H1 2026. According to data released by the General Administration of Customs on July 14, total textile and apparel exports from January to June reached $145.96 billion, a marginal 1.4% year-on-year increase, still at a historical high. However, beneath this figure, the upstream and downstream sectors experienced starkly different fortunes: textile exports were $73 billion, up 3.5% YoY, while apparel exports were $72.96 billion, down 0.7% YoY. Although the decline narrowed by 0.9 percentage points compared to the same period last year, it cannot mask the structural pressure on the terminal apparel segment.
June Reversal: Early Start of Autumn/Winter Stocking
The industry's highlight came in June. Monthly textile and apparel exports reached $29.27 billion, a 7.2% YoY increase and a 14.3% surge month-on-month, far exceeding market expectations. This data directly signaled the official start of overseas autumn/winter stocking. Textile exports were $13.52 billion, up 12.2% YoY and 7.4% MoM; apparel exports were $15.75 billion, up 3.2% YoY and a staggering 21% MoM. The concentrated release of apparel replenishment orders indicates that overseas brands are emerging from their 'low inventory fear,' but purchasing remains high-frequency and small-batch.
In RMB terms, exchange rate fluctuations caused some distortion. Cumulative H1 exports were 1,012.22 billion yuan, down 2.2% YoY. Textile exports were 506.42 billion yuan, down only 0.1%, showing strong resilience; apparel exports were 505.8 billion yuan, down 4.2%, further squeezing the profit margins of garment manufacturers. However, June also saw a recovery in RMB terms, with monthly exports reaching 200.25 billion yuan, with the fabric segment performing particularly well.
Overseas Markets: US Stands Alone, Traditional Markets Weaken
Looking at the first five months, global demand patterns showed significant fragmentation. The US market was the biggest growth driver in H1, with China's textile and apparel exports to the US expanding by 15 percentage points YoY. This was driven by multiple factors: the US-China summit stabilized bilateral expectations, overseas brands largely completed inventory destocking, and buyers increased their reliance on the Chinese supply chain.
In contrast, traditional mature markets like the EU, Japan, and South Korea continued to lose momentum. The EU is mired in high energy costs and inflation, suppressing consumer spending on clothing. ASEAN, Japan, and South Korea saw reduced imports from China due to regional tensions and rising energy prices. The temporary easing of the Middle East situation and falling shipping costs provided important short-term support for the overall export recovery in June.
Supply Chain Advantage: Upstream Resilience, Apparel Under Pressure
Disaggregated data from the first five months clearly shows the different fortunes of upstream and downstream sectors. Yarn exports grew 6.6% YoY, while fabric exports fell only 0.5%. Finished textile product exports rose 2.6% YoY. In contrast, apparel and clothing accessory exports fell 1.6% YoY.
The industry implication is clear: overseas brands are adopting low-inventory strategies, reducing large long-term apparel orders and instead frequently purchasing semi-finished goods like yarn and fabric. China possesses the world's most complete textile supply chain, from chemical fiber, spinning, dyeing and finishing to finished products, with delivery efficiency and product quality that are hard to replace by other regions. This is the core confidence behind the sustained growth of upstream textile categories. The apparel OEM track, however, has low barriers to entry, with severe international capacity diversion and price competition, making long-term pressure difficult to reverse in the short term.
H2 Outlook: External Challenges Remain, Industry Foundation Strong
Looking ahead to H2, the global trade environment remains complex. The World Bank warns that the global economy will face the triple pressures of rising energy prices, high inflation, and tightened overseas monetary policies, with global consumption growth continuing to weaken. Weak recovery in end-consumer demand in Europe and the US, persistently high production costs, and capacity competition from fragmented global trade patterns will continue to test industry players.
However, the June export rebound has injected confidence into the industry and pointed the way for transformation. The era of relying on low prices and high volume for export is over. A complete supply chain, product innovation, and global diversification are the core tools for navigating the cycle. While external uncertainties remain in H2, relying on China's deep textile industry foundation, companies that adjust their product and market strategies in time will ensure the industry's export volume remains stable.