Textile and Apparel Foreign Trade Mid-Year Report: Upstream Resilience Offsets Apparel Weakness, Supply Chain Logic Behind June Export Rebound

June exports surged 14.3% month-on-month, with apparel climbing 21%, signaling the start of overseas autumn-winter restocking. According to General Administration of Customs data for the first half of 2026, total textile and apparel exports reached $145.96 billion, up 1.4% year-on-year, maintaining a historically high level. However, beneath the surface stability, upstream and downstream segments diverged sharply: textile exports grew 3.5% to $73 billion, while apparel exports fell 0.7% to $72.96 billion.

Why Upstream Intermediates Outperformed Yarn exports rose 6.6% year-on-year, fabric exports fell only 0.5%, and finished textile products grew 2.6%. This outperformance is no coincidence. Overseas brands are adopting low-inventory strategies, reducing large long-term apparel orders in favor of frequent purchases of semi-finished goods like yarn and fabric. China’s integrated supply chain—from chemical fiber, spinning, dyeing to finished goods—offers delivery efficiency and product quality hard to replicate elsewhere, underpinning upstream growth. In contrast, the apparel OEM segment faces low barriers, capacity diversion, and price competition, with no near-term relief.

June Rebound: Seasonal Demand Meets External Tailwinds June textile and apparel exports hit $29.27 billion, up 7.2% year-on-year. Textiles reached $13.52 billion (+12.2%), while apparel hit $15.75 billion (+3.2%). Multiple factors drove this: the start of autumn-winter restocking, eased Middle East tensions lowering shipping costs, and the release of backlogged orders. In RMB terms, first-half exports totaled 1,012.22 billion yuan, down 2.2% year-on-year, but June alone hit 200.25 billion yuan, with both month-on-month and year-on-year gains, confirming genuine overseas demand recovery.

Global Market Divergence: US Emerges as Key Growth Driver In the first five months, demand patterns diverged sharply. The US market became the largest growth source, with export growth accelerating 15 percentage points from the prior year. The China-US summit stabilized expectations, and as overseas brands completed inventory destocking, procurement from China increased. Meanwhile, the EU struggled with high energy costs and weak consumer spending; ASEAN, Japan, and South Korea saw reduced imports due to regional tensions and rising energy prices.

Challenges Ahead and Industry Resilience The global trade environment remains complex. The World Bank warns of sustained pressure from energy prices, inflation, and monetary tightening. Weak recovery in Western consumer demand, high production costs, and fragmented trade patterns will continue testing the industry. However, the first half of 2026 has clarified the path forward: the era of low-price volume exports is over. Complete supply chains, product innovation, and diversified global presence are key to navigating the cycle.

For Buyers - Monitor upstream yarn and fabric supplier capacity stability; lock in key intermediates for autumn-winter orders early. - Assess US inventory restocking pace—procurement from China may expand further in H2. - Stay cautious on EU, Japan, and South Korea markets; prioritize suppliers with multi-market distribution capabilities to diversify risk.

For Exporters - Strengthen yarn and fabric export advantages; leverage the complete supply chain to enhance customer stickiness. - Shift apparel business toward higher value-added segments to avoid price wars. - Monitor RMB exchange rate fluctuations and use financial tools to hedge profit margin risks.