China's textile and apparel exports totaled $145.96 billion in the first half of 2026, up 1.4% year-on-year, but the June rebound reveals deeper structural shifts. Exports in June reached $29.27 billion, up 7.2% YoY and 14.3% month-on-month, driven by autumn-winter restocking orders. This reversal is not accidental but a result of upstream supply chain resilience and overseas inventory cycles.
Upstream intermediates show resilience, apparel profits under pressure
By category, textile exports in H1 reached $73 billion, up 3.5% YoY, with yarn exports rising 6.6% and fabric dipping only 0.5%. Apparel exports stood at $72.96 billion, down 0.7% YoY, though the decline narrowed by 0.9 percentage points. In RMB terms, apparel exports fell 4.2% to 505.8 billion yuan, underscoring cost pressures on garment manufacturers.
This divergence reflects a shift in overseas brand procurement strategies. Most international brands maintain low inventory levels, reducing long-term apparel orders while increasing frequent purchases of semi-finished products like yarn and fabric. China's complete textile supply chain—from chemical fiber, spinning, dyeing to finished goods—offers unmatched delivery efficiency and quality stability, underpinning the growth of upstream exports. In contrast, the garment processing segment faces low entry barriers and dual pressure from Southeast Asian capacity diversion and domestic price competition, making a near-term turnaround unlikely.
US market emerges as top growth driver, EU and Japan demand weakens
Overseas market performance shows significant divergence. In the first five months, the US became the largest growth driver, with export growth accelerating by 15 percentage points compared to last year. Bilateral trade stability following the China-US summit, combined with inventory destocking by overseas brands, boosted procurement from Chinese supply chains. Conversely, demand from the EU, Japan, and South Korea continued to weaken. The EU's high energy costs dampened consumer spending, while ASEAN and East Asian markets were constrained by regional tensions and rising energy prices.
A temporary easing of the Middle East situation and lower shipping costs provided short-term support for June exports. However, the World Bank warns that the global trade environment still faces triple pressures from energy price hikes, persistent inflation, and monetary tightening. Weak recovery in Western consumer demand and high production costs will continue to test the stability of textile and apparel exports.
June rebound boosts confidence, transformation path is clear
The June rebound is not an isolated event. Textile exports reached $13.52 billion, up 12.2% YoY and 7.4% MoM; apparel exports hit $15.75 billion, up 3.2% YoY and 21% MoM. This indicates that genuine overseas demand is being released, especially the autumn-winter restocking wave driving demand for upstream raw materials and intermediates.
For buyers, now is a critical window to secure upstream capacity. Strong growth in yarn and fabric orders may tighten supply and push up prices. It is advisable to sign quarterly framework agreements with suppliers to hedge against price volatility. For factories, the era of bulk, low-cost production is over. Product innovation and diversified market expansion are key. Emerging markets like the Middle East and Latin America still hold potential, while weak demand in the EU and Japan serves as a warning against over-reliance on single markets.