In the first half of 2026, China's textile and apparel exports reached $145.96 billion, a modest 1.4% year-on-year increase, but the internal structure reveals a stark divide. Textile exports hit $73 billion, up 3.5%, while apparel exports fell to $72.96 billion, down 0.7%. This divergence is not accidental but a direct reflection of global supply chain restructuring and shifting inventory strategies.
June Turning Point: Autumn-Winter Orders Drive Exports, but Sustainability Questioned
June marked a critical inflection point. Monthly textile and apparel exports reached $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month. Textile exports alone were $13.52 billion, surging 12.2% annually; apparel exports hit $15.75 billion, jumping 21% month-on-month. In RMB terms, cumulative exports for H1 fell 2.2% to 1.012 trillion yuan, but June exports reversed the trend with both annual and monthly gains.
Data released by the General Administration of Customs on July 14 shows the June rebound was primarily driven by overseas autumn-winter restocking demand. Orders for intermediate goods like fabrics and yarns recovered first. Since upstream orders take 2-3 months to translate into apparel shipments, if July-August apparel data fails to follow, June's growth could be a short-term inventory replenishment pulse rather than a trend reversal.
Product Structure: Upstream Resilience Far Outweighs Downstream Garments
Category-level data for the first five months confirms the temperature gap across the supply chain. Yarn exports grew 6.6%, fabric exports dipped only 0.5%, and textile products rose 2.6%, while apparel and clothing accessories fell 1.6%.
The logic is straightforward. Overseas brands are adopting low-inventory strategies, reducing large long-term garment orders and instead frequently purchasing semi-finished goods like yarns and fabrics to maintain supply chain flexibility. China's complete textile supply chain—from chemical fiber, spinning, dyeing to finished products—offers delivery efficiency and product quality that competitors in other regions cannot easily replicate. This is the core strength behind upstream growth.
In contrast, the garment processing track has low entry barriers and faces intense international capacity diversion. Southeast and South Asian processing cost advantages continue squeezing Chinese companies' profit margins, with price competition remaining severe. This structural pressure is unlikely to reverse in the short term, forcing garment enterprises to pivot toward fast-response, small-batch, high-value-added models.
Regional Markets: US Stands Alone, EU and Asia-Pacific Weaken
First five months' export performance shows significant regional divergence. The US market emerged as the biggest growth driver, with export growth rate expanding 15 percentage points year-on-year. The China-US summit stabilized bilateral trade expectations, and as overseas brands completed inventory destocking, procurement increased toward Chinese supply chains, continuously driving export growth.
Conversely, traditional mature markets like the EU, Japan, and South Korea saw weakening growth momentum. The EU is mired in high energy costs and inflation, suppressing consumer apparel spending. ASEAN, Japan, and South Korea face dual pressures from regional tensions and rising energy prices, reducing textile and apparel imports from China. Additionally, easing Middle East tensions and falling shipping costs provided short-term boosts to June exports.
This regional divergence means second-half growth potential heavily depends on US market sustainability and whether emerging markets can offset EU and Asia-Pacific declines. If the US economy cools unexpectedly, the industry will face a larger demand gap.
Second-Half Outlook: Three Uncertainties Weigh on Industry Confidence
Looking ahead, the global trade environment remains complex. The World Bank warns that the global economy will continue suffering from rising energy prices, high inflation, and tightening monetary policies, with consumption growth weakening. Three variables warrant close attention:
First, weak recovery in European and American end-consumption. High inflation erodes purchasing power, with apparel spending growth below overall consumption for two consecutive quarters. Second, persistently high production costs. Fluctuating chemical fiber prices, rising labor costs, and increased environmental investments squeeze profit margins. Third, fragmented global trade patterns intensify capacity competition. Some orders are shifting to Vietnam, Bangladesh, and India, eroding China's garment processing market share.
The first half of 2026 saw a special pattern of 'stable total volume, structural divergence, and month-end recovery.' June's export rebound injects confidence but clearly signals the direction of transformation. The era of low-cost, high-volume exports is over. Complete supply chains, product innovation, and diversified global presence are the core tools for navigating the cycle.