In the first half of 2026, China's textile and apparel exports totaled $145.96 billion, up 1.4% year-on-year. However, this headline figure masks a deepening divergence between upstream and downstream segments. Textile exports reached $73 billion, up 3.5%, while apparel exports stood at $72.96 billion, down 0.7%. Although the decline narrowed by 0.9 percentage points compared to the same period last year, the recovery signal for finished garments remains weak. June exports surged to $29.27 billion, up 7.2% year-on-year and 14.3% month-on-month, driven by pre-autumn stocking. But whether this rebound is sustainable depends on the real recovery of end-consumer demand.
June Export Rebound: Stocking or Trend Reversal?
June data is indeed impressive: textile exports reached $13.52 billion, up 12.2% year-on-year and 7.4% month-on-month; apparel exports hit $15.75 billion, up 3.2% year-on-year and a staggering 21% month-on-month. In renminbi terms, June exports totaled 200.25 billion yuan, with both year-on-year and month-on-month growth. The fabric segment was particularly strong. Although apparel slightly declined year-on-year, the over 20% month-on-month surge confirms that overseas buyers are indeed placing concentrated orders.
However, this rebound is largely a combination of inventory cycles and seasonal stocking. After more than a year of destocking, overseas brands' inventory levels have fallen to lows, and the autumn/winter new product launch window has triggered concentrated restocking. But end-consumer demand has not rebounded strongly in tandem—high inflation in the EU and volatile consumer confidence in the US suggest that this wave of orders may be 'restocking' rather than 'consumption expansion.' For factories, concentrated orders mean short-term capacity strain, but if follow-up demand fails to materialize, they may face an order gap by the end of Q3.
Widening Divergence: Upstream Resilience vs. Garment Pressure
Detailed data from the first five months further confirms the divergence. Yarn exports grew 6.6% year-on-year, fabric exports edged down only 0.5%, and textile products exports rose 2.6%; in contrast, apparel and accessories exports fell 1.6%. Behind this gap is a fundamental shift in overseas brands' procurement strategy: reducing large long-term garment orders in favor of high-frequency purchases of semi-finished products like yarn and fabric to maintain supply chain flexibility.
China's complete textile industry chain—from chemical fiber, spinning, dyeing and finishing to finished products—has become a moat for upstream categories. Delivery efficiency and product quality are difficult to replicate by other regions, which is the core reason for sustained growth in textile exports. In contrast, the garment OEM track has low barriers, with capacity diversion to Southeast Asia and South Asia and severe price competition. For garment OEM companies, the era of relying solely on scale expansion is over. They must transform toward design, quick response, and small-batch customization to sustain profit margins.
Market Restructuring: US as Bright Spot, EU and Japan Weak
Overseas market performance in the first five months showed significant divergence. The US market became the biggest growth driver, with export growth expanding by 15 percentage points compared to the same period last year. The summit meeting between Chinese and US leaders stabilized bilateral relations, and overseas brands, having completed destocking, increased procurement from Chinese supply chains. This trend particularly benefits textile intermediate products, as US brands value China's supply chain stability and delivery speed.
In contrast, traditional mature markets like the EU, Japan, and South Korea continue to weaken. The EU is mired in high energy costs and inflation, depressing consumer apparel spending; ASEAN, Japan, and South Korea face constraints from regional tensions and rising energy prices, leading to reduced imports from China. The temporary easing of Middle East tensions and falling shipping costs provided short-term boosts to June exports, but these factors lack sustainability.
For export companies, market diversification has shifted from 'optional' to 'mandatory.' Over-reliance on a single market carries high risk, while emerging markets—though still small in scale—offer untapped growth potential.
External Challenges and Industry Resilience
Looking ahead to the second half of the year, the global trade environment remains complex. The World Bank warns of triple pressures from rising energy costs, high inflation, and tightening monetary policies, which will continue to weaken global consumption. Weak recovery in US and European end-consumer demand, rising production costs, and fragmented global trade patterns will test the industry.
But China's textile industry still holds strong cards: a complete industrial chain, efficient infrastructure, a mature workforce, and continuous technological innovation form a hard-to-replicate composite advantage. The 'stable total, diverging structure, end-of-month rebound' pattern in H1 2026 actually points the way for transformation: the era of low-price, volume-driven exports is over. Complete industrial chains, product innovation, and global diversification are the core levers for navigating the cycle.