In the first half of 2026, China's textile and apparel exports totaled $145.96 billion, up 1.4% year-on-year, maintaining a historically high level. However, the real highlight for the industry was June's performance: monthly exports reached $29.27 billion, surging 14.3% month-on-month and 7.2% year-on-year. The launch of the overseas autumn-winter stockpiling season not only boosted overall figures but also revealed deep structural divergences in the supply chain.
Structural Divergence: Resilient Upstream, Pressured Downstream
The most notable feature of the H1 data is the stark contrast between upstream and downstream. Textile products (yarn, fabrics, etc.) exported $73 billion, up 3.5% YoY, with yarn exports rising 6.6% and fabrics only down 0.5%. In contrast, apparel exports reached $72.96 billion, down 0.7% YoY. Although the decline narrowed, it remains in negative territory.
This divergence reflects a shift in overseas brands' procurement strategies. Global retailers are now operating with low inventories, favoring frequent purchases of semi-finished goods over long-cycle finished garment orders. China's complete textile supply chain—from chemical fiber, spinning, dyeing, to finished products—offers unmatched delivery efficiency and quality assurance, which is the core reason for the sustained growth of upstream categories. The garment OEM track, with lower entry barriers, faces capacity diversion and price competition from regions like Southeast Asia, making the pressure hard to alleviate in the short term.
Market Dynamics: US Dominates, Europe and Japan Weak
The overseas demand landscape shows significant fragmentation. Data from the first five months indicates that the US market was the largest growth driver in H1, with textile and apparel export growth rates expanding 15 percentage points compared to the same period last year. The stabilization of Sino-US relations, combined with the completion of brand inventory destocking, has led procurement firms to increase purchases from China, directly boosting export volumes.
In contrast, traditional markets like the EU, Japan, and South Korea continue to show weakening growth momentum. High energy costs have led to persistent inflation in the EU, dampening residents' willingness to spend on apparel. ASEAN and Japan-South Korea, constrained by regional tensions and rising energy prices, have also seen a decline in textile and apparel imports from China. The easing of the Middle East situation and falling shipping costs provided short-term positive factors for the export recovery in June.
The Profit Reality Under RMB Valuation
The growth in dollar-denominated exports masks the real difficulties faced by some companies. In RMB terms, H1 textile and apparel exports were 1,012.22 billion yuan, down 2.2% YoY. Textile exports were 506.42 billion yuan, only down 0.1%, while apparel exports were 505.8 billion yuan, down 4.2% YoY. Exchange rate fluctuations directly eroded the profit margins of garment manufacturing enterprises, especially small and medium-sized OEMs, where the pressure from RMB depreciation is more pronounced amid intense price competition.
Outlook for H2: Resilience Persists, Challenges Remain
Looking ahead to the second half of the year, the global trade environment remains complex. The World Bank warns that the triple pressures of energy price hikes, high inflation, and monetary tightening will continue to suppress consumer growth. Weak recovery in end-user demand in Europe and the US, coupled with the fragmentation of the global trade landscape, will intensify capacity competition.
However, China's textile industry's strength lies in its complete supply chain and continuous product innovation. The export resilience of intermediate goods like yarn and fabrics shows that global buyers' dependence on China's supply chain has not diminished. If companies can accelerate the transition to high value-added products and diversify their market layout, they can still stabilize their fundamentals amid volatility.