China's textile and apparel trade in the first half of 2026 delivered a mixed picture: total exports of $145.96 billion held steady at a historical high, but the modest 1.4% growth masked a clear divergence between upstream and downstream sectors. More critically, June exports of $29.27 billion—up 7.2% year-on-year and 14.3% month-on-month—signaled the official start of autumn-winter restocking, setting a crucial tone for the second half.
Structural divergence beneath the data
In dollar terms, textile exports reached $73 billion in H1, up 3.5% year-on-year, while apparel exports stood at $72.96 billion, down 0.7%. The nearly equal totals obscure a 4-percentage-point growth gap. This divergence is not a short-term fluctuation but the result of a fundamental shift in overseas procurement strategies. Brands have moved to low-inventory operations, reducing bulk garment orders in favor of frequent purchases of yarns and fabrics to respond quickly to market changes. China's complete supply chain—from chemical fiber, spinning, and dyeing to finished products—is ideally suited to this flexible replenishment model, underpinning the sustained growth of upstream categories.
In contrast, the garment OEM segment faces lower entry barriers and intense competition from international production bases. Countries like Vietnam and Bangladesh continue to erode Chinese companies' order share in mid-to-low-end apparel, while rising domestic labor costs add further pressure. Although the decline in garment exports narrowed by 0.9 percentage points compared to the same period last year, absolute values are still falling, indicating that the terminal market recovery remains fragile.
June inflection point: restocking and external tailwinds
June's single-month data was the highlight of the first half. Textile and apparel exports reached $29.27 billion, up 7.2% year-on-year and surging 14.3% month-on-month. Textile exports alone hit $13.52 billion, up 12.2% year-on-year, while apparel exports reached $15.75 billion, up 3.2% year-on-year and soaring 21% month-on-month. This rebound was driven by three factors:
- The official start of the autumn-winter restocking cycle, with brands placing orders ahead of the peak season
- A temporary easing of geopolitical tensions in the Middle East, which reduced shipping costs and released pent-up orders
- Sustained recovery in the US market, where export growth accelerated by 15 percentage points compared to last year
Following the US-China summit, bilateral relations stabilized, and with overseas brands largely completing inventory destocking, procurement from Chinese supply chains increased significantly. The US market became the biggest growth driver in H1, effectively offsetting weakness in traditional markets like the EU, Japan, and Korea.
Market reshaping: US strength vs. European struggles
Analyzing export data for the first five months reveals stark regional disparities. The EU, mired in high energy costs and inflation, saw subdued consumer apparel spending and reduced imports from China. ASEAN, Japan, and Korea also underperformed due to regional instability and rising energy prices. In contrast, the US market stood out as the key pillar supporting overall export stability.
This regional divergence means foreign trade companies must refine their market strategies. Over-reliance on any single market carries increased risk, but a scattergun approach is equally unrealistic. Companies with supply chain advantages should prioritize consolidating the US market while exploring emerging markets like the Middle East and Latin America through cross-border e-commerce or overseas warehouses, gradually building a diversified customer base.
Currency fluctuations and profit margins
Switching to RMB-denominated data, H1 exports totaled 1.01222 trillion yuan, down 2.2% year-on-year. The contrast between a slight increase in dollar terms and a decline in yuan terms reflects the impact of RMB appreciation against the dollar. This directly squeezed exporters' profit margins, particularly in low-margin apparel categories where exchange losses are more pronounced.
In June, the RMB-denominated data also rebounded, with exports reaching 200.25 billion yuan, up both year-on-year and month-on-month. The fabric segment showed particularly strong growth, while apparel, despite a slight year-on-year decline, posted a more than 20% month-on-month increase, confirming that genuine overseas demand is being released rather than just seasonal fluctuations.
Industry resilience amid external challenges
Looking ahead to the second half, the global trade environment remains complex. The World Bank warns that the global economy will continue to face three pressures: high energy prices, persistent inflation, and tightening monetary policies, with weak consumption recovery in Europe and the US. However, the foundation of China's textile and apparel trade is not entirely passive—its complete supply chain, efficient delivery capabilities, and room for product innovation constitute a competitive moat that is hard to replicate.
June's rebound has injected confidence into the industry and pointed the way for transformation. The era of competing solely on low prices is over. Companies must focus on three dimensions: product differentiation, supply chain responsiveness, and market diversification. While external uncertainties persist, the industry's deep manufacturing roots provide a solid basis for maintaining stable trade performance in the second half.