China's textile and apparel exports reached $145.96 billion in the first half of 2026, up 1.4% year-on-year. The headline figure appears stable, but a structural breakdown reveals a clear divergence: upstream intermediate goods grew 3.5% to $73 billion, while apparel exports dipped 0.7% to $72.96 billion. June became a turning point, with exports surging 7.2% year-on-year and 14.3% month-on-month to $29.27 billion, driven by autumn-winter stocking demand.
Structural Divergence: The Logic Behind Intermediate Goods Resilience
Yarn exports rose 6.6% year-on-year, fabric edged down only 0.5%, and textile products grew 2.6%. This upstream strength reflects global brands' shift to low-inventory strategies, favoring frequent purchases of semi-finished goods over large apparel orders. China's integrated supply chain—from chemical fiber and spinning to dyeing and finishing—makes yarn and fabric irreplaceable. In contrast, apparel OEM faces low entry barriers and intense competition from Southeast Asia and South Asia, with price wars unlikely to ease soon.
June Rebound: Rhythm and Signals of Autumn-Winter Stocking
June's data was the half-year's highlight. Apparel exports surged 21% month-on-month, far outpacing textiles' 7.4% gain, indicating genuine restocking demand. Three factors drove this: US inventory destocking completion, with China's exports to the US growing 15 percentage points faster than last year; eased Middle East tensions lowering shipping costs; and early opening of the autumn-winter order window. However, EU, Japan, and Korea markets remain subdued due to high inflation and energy costs.
Exchange Rate and Profit Margins: Real Pressure in RMB Terms
In RMB terms, total exports fell 2.2% to 1.012 trillion yuan. Textile exports edged down just 0.1%, while apparel dropped 4.2%. Exchange rate fluctuations eroded margins, especially for small OEMs squeezed between dollar settlements and yuan costs. June's RMB-denominated data showed recovery, with apparel's 20%+ month-on-month gain confirming real demand. Companies should hedge currency risks using forward contracts.
External Challenges vs. Industry Resilience
The World Bank warns of sustained headwinds from energy prices, inflation, and monetary tightening. Yet China's supply chain advantages—delivery efficiency and product quality—remain unmatched in the short term. The path forward is clear: low-price volume strategies are obsolete. Innovation, market diversification, and supply chain resilience are the keys to weathering cycles. June's rebound proves that when global demand returns, China's supply chain is still the first choice.