China's textile and apparel trade posted a stable H1 performance with clear structural divergences. According to data released by the General Administration of Customs on July 14, total exports reached $145.96 billion in the first half of 2026, up 1.4% year-on-year. However, the real highlight was June's monthly data: exports hit $29.27 billion, surging 14.3% month-on-month and 7.2% year-on-year. This signals the official start of overseas autumn/winter stockpiling, injecting much-needed momentum into a sluggish market.
Structural Divergence Behind the Numbers
Beneath the stable aggregate, upstream and downstream categories showed contrasting trends. Textile exports grew 3.5% to $73 billion in H1, with yarn exports rising 6.6% and fabrics down only 0.5%. In contrast, apparel exports fell 0.7% to $72.96 billion. This divergence reflects a shift in global procurement strategies—overseas brands are moving toward low-inventory operations, reducing large long-term garment orders and instead purchasing semi-finished goods like yarn and fabric more frequently. China's complete textile supply chain—from chemical fiber, spinning, dyeing to finished products—offers unmatched delivery efficiency and quality, underpinning the resilience of upstream categories.
June data reinforced this trend. Textile exports hit $13.52 billion, up 12.2% year-on-year and 7.4% month-on-month; apparel exports reached $15.75 billion, up 3.2% year-on-year but surging 21% month-on-month. While garment replenishment orders were concentrated in June, the year-on-year growth rate was only a quarter of textiles, indicating uneven demand recovery. For companies, this means reassessing product mix: upstream intermediates offer greater resilience, while garment OEM faces long-term pressure due to low entry barriers, capacity diversion, and price competition.
US Market Emerges as Biggest Growth Driver
Overseas market performance showed significant fragmentation. In the first five months, the US became the industry's largest incremental source, with export growth accelerating 15 percentage points year-on-year. This reflects both improved market expectations from the US-China summit and increased procurement from Chinese supply chains as overseas brands replenish depleted inventories. Conversely, traditional mature markets like the EU, Japan, and South Korea saw weakening momentum. The EU struggles with high energy costs and declining consumer apparel spending; ASEAN, Japan, and South Korea face dual pressures from regional tensions and rising energy prices, reducing their imports from China.
This shift means exporters cannot rely on traditional markets for sustained growth. While the US market is strong in the short term, geopolitical risks remain. Weak demand in the EU, Japan, and South Korea may become a medium-term trend. Although temporary Middle East de-escalation and falling shipping costs provided short-term relief in June, triple pressures of global inflation, energy price hikes, and monetary tightening persist. The World Bank's warnings are not unfounded—global consumption growth will continue to weaken, posing multiple challenges for textile exports.
Profit Reality Under RMB Denomination
Exchange rate fluctuations significantly distorted export data. In RMB terms, H1 textile and apparel exports totaled 1.012 trillion yuan, down 2.2% year-on-year. Textile exports were 506.42 billion yuan, down only 0.1%, showing strong resilience; apparel exports were 505.8 billion yuan, down 4.2%, squeezing garment manufacturers' profits. June saw a rebound in RMB terms, with exports reaching 200.25 billion yuan, rising both year-on-year and month-on-month, but apparel still declined slightly year-on-year.
This reveals a key fact: dollar-denominated growth was partly offset by RMB appreciation. Exporters' actual RMB revenue did not grow in tandem, especially for garment companies, whose profit margins were further compressed. Upstream textiles, with higher added value and stronger bargaining power, were less affected by exchange rate fluctuations. Low-value-added garment OEM, squeezed by both exchange rates and costs, sees razor-thin margins. This forces the industry to shift from "volume-driven" to "quality-driven" growth, using product innovation and supply chain efficiency to hedge currency risks.