In the first half of 2026, China's textile industry delivered a report card of "stable but with concerns": production growth moderated, capacity utilization exceeded the national industrial average, domestic sales saw both volume and price increases, but export share to the US declined significantly, and internal divergence deepened. The overall momentum is repairing, but the second half may be weaker than the first, reflecting the interplay between geopolitical conflicts raising energy costs and the AI technology cycle supporting economic growth, with slowdown and divergence as keywords.
Event Background
On August 7, the China National Textile and Apparel Council (CNTAC) held its mid-year working conference in Beijing, reviewing the first half and forecasting the second half. The meeting revealed that the industry achieved repair and development on a stable production-sales base, but domestic consumption structure shifted, new business formats and channels showed initial integration, and while the export base remained solid, the declining US market share is an undeniable fact.
Policy is undergoing a deep shift. According to CNTAC's industry department, policies are moving from selective to inclusive and competitive, with reduced special subsidies and greater emphasis on market-oriented guidance. The 15th Five-Year Plan includes limited direct textile measures, but green low-carbon and digital transformation open new space. The "Standard Leading Textile Industry Optimization and Upgrade Action Plan (2026-2028)" and "Textile and Apparel Excellent Brand Cultivation Action Plan (2026-2028)" will be key policy handles for the next three years.
Industry Impact
Sub-sectors performed unevenly. Cotton textiles, chemical fibers, knitting, apparel, home textiles, and industrial textiles all operated steadily, but divergence was obvious: chemical fibers were affected by raw material price fluctuations, apparel saw domestic sales volume and price rise but exports pressured, home textiles maintained resilience due to consumption upgrades, and industrial textiles performed robustly driven by infrastructure and medical demand.
Notably, ESG is transforming from a compliance issue to a rigid market access rule, shifting from soft constraints to hard barriers. EU full-value-chain regulation requires companies to establish three ledgers: fiber composition, recycled content, and restricted substances. Although the US federal level lacks action, California regulations continue to advance. China's 15th Five-Year Plan sets clear green transition goals, with dual carbon control included in party and government assessments. This means the competitive logic over the next five years will shift from price to circularity and data authenticity, with product digital passports, carbon footprints, and restricted substance lists as core tools.
Another new variable is the industrialization of textile intangible cultural heritage. There are 237 national-level textile heritage techniques and 1,242 provincial-level ones, with three weaving projects on UNESCO's intangible heritage list, employing over 610,000 seasonal workers. Challenges include aging inheritors, products detached from modern aesthetics, and weak small-family workshops. The industry is exploring a "heritage +" four-dimensional model: digitalization and intelligent equipment for standardized mass production, modern design reshaping traditional patterns, creating regional IPs like Song brocade and blue calico, and leveraging international fashion weeks and the 2026 FIFA World Cup to promote cultural export.