Capacity utilization outperforming the national industrial average, domestic sales rising in both volume and price, yet the shrinking US market share is no short-term fluctuation—these are the mixed signals from China's textile industry in H1 2026. Data released at the CNTAC mid-year working conference indicate the industry remains on a recovery track, but the driving forces are shifting, and momentum may weaken in H2.
Background
On August 7, the China National Textile and Apparel Council (CNTAC) held its 2026 mid-year working conference in Beijing, combining one main venue with 23 sub-venues online and offline. The meeting systematically reviewed operational data from six sub-sectors: cotton textiles, chemical fibers, knitting, apparel, home textiles, and technical textiles, each presenting H2 outlooks. The industry research department summarized H1 with the keywords "intersecting forces and deepening divergence"—geopolitical conflicts raised energy prices and supply chain costs, while the AI technology cycle provided upward support. The interplay of these forces slowed growth and widened gaps.
Divergence appears both between countries and within industries. Domestic production and sales remained stable, with production growth moderating but capacity utilization above the national industrial average; domestic sales saw both volume and price increases, consumption structure rotated, and new business formats and channels integrated effectively. Exports remained solid overall, but the US market share dropped notably, posing multiple challenges ahead. Policy is also in transition: special subsidies are being reduced, shifting from selective to universal and competitive approaches. Direct textile-related plans in the 15th Five-Year Plan are limited, but digital transformation, green low-carbon, and two special textile action plans provide new handles.
Industry Impact
For buyers and factories, the most concerning signal in H1 data is not the total but the structure. Rising domestic sales in both volume and price indicate sustained end demand, but consumption rotation suggests faster category hot-spot shifts, increasing risks for single-product bets. The declining US market share is not an isolated event; combined with stricter EU full-value-chain regulation, exporters face dual pressures of market diversification and rising compliance costs. CNTAC's social responsibility office noted that sustainable development has shifted from compliance to rigid market access rules, with digital product passports, carbon footprints, and restricted substance lists as core tools. Companies must establish three ledgers: fiber composition and recycled ratios, structured testing, and restricted substances.
In green low-carbon, textiles are not yet a key sector for carbon peaking, but energy efficiency standard research should be prepared in advance. EU regulations continue to advance, the US federal level remains absent but California's regulations cannot be ignored, and ASEAN requirements are following. This means the competitive logic over the next five years will shift from price to circularity and data authenticity. Meanwhile, textile intangible cultural heritage boasts 237 national-level skills and over 610,000 seasonal workers, but faces challenges such as aging inheritors, products detached from modern aesthetics, and weak small-family workshop scales; the "heritage+" four-dimensional model attempts revitalization through digital mass production, modern design reshaping, regional IP development, and international fashion week platforms.