In H1 2026, China's textile industry achieved a stable production-sales base with rising domestic volume and prices, yet export structure changes and policy shifts are reshaping competitive logic. Data from the CNTAC mid-year work conference show that capacity utilization exceeded the national industrial average, while export share to the US declined notably, and momentum may weaken in H2. This implies the recovery is not broad-based but marked by structural divergence.
Background
On August 7, the China National Textile and Apparel Council (CNTAC) held its 2026 mid-year work conference in Beijing, with one main venue and 23 sub-venues online and offline. The meeting analyzed H1 industry operations and forecast H2 trends. Zhang Qian, director of the Planning Research Division, highlighted keywords "intertwined forces and deepening divergence": geopolitical conflicts raised energy prices and supply chain pressures, while the AI tech cycle supported growth, leading to slowdown and divergence across countries and sectors.
Sub-sectors including cotton textiles, chemical fibers, knitting, apparel, home textiles, and industrial textiles each reported operations, showing a repair trend but with varying demand environments and challenges. For instance, chemical fibers faced greater raw material price volatility, while industrial textiles benefited from infrastructure and medical demand. This divergence requires precise positioning by enterprises.
Industry Impact
Policy is shifting from selective to inclusive and competitive measures. Zhao Mingxia, director of the Industry Department, noted reduced special subsidies and more market-oriented guidance; the 15th Five-Year Plan has limited direct textile provisions, but digitalization and green low-carbon offer opportunities. In foreign trade, both export support and tax rebate cancellations exist, while outbound investment faces new security review systems, adding risks for overseas expansion.
Green barriers are becoming hard market access rules. Hu Kehua, deputy director of the Social Responsibility Office, stated that the EU enforces full value chain regulation, requiring enterprises to maintain three ledgers: fiber composition and recycled ratio, structured testing, and restricted substances. The US lacks federal action, but California regulations advance; domestically, the 15th Five-Year Plan sets clear green transition goals, with an ecological environment code imminent and carbon emission dual control in party and government assessments. Future competition will pivot from price to circularity and data authenticity, with product digital passports as key tools.
Technological innovation and intangible heritage industrialization are new growth points. Zhang Chuanxiong, director of the Science and Technology Development Department, proposed future textiles will break boundaries, integrating with biology, AI, and aerospace to develop smart bionic fibers, nanofibers, and extreme-environment-resistant materials. Heritage data show 237 national-level textile heritage techniques and 1,242 provincial-level ones, yet aging inheritors and outdated aesthetics challenge preservation. The industry is promoting "heritage+" models with digitalization and brand collaboration for cultural export.