In the first half of 2026, China's textile industry delivered a 'stable but shifting' performance under overlapping internal and external pressures: domestic sales rose in both volume and price, capacity utilization exceeded the national industrial average, and while the export base remained solid, the share of the US market declined notably. The mid-year assessment at the CNTAC meeting on August 7 shifted industry focus from short-term production and sales to more profound structural issues—policy logic, carbon barriers, and consumption divergence are reshaping the rules of competition.
Event Background
From an operational data perspective, the keywords for H1 were 'intertwined forces and deepening divergence.' Geopolitical conflicts pushed up energy prices, straining global supply chains, while the AI technology cycle provided upward economic support. The interplay of these forces led to slower growth and deeper divergence, both among countries and industries. Domestically, the production and sales base remained stable, with production growth moderating but capacity utilization outperforming the national industrial average. Domestic sales showed simultaneous increases in volume and price, consumption patterns shifted, and new business formats and channels integrated effectively. On the export front, the overall base remained solid, but the US market share declined significantly, posing multiple challenges ahead.
More notably, the policy environment is undergoing a structural shift. The CNTAC Industry Department pointed out that policies are transitioning from selective to inclusive and competitive, with reduced special subsidies and a greater emphasis on market-oriented guidance. While direct textile-related plans in the '15th Five-Year' special plans are limited, windows remain in green low-carbon development, digital transformation, standard-setting, and brand cultivation. In foreign trade and investment, exports face both support and restrictions such as tax rebate cancellations, and outbound investment now faces new security review systems, requiring close attention to high-tech transfer restrictions and supply chain security. On consumption promotion, the national trade-in subsidy does not cover textiles, but local policies have begun to include them.
Industry Impact
Carbon rules are shifting from 'bonus points' to 'entry tickets.' Under the EU's full value chain regulation, companies must establish 'three ledgers' for fiber composition and recycled content, structured testing, and restricted substances. While the US federal level lacks action, California regulations continue to advance, and ASEAN countries are gradually following suit. China itself is intensifying efforts, with clear green transformation goals for the '15th Five-Year' period, the imminent implementation of the Ecological Environment Code, and the inclusion of dual carbon emission controls in party and government assessments. Over the next five years, the competitive logic will shift from price to circularity and data authenticity, and the Digital Product Passport will become a closed-loop tool linking policy and consumer demand.
Digitalization and cross-disciplinary technology are another main line. Future textiles will break traditional boundaries, deeply integrating into the national six frontier tracks. Smart biomimetic fibers, nanofibers, extreme-environment-resistant materials, bio-manufacturing, and high-performance artificial spider silk are becoming directions. Meanwhile, the industrialization of textile intangible cultural heritage offers a differentiated path: 237 national-level skills, 1,242 provincial-level skills, 3 UNESCO-listed weaving projects, and over 610,000 seasonal practitioners, yet facing challenges such as aging inheritors, products detached from modern aesthetics, and weak family workshop scales. The industry is adopting a 'heritage+' model to promote digital production, modern design reshaping, regional IP development, and going global through international fashion weeks and events like the 2026 World Cup.
For buyers and foreign trade enterprises, this means that supply chain evaluation dimensions must expand: carbon footprint, data transparency, and compliance costs will directly affect order allocation. The decline in US market share is not a short-term fluctuation but structural pressure from tariffs and supply chain relocation; EU market entry barriers are rising, and the Digital Product Passport will become a basic requirement. At the same time, the domestic market's volume-price growth and consumption shifts provide a buffer for brands and factories to hedge external risks.