Capacity utilization outperformed the national industrial average, domestic sales grew in both volume and price, yet export share to the US contracted notably—the recovery picture for the textile industry in H1 2026 is not all smooth sailing. Signals from the China National Textile and Apparel Council (CNTAC) mid-year work conference indicate the industry stands at a crossroads of 'intertwined forces and deepening divergence,' where geopolitical conflicts pushing up energy costs offset the upward support from the AI technology cycle, making slowdown and divergence the main themes.
Background
On August 7, CNTAC held its 2026 mid-year work conference in Beijing, with one main venue and 23 sub-venues via online-offline integration, reviewing H1 performance data and forecasting H2 trends. Sub-sector reports disclosed at the meeting showed that cotton textiles, chemical fibers, knitting, apparel, home textiles, and industrial textiles all exhibited recovery, but at different paces and driven by different factors. The industry department noted that production grew steadily but slowly, capacity utilization exceeded the national industrial average, domestic consumption structure rotated, and new business formats and channels showed integration results.
Policy changes deserve more attention. The industry department interpreted that current policies are shifting from selective to universal and competitive, with reduced special subsidies and more market-oriented guidance. Direct textile-related content in the '15th Five-Year' special plans is limited, but in the green low-carbon field, although textiles are not yet a carbon peak priority, energy efficiency standard research can be prepared in advance; digital transformation brings opportunities for data infrastructure and personalized design. Two textile-specific plans—the 'Standard Leading Textile Industry Optimization and Upgrade Action Plan (2026-2028)' and the 'Textile and Apparel Excellence Brand Cultivation Action Plan (2026-2028)'—become key policy handles for the next two years.
Industry Impact
Although the export base remains solid, the market share in the US has declined significantly, posing multiple challenges ahead. This implies that foreign trade enterprises highly dependent on the US need to accelerate market diversification, while developing emerging markets such as Southeast Asia and the Middle East will become the focus of competition in H2. Meanwhile, new security review mechanisms in foreign investment, restrictions on high-tech transfer, and supply chain security risks require more prudent compliance assessment for overseas investment.
The volume-price dual rise in domestic sales and consumption structure rotation reflect that end demand is shifting from price sensitivity to quality and experience. The integration of new business formats and channels, such as live-streaming e-commerce and community group buying, is reshaping the link between brands and factories. For buyers, this means order fragmentation intensifies, and small-batch quick-response capability is no longer optional but a survival necessity.
ESG governance turning from a 'bonus item' to a 'ticket' is the hardest signal from the meeting. EU full value chain regulation requires enterprises to establish three ledgers: fiber composition and recycled ratio, structured testing, and restricted substances; while the US federal level is absent, California regulations continue to advance. In the next five years, competition logic will shift from price to circularity and data authenticity. The industry has completed 23 standards in the past four years, covering carbon footprint data for 19 categories, and the product digital passport aims to make industry efforts visible to the market, forming a closed loop.