In the first half of 2026, China's textile industry delivered a "stable but concerning" report card: production growth moderated, capacity utilization exceeded the national industrial average, domestic sales grew in both volume and price, but export market share to the US declined significantly. Behind these figures lies the interplay of energy price hikes from geopolitical conflicts and the upward momentum of the AI technology cycle, leading to slower growth and deepening divergence. For buyers and foreign trade enterprises, understanding this divergence is more important than focusing on aggregate data.
Event Background
On August 7, the China National Textile and Apparel Council (CNTAC) held its 2026 mid-year work conference in Beijing, combining online and offline formats with 1 main venue and 23 sub-venues. Zhang Qian, director of the planning research division, summarized the first-half performance as "intertwined forces and developmental divergence": global supply chain pressures dragged the economy, while the AI cycle provided upward support, resulting in divergent growth across countries and industries. Domestically, the industry achieved recovery on a stable production-sales base, with domestic sales rising in both volume and price, consumption structure shifting, and new business formats integrating effectively.
While the export base remained solid, market share in the US declined notably, posing multiple challenges ahead. Leaders of sub-associations for cotton textiles, chemical fibers, knitting, apparel, home textiles, and industrial textiles reported similar trends, all pointing to weaker momentum in the second half. This implies that enterprises relying on traditional markets and practices may feel greater growth pressure in the coming months.
Industry Impact
The policy environment is undergoing a deep shift. Zhao Mingxia, director of the industry department, noted that policies are transitioning from selective to inclusive and competitive, with reduced special subsidies and more market-oriented guidance. The 15th Five-Year Plan includes limited textile-specific initiatives, but windows remain in green low-carbon and digital transformation. Notably, textiles are not yet a carbon peak priority, but energy efficiency standard research should be advanced. Two textile-specific action plans—on standard-led upgrading (2026-2028) and excellent brand cultivation (2026-2028)—deserve close attention.
In foreign trade and investment, export support coexists with restrictions such as tax rebate cancellations, and new security review systems for outward investment add complexity. Technology transfer restrictions and supply chain security become new topics. On consumption, national trade-in subsidies do not cover textiles, but local policies may. The policy adjustment period requires flexible strategic responses.
Meanwhile, global sustainability rules are shifting from soft constraints to hard barriers. Hu Kehua, deputy director of the social responsibility office, emphasized digital product passports, carbon footprints, and restricted substance lists as key tools. The EU enforces full value chain regulation, requiring enterprises to maintain three ledgers: fiber composition and recycled ratio, structured testing, and restricted substances. Although US federal policy is absent, California regulations advance steadily. China is becoming a new engine with clear green transition goals, an upcoming ecological environment code, and carbon emission dual control in party and government assessments. Over the next five years, competition logic will shift from price to circularity and data authenticity.