The July export data offered relief, but a closer look reveals an uneven recovery. According to customs data, textile and apparel exports reached $28.79 billion in July 2026, up 7.6% year-on-year, the fastest monthly growth this year. However, apparel exports surged 8.5%, while textiles grew only 6.4% and fell 8.7% month-on-month. The gap between garments and fabrics reveals the true structure of this rebound: overseas restocking is filling retail shelves, not factory warehouses.
Structural mismatch behind the numbers
The divergence is not accidental. Cumulative exports from January to July reached $174.75 billion, up 2.4% year-on-year, with textiles up 3.9% but apparel up only 0.9%. This suggests upstream materials showed stronger resilience earlier, but in July, apparel suddenly accelerated while textiles dropped sharply month-on-month. This indicates that after the destocking cycle, overseas brands prioritized finished garments, delaying purchases of fabrics and yarns. For weaving and dyeing mills, this means limited short-term order growth and slower profit recovery compared to garment factories.
RMB-denominated data confirms the trend. From January to July, cumulative exports totaled 1,208.43 billion yuan, down 1.5% year-on-year, with textiles up 0.1% and apparel down 2.9%. In July alone, exports reached 196.26 billion yuan, up 2.3% year-on-year but down 1.1% month-on-month; textiles fell 8.2% month-on-month. Both measurement methods point to the same conclusion: the restocking sequence is 'garments first, fabrics later,' not a statistical artifact.
US market dominance heightens structural risks
Regional divergence is even more concerning than category divergence. In the first half, exports to the US grew 12.5% year-on-year, the only core market with high growth; exports to the EU were flat, while demand from ASEAN, Japan, and Korea weakened. This means current growth relies heavily on a single market. If US consumption falters, overall exports will face immediate pressure. Moreover, this dependence is not based on a strong US economy but on an inventory cycle reversal—after prolonged destocking, brands are now restocking, a temporary demand release.
Purchasing behavior shows overseas clients are increasingly cautious, favoring small batches, short lead times, and split shipments over large long-term orders. This model benefits garment factories, as China's fast-response capability is a core advantage, but for fabric suppliers, order fragmentation complicates production planning and raises inventory risks. Geopolitical tensions and trade policy uncertainties also make buyers hesitant; if trade barriers intensify, the recovery could quickly cool.