China's textile and apparel exports rose 7.6% year-on-year in July 2026, the fastest monthly growth this year, but the gains are not evenly distributed across the supply chain. Customs data show garment exports reached $16.45 billion, up 8.5% year-on-year and 4.4% month-on-month, while textile exports were $12.35 billion, up 6.4% from a year earlier but down 8.7% month-on-month. The pattern of strong garments and weak fabrics reveals that overseas restocking is being transmitted along a path where end products lead and intermediate goods lag.
The Rhythm Mismatch Behind the Data
Cumulative figures further confirm this divergence. From January to July, total textile and apparel exports reached $174.75 billion, up 2.4% year-on-year, with textiles growing 3.9% and garments only 0.9%. While upstream raw materials show steadier cumulative growth, the monthly data tell a different story: textile exports fell 8.2% month-on-month in July, while garments rose 5.1%. This indicates that overseas brands, when restocking, prioritize finished garments while still digesting fabric and yarn inventories.
In RMB terms, cumulative exports from January to July were 1,208.43 billion yuan, down 1.5% year-on-year, with garments down 2.9% and textiles up 0.1%. These figures remind us that dollar-denominated growth is partly influenced by exchange rates, and the actual revenue improvement for domestic companies is limited. Both measurement methods point to the same fact: overseas purchasing is shifting from destocking to restocking, but the first wave of benefits is mainly landing in the garment segment.
US Market Alone Drives Growth, Regional Divergence Widens
Looking at regional structure, exports to the US grew 12.5% year-on-year in the first half, making it the only core market with high growth. Exports to the EU were roughly flat, while markets in ASEAN, Japan, and South Korea continued to weaken. This "single-point support" growth model means the industry's dependence on North American consumption is increasing. If US retail demand disappoints or trade policies shift, export growth will lose its core engine.
It is worth noting that US demand is not broad-based but concentrated in rigid categories for autumn/winter stocking. After a prolonged destocking phase, overseas brands now hold low inventory levels. As they enter the third-quarter procurement window for autumn/winter apparel, terminal orders are being released intensively. China's complete industry chain and quick-response capabilities allow companies to handle large orders in a short time, an advantage that Southeast Asian producers cannot easily replace in the short term.
Uneven Profit Distribution Across the Chain
Another feature of the current market is uneven profit distribution. Garment factories are running at full capacity, while weaving and dyeing mills see limited order growth. The month-on-month decline in textile exports in July suggests overseas clients are still consuming their own fabric inventories and postponing new purchases. This mismatch is expected to last until around September, when large-scale production of autumn/winter garments could trigger a second wave of fabric restocking.
For upstream enterprises, it is unwise to be overly pessimistic about short-term orders, but they should proactively adjust their customer mix. They can seek supporting orders from domestic garment exporters to compensate for the slowdown in overseas fabric procurement. Meanwhile, trade uncertainties remain high—geopolitical conflicts and tariff adjustments are frequent, overseas buyers are conservative, and orders are increasingly small-batch, short-lead-time, and split into multiple shipments. Large long-term orders are shrinking.