July's export rebound exceeded the expectations of most foreign-trade companies. According to customs data, textile and apparel exports reached $28.79 billion in the month, up 7.6% year-on-year, the fastest monthly growth this year. But the figure masks a widening gap between garments and fabrics, and between the US market and neighboring regions. This recovery is more structural than broad-based.
Structural Divergence Behind the Data
A breakdown of July data reveals a clear preference in overseas procurement: garment exports hit $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% year-on-year but down 8.7% month-on-month. Both USD and RMB figures confirm that overseas brands are restocking finished garments first, delaying fabric purchases.
Cumulative exports for January–July reached $174.75 billion, up 2.4% year-on-year, accelerating by 1 percentage point from the first half. Textiles totaled $85.34 billion, up 3.9%, while garments reached $89.4 billion, up only 0.9%. This suggests that the upstream raw-material chain has stronger long-term stability, but its short-term order momentum lags behind.
Notably, in RMB terms, cumulative exports fell 1.5% to 1,208.43 billion yuan. Garments dropped 2.9%, while textiles edged up 0.1%. Exchange-rate fluctuations continue to affect revenue, urging companies to adopt hedging strategies when taking orders.
US Market Alone Drives Growth
The core driver of the July rebound is the reversal of the overseas inventory cycle. After prolonged destocking, European and American retail brands have low inventory levels. Entering the third-quarter autumn/winter preparation phase, they are now restocking aggressively. China's complete supply chain, from spinning and weaving to garment making, offers quick-response capabilities that Southeast Asian producers cannot easily replicate, enabling rapid order fulfillment.
However, regional performance is highly uneven. Exports to the US grew 12.5% year-on-year in the first half, the only core market with high growth. Exports to the EU were roughly flat, while demand from ASEAN, Japan, and South Korea continued to weaken. Over-reliance on a single market raises vulnerability: any downturn in US consumer demand would directly pressure overall export growth.
Three Major Risks to Sustainability
First, the global trade environment remains complex. Geopolitical conflicts and frequent tariff policy adjustments have made overseas buyers cautious, favoring small-batch, short-lead-time, and split orders over large long-term contracts. If trade barriers escalate again, the current recovery could quickly cool, leaving companies unable to stabilize capacity with long-term orders.
Second, market divergence amplifies uncertainty. The US alone supports growth, the EU offers limited gains, neighboring markets decline, and emerging markets have yet to form steady increments. If US retailers start destocking again, the entire textile and apparel export sector would lose its core growth pillar.
Third, supply-chain rhythm mismatch persists. The sharp month-on-month drop in textile exports in July indicates that overseas customers are first consuming their own fabric inventories, pausing purchases of greige goods and yarn. Upstream weaving and dyeing factories face limited short-term order growth, with profit recovery far slower than garment manufacturers. This polarization may last for several months.