In July 2026, China's textile and apparel exports grew 7.6% year-on-year in USD terms, marking the fastest monthly growth this year. However, a closer look at product categories reveals a clear divergence: garment exports rose 4.4% month-on-month, while textile exports fell 8.7%. This imbalance highlights the sequential nature of the overseas restocking cycle—garments first, fabrics later—and signals a period of uneven profit recovery across the supply chain.
Structural Signals Behind the Data
According to official customs data, July exports totaled $28.79 billion, with garments reaching $16.45 billion, up 8.5% year-on-year, and textiles at $12.35 billion, up 6.4% but down sharply from the previous month. Cumulative exports from January to July reached $174.75 billion, up 2.4% year-on-year, expanding by one percentage point compared with the first half. Yet in RMB terms, cumulative exports fell 1.5% to 1,208.43 billion yuan, underscoring the impact of exchange rate fluctuations on domestic revenues.
Notably, cumulative textile exports grew 3.9% year-on-year, outpacing garments' 0.9%, indicating stronger long-term stability in upstream raw material chains. However, the sharp monthly decline in textiles suggests that overseas brands are currently consuming their own fabric inventories, delaying new purchases. This sequential pattern—garments first, fabrics later—is typical of inventory cycles but will temporarily widen the gap between upstream and downstream profitability.
Regional Imbalance and Key Risks
The US market remains the core growth engine, with exports to the US rising 12.5% year-on-year in the first half, the only major market with high growth. Exports to the EU were roughly flat, while demand from ASEAN, Japan, and South Korea continued to weaken. This single-market reliance makes overall export performance highly sensitive to US consumer sentiment. Any renewed destocking or weaker-than-expected consumption in the US could remove the key support for China's textile exports.
Moreover, the global trade environment remains complex, with geopolitical conflicts and tariff policy adjustments prompting overseas buyers to adopt conservative ordering practices. Small-batch, short-lead-time, and multiple-replenishment orders have become the norm, reducing the share of large, long-term contracts. This raises operational volatility for suppliers. For upstream fabric and yarn producers, the lag in overseas fabric procurement may persist until autumn/winter garment production ramps up, with a second round of restocking demand expected around September.