Since the beginning of this year, the international environment has evolved in a complex manner, and the global economic and trade order has experienced twists and turns. The cyclical structural contradictions in China’s macroeconomic operations are more pronounced, and the growth momentum of effective demand remains insufficient. In the face of excessive external pressure and an improving market situation, China’s textile industry promotes the optimization and adjustment of its industrial structure, deepening the transformation and upgrading of foreign trade, and striving to accumulate anti-risk resilience. In the first quarter, the industry’s output, domestic sales, investment, and other major economic indicators showed growth. Export data performed better than expected, leading to stable economic operation. Looking ahead to the next stage and throughout the year, the development of the textile industry’s external environment will become more complex and severe; however, there remains a foundation, ability, and confidence to cope with various types of risks and challenges, striving to accumulate new momentum toward high-quality development.

The transformation and upgrading of output showed solid progress

After the Spring Festival this year, the resumed production progress of textile enterprises generally went well, and capacity utilization levels maintained a rebound, achieving a smooth start for industry production in the first quarter. National Bureau of Statistics data show that in the first quarter, the capacity utilization rate of China’s textile and chemical fiber industries reached 77.8% and 86.3%, which are higher than the national industrial capacity utilization level (74.1%) during the same period. In the first quarter, the national industrial added value of textile enterprises above designated size increased by 5.3% year-on-year, with the growth rate 0.4 percentage points higher than last year. The production of the whole textile industry chain achieved positive growth, with hemp textiles, filament weaving, and other sub-sectors maintaining double-digit growth. Among the 15 major textile products the National Bureau of Statistics (NBS) counted, the output of 10 major categories, such as chemical fibers, yarn, fabrics, nonwovens, and garments, achieved steady growth.

Backbone textile enterprises accelerated their transformation and upgrade in high-end, intelligent, and sustainable technology. Fixed asset investment in the textile industry has maintained a relatively fast growth trend since 2024. According to data from the National Bureau of Statistics, fixed asset investment in China’s textile industry, apparel industry, and chemical fiber industry grew by 13.5%, 22.9%, and 15.8% year-on-year, respectively, in the first quarter, which is 1.1, 5.4, and 9.2 percentage points higher than the same period last year.

Foreign trade encountered unexpected complexities, revealing resilience under pressure

Since the beginning of this year, the international environment has become increasingly intertwined, and China’s textile industry exports have faced unprecedented pressure. However, the industry plays a vital role within the complete industrial system and benefits from advanced manufacturing advantages, demonstrating continuous export resilience. According to China Customs, China’s textile and apparel exports totaled US$66.28 billion in the first quarter, reflecting a 1% year-on-year increase and reaching a record high. China’s chemical fiber staple, yarns, and other major intermediate products have also maintained strong growth momentum, supporting the stable operation of the international supply chain. Textile exports amounted to US$33.27 billion in the first quarter, experiencing a year-on-year increase of 4%. However, due to weak overseas end demand, apparel exports faced greater pressure. Apparel exports totaled US$33.01 billion in the first quarter, showing a decline of 1.9% year-on-year. China’s textile foreign trade enterprises actively build a diversified international market and continue to deepen cooperation within the international supply chain. Textile and apparel exports to the United States, the European Union, Japan, Africa, Turkey, Bangladesh, and other trading partners in the first quarter have sustained good growth, injecting strength to stabilize global textile and apparel trade cooperation.

Domestic sales achieve moderate growth, China chic, sports and outdoor lead the public fashion

In the first quarter, domestic sales of textiles and apparel saw moderate growth, supported by the stable domestic macroeconomic situation, upgrades, trade-ins of consumer goods, and the Spring Festival holiday. Data from the National Bureau of Statistics indicate that national residents’ per capita consumption expenditure on clothing rose 1.2% year-on-year during the first quarter. Retail sales of clothing, footwear, headwear, and knitted textiles in China above designated size, grew by 3.4% year-on-year, 0.9 percentage points higher than the same period last year. However, consumption demand holds great potential, alongside a high base of e-commerce retail for textiles and clothing. Consequently, online retail clothing sales in the country fell slightly by 0.1% year-on-year in the first quarter. China chic, sportswear, and outdoor wear performed well, with market sales of China chic products and outdoor apparel and footwear surging by 120% and 50% year-on-year, respectively, since the start of this year.

Benefit improvement pressure remains, and the development of confidence needs to be consolidated

The industry’s production and sales situation was generally stable in the first quarter of this year. The foreign trade environment has not significantly worsened, and the scale of profits for textile enterprises is roughly the same as during the same period last year. However, the pressure to improve profits has increased. In the first quarter, the operating income of China’s textile enterprises above designated size increased by 1% year-on-year, which is 7.1 percentage points lower than the same period last year. Total profits fell by 0.3% year-on-year. The efficiency performance across the major sectors in the industrial chain shows differentiation. Cotton textiles, woolen textiles, printing and dyeing, knitting, technical textiles, and other sub-industries achieved synchronized growth in both operating income and total profits. However, hemp textiles, clothing, home textiles, and other sub-industries still face notable profit improvement pressure. Enterprise profitability and some operating indicators slowed in the first quarter, with textile enterprises reporting an operating income margin of 2.5%, unchanged from last year. The turnover of finished goods and total asset turnover rates both declined year-on-year. Due to the complexity of the situation, business development confidence needs to be strengthened. According to the China National Textile and Apparel Council, the comprehensive prosperity index for China’s textile industry is at 42.8%, marking a low level in recent years.

The development situation is complex and severe

Looking ahead to this year, China’s textile industry will face a more complex and severe situation. The uncertainty in the foreign trade environment will pose additional challenges for textile enterprises. However, national policy support will assist the textile industry in better activating demand. Areas such as the ice and snow economy, silver hair consumption, Chinese chic apparel, and healthcare are expected to rapidly release consumer demand, boosting confidence among private enterprises. Accelerating the cultivation of new quality productive forces, the application of high technology, including artificial intelligence, will continue to promote breakthroughs, enabling high-end, intelligent, and green transformations and upgrades in investment. Support from the domestic demand market will further enhance the textile industry, gradually forming a new pattern of stable development driven by domestic demand and innovation. Although there are short-term pressures in foreign trade, the advantages of China’s textile industry system and its advanced manufacturing capabilities will remain a crucial force for maintaining the efficient and stable operation of the global textile supply chain for a long time.

Source: CHINA TEXTILE LEADER Express