Since the beginning of this year, the international environment has been complex and volatile, and the global economic and trade order has taken a heavy hit, leading to increased instability and uncertainty. In response to this complexity, China’s textile industry sticks to the overall goal of steady progress, actively promotes the optimization and adjustment of its industrial structure and deepens the transformation and upgrading of foreign trade. With the support of the country’s more proactive macro-policy measures, the economic trend in the first half of the year remained stable, exports continued to grow despite pressures, and resilience in development was strengthened and unleashed. Looking ahead to the second half of 2025, the textile industry still faces a complex and challenging development environment and maintaining a stable and healthy foundation for growth remains a significant challenge.

Production

In the first half of this year, capacity utilization in the textile industry stayed within a reasonable range, and overall production remained generally stable. According to the National Bureau of Statistics, capacity utilization rates of China’s textile and chemical fiber industries reached 77.8% and 86%, respectively, both above the national industrial capacity utilization level. In the first half, the industrial added value of textile companies above the designated size increased by 3.1% year-on-year, 1.5 percentage points lower than the same period last year. Most sectors of the industrial chain experienced stable production conditions, with wool and hemp textile industries seeing double-digit year-on-year growth in industrial added value, and sub-sectors such as chemical fiber, filament weaving, and technical textiles experiencing higher-than-average growth rates. According to the National Bureau of Statistics, output in nine out of fifteen major textile product categories grew year-on-year.

Domestic sales

Since the beginning of this year, the domestic macroeconomic situation has remained generally stable. The country has implemented targeted measures to boost consumption, which has helped sustain solid growth. China’s residents’ demand for clothing has continued to increase, and market supply keeps improving. Driven by these factors, domestic sales of textiles and apparel have experienced moderate growth. Data from the National Bureau of Statistics show that in the first half of the year, China’s residents’ per capita clothing expenditure rose by 2.1% year-on-year, 0.9 percentage points faster than in the first quarter. Total retail sales of apparel, foot and headwear, and knitted textiles increased by 3.1% year-on-year, 1.8 percentage points higher than the same period last year. Online apparel sales grew by 1.4% year-over-year, 1.5 percentage points higher than in the first quarter of this year. Chinese fashion trends, health textiles, and green as well as low-carbon products are gaining popularity, leading to steady sales growth in related categories on major e-commerce platforms. Live e-commerce and other innovative business models continue to enhance consumer engagement, with online shopping promotions driving growth in both online and offline sales of textiles and apparel.

Exports

Since the beginning of this year, the textile industry has encountered a more intricate and challenging international environment, particularly with the United States’ tariff policies in the second quarter, causing fluctuations in exports. China’s textile foreign trade enterprises are utilizing their competitive advantages across the entire industrial chain and their international positioning to adjust their business strategies swiftly, respond to external changes, and endeavor to mitigate foreign trade risks. According to China Customs Express, in the first half of the year, China’s textile and apparel exports totaled US$143.98 billion, marking a 0.8% increase year-on-year. Among the exported products, chemical fiber staples, textile yarns, fabrics, and other intermediate goods demonstrated solid growth, driving textile exports to reach US$70.52 billion, up 1.8% year-on-year. However, due to relatively weak overseas demand and the impact of U.S. tariff policies, China’s apparel exports faced increased pressure, amounting to US$73.46 billion in the first half, representing a 0.2% decline year-on-year. In key export markets, China’s textile and apparel exports to the United States declined at a faster rate, dropping by 5.3% in the first half of the year compared to last year. Meanwhile, foreign trade enterprises are actively expanding into diverse markets, with exports to the European Union, the United Kingdom, South Korea, Canada, Pakistan, Chile, Nigeria, and other trading partners showing strong growth.

Investment

China’s top economic planner, the National Development and Reform Commission, pledged to further remove market access barriers and revise the market access negative list for private enterprises in a timely manner, in a bid to accelerate the development of the private economy. The announced new moves aim to encourage greater private sector participation in major national projects and programs, including those aligned with major national strategies, building up security capacity in key areas, as well as the large-scale renewal of equipment and the trade-in of consumer goods. Under such support, leading enterprises are accelerating the transformation and upgrading of high-end, intelligent, and green technology. The textile industry’s investment in fixed assets continues to grow steadily, even based on a high level of the previous year. In the first half of this year, China’s textile, apparel, and chemical fiber industries showed year-on-year increases in fixed asset investment (excluding farmers) of 14.5%, 27%, and 10.6%, respectively, 0.2, 13, and 4.2 percentage points faster than the same period last year. Notably, investment growth in the textile and apparel industries continued to accelerate in the first quarter by 1 and 4.1 percentage points, respectively.

Operation Quality and Efficiency

Since the beginning of this year, due to weak demand and the complexity of the foreign trade situation, competition in both domestic and international markets has intensified, increasing the operational pressure on textile enterprises. In the first half of the year, the operating income of over 38,000 textile enterprises above the designated size decreased by 3% compared to the same period last year; total profit declined by 9.4%. The performance of key sectors in the industrial chain has become differentiated: revenue growth continues in filament weaving and technical textiles, profits in cotton textiles and knitting industries keep recovering, while earnings in hemp textiles and home textiles are gradually narrowing their decline; conversely, chemical fiber, printing and dyeing, apparel, and other sub-industries are still under pressure to improve efficiency. During this period, the operating income margin of textile enterprises above the designated size was 3%, 0.2 percentage points lower than the same period last year. Affected by factors such as rising inventory fluctuations, the turnover of total assets and finished goods for enterprises above the designated size slowed to 5.5% and 4.8%, respectively.

Future Prospect for the Second Half of 2025

In a complex situation, the large-scale and continuously evolving domestic demand market will sustain the textile industry’s pursuit of high-quality growth. China is at a critical stage of consumption upgrading, with 1.4 billion people offering significant market advantages. The diverse, personalized, and plentiful demand for textiles and clothing will create broad opportunities for technological and application innovation across the entire industry chain. Multi-scene, multi-mode online and offline consumption updates—such as culture, entertainment, healthcare, and green, low-carbon initiatives—will motivate the industry to diversify product offerings, enhance quality, and deeply integrate brands. Demand-driven forces will steer the industry toward high quality through market-led growth. Moreover, the second half of the year still has ample macro-policy space to support supply and demand improvements, promote enterprise recovery, boost market vitality, and ensure the industry’s smooth operation.

Source: CHINA TEXTILE LEADER Express