Since the beginning of this year, the external environment facing China’s textile industry has become increasingly complex and severe, influenced by multiple factors, including escalating geopolitical conflicts, rising protectionism, and energy price volatility. However, supported by China’s ultra-large-scale domestic demand market, the textile industry has fully leveraged the efficiency advantages of its complete industrial system, rising to the challenge by actively developing both domestic and international markets and optimizing the production and sales cycle. The negative impact of international factors on the industry’s stable operation has been effectively controlled. In the first quarter, the industry’s major operational indicators, including production, domestic sales, exports, and investment, all posted growth, indicating a generally stable start. Looking ahead, the textile industry still needs to actively address risks such as persistently weak external demand, raw material price fluctuations, and intensifying market competition, to ensure stable and orderly economic performance.

Production Growth Rate Stable but Moderating

After the Spring Festival this year, the resumption of work and production at textile enterprises proceeded generally well. However, since March, the escalation of the US-Israel-Iran situation has driven significant volatility in textile raw material prices at elevated levels, leading to a phased decline in enterprise capacity utilization. The industry’s production growth rate in the first quarter slightly moderated. Data from the National Bureau of Statistics shows that the capacity utilization rates for above-designated-size textile and chemical fiber industries in the first quarter were 76.5% and 84.7%, respectively, down 1.3 and 1.6 percentage points from the same period last year, but still better than the national industrial average of 73.6% for the same period. In the first quarter, the industrial value-added of above-designated-size textile enterprises grew 3.9% year-on-year, a 1.4 percentage-point decline from the same period last year. Industrial value added across the entire supply chain grew, with sub-industries such as wool textiles, linen textiles, and silk maintaining double-digit growth rates. Among the 15 major textile product categories tracked by the National Bureau of Statistics, 10 categories—including chemical fibers, fabrics, dyed and printed fabrics, nonwovens, and apparel—achieved steady production growth.

Domestic Sales Achieve Sound Growth

In the first quarter of this year, China’s macroeconomic performance got off to a good start. The government implemented special initiatives to boost consumption, and residents’ employment and income expectations improved. Holiday consumption remained active, supporting relatively strong growth in China’s domestic textile and apparel sales. According to data from the National Bureau of Statistics, per capita clothing consumption expenditure in the first quarter grew 5.6% year-on-year, 4.4 percentage points higher than in the same period last year. During the same period, retail sales of clothing, footwear, hats, and knitwear above the designated size increased 9.3% year-on-year, with the growth rate up 5.9 percentage points from the same period last year. New business models and formats are booming, quality supply is increasingly abundant, and with the continued improvement of multi-tiered logistics systems, online retail channels achieved relatively rapid growth. In the first quarter, national online retail sales of clothing categories grew 11.6% year-on-year, up 11.7 percentage points from the same period last year.

Export Situation Under Pressure with Slow Growth

Since the beginning of this year, the US-Israel-Iran conflict has continued to escalate, driving up global production and logistics costs, disrupting international supply chains, and suppressing consumer-side recovery. The export situation facing the textile industry remains relatively severe. Foreign trade enterprises have responded actively, accelerating market diversification layouts, promoting the expansion of new business forms such as cross-border e-commerce, and focusing on stabilizing orders and expanding markets. Despite the high base effect from the “rush to export” to the United States in the same period last year, the first-quarter export value still achieved growth, reaching a relatively high level for the same period in four years. China Customs data shows that in the first quarter of this year, China’s total textile and apparel exports (including Chapter 94 products) reached US$71.3 billion, up 1.4% year-on-year, with the growth rate 0.7 percentage points higher than the same period last year. Of this total, textile export competitiveness remained relatively stable, with export value reaching US$36.29 billion, up 2.6% year-on-year. Against the backdrop of relatively eased China-US trade relations, pressure on apparel exports has eased somewhat, with export value reaching US$35.01 billion, a marginal year-on-year increase of 0.2%. Export performance to major markets continued to diverge, with textile and apparel export value to the United States, Japan, and ASEAN declining year-on-year, while exports to Russia, Australia, Germany, India, Brazil, and other countries achieved double-digit or higher growth rates.

Enterprise Profitability Improvement Remains Slow

In the first quarter of this year, the profitability of textile enterprises was generally stable, but the pressure to recover and improve remained significant due to still-weak demand and rising raw material costs. National Bureau of Statistics data show that in the first quarter, the operating revenue of China’s 37,000 textile enterprises above the designated size decreased marginally by 0.4% year-on-year, with the growth rate falling by 1.4 percentage points compared with the same period last year. Total profit and operating revenue profit margin were both roughly on par with the same period last year. Among the main segments of the supply chain, the profitability of sub-industries such as linen textiles, silk, filament weaving, and textile machinery was better than the same period last year. However, the midstream and downstream sub-industries—including dyeing and printing, knitting, apparel, home textiles, and industrial textiles—saw varying degrees of decline in total profit compared to the same period last year.

Investment Growth Rate Declines from High Levels

In the first quarter of this year, textile enterprises continued to focus on key areas and weak links to promote the transformation and upgrading of high-end, intelligent, and green technologies. However, under pressure on profitability and a high base in the same period last year, the investment growth rate in some sub-industries of the supply chain declined. National Bureau of Statistics data show that in the first quarter, fixed asset investment in China’s textile industry (excluding rural households) grew 17.6% year-on-year, with the growth rate accelerating by 4.1 percentage points from the same period last year. Investment in the chemical fiber and apparel industries decreased by 4.1% and 11.8% year-on-year, respectively, ending the trend of continuous growth over the past two years.

Adapting Under Pressure and Deepening Transformation

2026 marks the opening year of the 15th Five-Year Plan period (2026-2030). Looking ahead, the development environment facing the textile industry remains complex and challenging. International geopolitical conflicts persist, and their negative impact on global textile supply chains will gradually permeate the entire production, distribution, and consumption chain, challenging textile enterprises’ ability to adapt flexibly. Industry exports and profitability will remain under pressure in the short term. At the same time, however, China’s macroeconomic policies are coordinating the promotion of boosting consumption and improving people’s livelihoods through the implementation of special initiatives to stimulate consumption, which will accelerate the release of diversified demand potential in areas such as Chinese chic, outdoor sports, health and elderly care, the experience economy, and smart products—playing a core role in supporting the stable development of the textile industry. Relevant government departments are implementing the high-quality development tasks of the 15th Five-Year Plan, taking multiple measures to thoroughly address involution-style competition. The gradual release of policy dividends, such as digitalization-specific green credit, will open an important window for textile enterprises to deepen transformation and upgrading and activate new quality productive forces. The textile industry will thoroughly implement the guiding principles of the Central Economic Work Conference, align with the new development requirements of “technology, fashion, green, and health” for the 15th Five-Year Plan period, persist in deepening transformation and upgrading, steadily advance a modern industrial system, strive to prevent and resolve external risks, ensure stable and positive economic performance for the full year, and achieve a good start to the 15th Five-Year Plan period.

Source: CHINA TEXTILE LEADER Express