Since the beginning of this year, China’s textile industry has worked to overcome mounting pressures and difficulties. Facing external uncertainties and instability, such as escalating geopolitical conflicts, fluctuating energy prices, and rising trade barriers, the industry has fully tapped the potential of domestic demand and leveraged the resilience of its industrial system. Overall economic performance remained generally stable in the first half of the year, with all major operating indicators registering growth.

Looking ahead to the second half of the year, China’s textile industry will still need to address risks and challenges including weak market demand, difficulties in passing on rising costs, and volatility in the trade environment. The industry will continue to deepen transformation and upgrade, accelerate the development of a modern industrial system, and make every effort to further consolidate the foundations for high-quality development featuring stable growth, effective risk prevention, and accelerated transformation.

Production Growth Remains Stable but Moderates

In the first half of this year, production in the textile industry remained generally stable. However, operating rates and the pace of production and sales at textile enterprises slowed temporarily in the second quarter due to factors such as raw material price fluctuations triggered by the situation involving the United States, Israel, and Iran.

According to data from the National Bureau of Statistics, capacity utilization rates of the textile industry and the chemical fiber industry stood at 75.6% and 84.4%, respectively, in the first half of the year. Both remained above the national industrial average of 73.3%, but were down 2.2 and 1.6 percentage points, respectively, from the same period last year. The industrial added value of textile enterprises above designated size increased by 3% year-on-year, with the growth rate edging down by 0.1 percentage point from the same period last year. Industrial added value across the entire textile industry chain maintained growth. Sub-sectors including wool textiles, bast fiber textiles, and textile machinery achieved relatively strong double-digit growth. Among the 15 major categories of textile products monitored by the National Bureau of Statistics, output of 12 categories, including chemical fibers, yarn, fabric, printed and dyed fabric, nonwovens, and apparel, recorded steady growth.

Domestic Sales Maintain Sound Growth

Since the beginning of this year, China’s macroeconomy has remained within a reasonable range. The effects of various national policies to stimulate consumption have been released in a coordinated manner, supported by stronger holiday-economy momentum and active e-commerce promotions. As a result, domestic sales in the textile industry achieved sound growth in the first half of the year.

According to data from the National Bureau of Statistics, per capita expenditure on clothing by Chinese residents increased by 4.4% year-on-year in the first half of the year, 2.3 percentage points higher than in the same period last year. Retail sales of garments, footwear, hats, and knitted textiles by enterprises above designated size increased by 6.7% year-on-year, 3.6 percentage points faster than in the same period last year. The expansion of consumption scenarios, together with stronger integration of business formats and innovation in business models, helped drive steady growth in online retail. In the first half of the year, online retail sales of wearable goods nationwide increased by 6.2% year-on-year, with the growth rate 4.8 percentage points higher than in the same period last year.

Exports Remain Under Pressure but Demonstrate Resilience

Under multiple pressures including raw material price fluctuations, rising logistics costs, persistently weak demand, and intensifying international competition, China’s textile exports have continued to face challenges since the beginning of this year. Foreign trade enterprises have actively optimized their product and market structures and expanded trade models such as cross-border e-commerce, helping the industry maintain export resilience.

According to data from China Customs, China’s textile and apparel exports totaled US$145.96 billion in the first half of the year, up 1.4% year-on-year, with the growth rate 0.6 percentage point higher than in the same period last year. Textile exports maintained relatively strong competitiveness, reaching US$73.0 billion, up 3.5% year-on-year. Apparel exports contracted slightly to US$72.96 billion, down 0.7% year-on-year.

Performance across major export markets was mixed. In the first half of the year, China’s textile and apparel exports to the United States, Cambodia, Russia, and India all recorded double-digit year-on-year growth. Exports to the European Union grew slightly, while exports to Japan, ASEAN, and South Korea declined year-on-year.

Profitability Improves Overall, with Diverging Performance Across Sub-sectors

In the first half of this year, the overall profitability of China’s textile industry improved compared with the same period last year, although performance varied across different sub-sectors.

According to data from the National Bureau of Statistics, operating revenue of China’s 37,000 textile enterprises above designated size increased by 0.9% year-on-year in the first half of the year, while total profits rose by 19.2%. The growth rates were 3.9 and 28.6 percentage points higher, respectively, than in the same period last year. The operating profit margin stood at 3.2%, up 0.5 percentage point year-on-year.

Higher prices for textile raw materials and primary processed products supported improved profitability in upstream segments of the industrial chain. Total profits in the cotton spinning and chemical fiber industries rebounded significantly, while operating revenue and total profits in sectors including wool textiles, silk, and filament weaving all maintained growth. However, weak market demand and difficulties in passing on raw material costs continued to put pressure on profitability in midstream and downstream segments. Total profits in sub-sectors such as knitting, apparel, and home textiles declined year-on-year.

Investment Growth Slows from a High Base

Since the beginning of this year, textile enterprises have continued to promote high-end, intelligent, and green transformation and upgrading, focusing on key areas and weak links. However, as the industry had maintained a relatively high investment base over the previous two years and enterprises still faced considerable pressure to restore profitability, overall investment growth in the textile industry slowed.

According to data from the National Bureau of Statistics, completed fixed-asset investment in China’s textile industry, excluding rural households, increased by 9.4% year-on-year in the first half of the year, with the growth rate slowing by 5.1 percentage points from the same period last year. Investment in the apparel and chemical fiber industries decreased by 11% and 13% year-on-year, respectively.

Making Every Effort to Consolidate the Stable Operating Trend

Looking ahead to the second half of the year, the external environment facing the textile industry will remain highly complex.

On the demand side, uncertainty surrounding the industry’s foreign trade outlook has increased. Global economic growth remains weak, geopolitical conflicts continue to drag on and spill over, and renewed tariff increases by the United States have disrupted the international trade order, meaning export pressure remains significant. At the same time, the foundation for continued growth in domestic sales is not yet solid. Growth in urban and rural household incomes has slowed compared with the same period last year, and consumer confidence still needs further strengthening.

On the supply side, amid weak demand, raw material prices have become more volatile, market competition has intensified, and textile enterprises continue to face pressure in production and operations. Nevertheless, China’s macroeconomy continues to improve in both quality and structure. Stronger coordination of national policies to expand domestic demand will further strengthen the role of the domestic market as both an engine and stabilizer of growth. New consumption hotspots will continue to emerge in areas such as functional products, personalized design, new scenario-based experiences, and innovative retail formats, further consolidating the foundation for stable operation and high-quality development of the textile industry.

The textile industry will thoroughly implement the guiding principles of the Central Economic Work Conference, continue to focus on the goal of building a modern industrial system, steadily deepen transformation and upgrading toward high-end, intelligent, green, and integrated development, effectively prevent and defuse external risks, ensure stable and improving economic performance throughout the year, and strive to achieve a strong start to the 15th Five-Year Plan period (2026-2030).

Source: CHINA TEXTILE LEADER Express