Abstract: China is a large textile and garment trader in the word and processing trade is of strategic importance in the national economy. However, China’s value chain of processing trade has long been at the medium- and low-end segments and revealed many problems such as “low-level, low value-added, high energy-consuming and high pollutant”. Under multiple pressures resulting from increasing costs, stronger competition and contracted overseas demand, the textile and garment processing trade in China is at a crossroad of transformation and upgrading. The paper analyzes the characteristics and status-quo of China’s textile and garment processing trade and the problems it faces and makes a profound approach to how to realize the transformation and upgrading of China’s textile and garment processing trade by borrowing the development modes from representative countries and regions.

Key words: textile and garment; processing trade; transformation and upgrading