Exports are still growing, but the pace is slowing — while imports are accelerating. In the first eight months of 2026, China exported US$98.03 billion of textile yarns, fabrics and related products, up just 3.7% year on year. Apparel and clothing accessories exports reached US$105.28 billion, growing an even weaker 2.5%. Over the same period, imports of textile yarns, fabrics and related products hit US$7.71 billion, surging 20.6% year on year. The real story here is not the export volume itself, but the widening growth gap — import growth is more than five times that of exports, and the trade surplus structure is being redefined.
Why Export Growth Is Losing Steam
The base was already high. In the first eight months of 2025, textile yarn and fabric exports had reached US$94.50 billion, while apparel and clothing accessories exports stood at US$102.74 billion. Maintaining positive growth on such a high base is no small feat, but 3.7% and 2.5% suggest that the marginal momentum from external demand is fading.
Looking at the product mix, the growth rate for textile yarns and fabrics slightly exceeds that of apparel, reflecting the resilience of intermediate goods trade over finished consumer products. This means overseas buyers are increasingly sourcing fabrics and yarns — semi-finished inputs — and completing garment assembly at destination markets to spread cost and tariff risks. For domestic fabric and yarn mills, this is a shift in order structure rather than a contraction in total volume.
Apparel export growth trailing textile exports also hints that the inventory cycle among end brands has not fully reversed. Restocking in European and US retail channels remains slow, and brand owners are cautious about finished garment procurement. But they are more flexible with upstream fabric sourcing, because fabrics can respond quickly to fast-replenishment orders. This divergence benefits fabric clusters such as Keqiao and Shengze, while putting pressure on garment-processing bases.
What the Import Surge Signals
At US$7.71 billion, imports appear modest against an export base measured in the hundreds of billions. But 20.6% growth deserves attention. In the same period of 2025, imports were only US$6.39 billion — more than US$1.3 billion less within a single year. This is not simply a domestic demand recovery; it reflects a widening structural gap in high-end raw materials and differentiated fabrics within China's textile supply chain.
Rapid growth in imported yarns and fabrics typically corresponds to two types of demand: first, domestic brands' reliance on imported high-end and functional fabrics; second, reverse output from production capacity in Southeast Asia and elsewhere into the Chinese market. The former indicates that domestic substitution still has shortcomings in high-end segments. The latter means regional supply chain competition is extending from export markets into China itself.
For buyers, import growth far exceeding export growth means more diversified fabric options in the domestic market — but also fiercer price competition. Imported and domestic fabrics are competing for the same brand customers. If domestic mills rely only on price advantages, profit margins will be squeezed further.
How Industrial Clusters Should Respond
Slowing export growth and surging imports appearing simultaneously indicate that China's textile industry is shifting from one-way output to two-way flows. For upstream chemical fiber and yarn enterprises, growth in imported yarns will erode mid-to-low-end market share. But for mills with differentiated product capabilities, this is a window of opportunity to substitute imports.
For fabric clusters like Keqiao and Shengze, the key is not defending export growth rates but raising the added value per unit of export. If 3.7% export growth corresponds to higher-priced functional fabrics, the quality of that growth is far superior to volume expansion. Conversely, if growth comes from low-price volume, profits will be consumed by exchange rates and raw material costs.
For garment export bases, 2.5% growth means the ceiling of the OEM model has become apparent. Transitioning from OEM to ODM, and extending from garment exports to fabric-plus-design service exports, is a realistic path to sustaining growth. Import data already signals that domestic demand for high-end fabrics is rising — and this demand can be served by domestic mills.