In 2025, facing a complex and volatile external environment characterized by rapid changes and significantly increased challenges, China’s textile industry followed the principle of “stability while seeking progress”, steadily moving forward with structural adjustments and transformation toward higher-quality growth. Supported by an improving macroeconomic situation and proactive, effective policy actions, the sector saw growth across key operational indicators, including production, domestic sales, and investment, throughout the year. Although exports stayed under ongoing pressure, the industry demonstrated notable structural resilience. However, amid weak demand, rising competition, and growing risks in international trade, textile enterprises faced numerous operational challenges, and the path to stable and positive development remains fragile. As the inaugural year of China’s 15th Five-Year Plan, 2026 will pose further challenges for the textile industry. The sector must persist in deepening high-quality development, solidify its base for stable operations, and strive for a strong, innovative start to the new planning period.

Production: Steady but Slowing Growth

In 2025, capacity utilization in the textile industry remained within a reasonable range, with overall production stable. However, complex international dynamics and weak end-market demand led to a deceleration in output growth. According to data from the National Bureau of Statistics (NBS), capacity utilization rates for textile and chemical fiber enterprises reached 77.5% and 85.8%, respectively—both surpassing the national industrial average of 74.4%. Industrial value-added output from textile enterprises above the designated size grew by 1.8% year-on-year, a slowdown of 2.6 percentage points from 2024. Sub-sectors such as chemical fibers, wool textiles, hemp textiles, filament weaving, and technical textiles outperformed the industry average. Among the 15 major textile product categories tracked by the NBS, eight categories, including chemical fibers, grey cloth, and dyed fabrics, recorded year-on-year increases in output.

Domestic Sales: Moderate Growth Sustained

Supported by steady income growth among urban and rural residents and effective implementation of national policies to boost consumption and improve livelihoods, domestic demand for apparel and home textiles expanded in both scale and quality. Per capita expenditure on apparel rose by 2.2% in 2025. Retail sales of garments, footwear, and knitwear from enterprises above the designated size exceeded 1.5 trillion yuan, up 3.2% year-on-year. Innovations in business models, such as live-stream e-commerce and instant retail, as well as product and design advancements in areas like Guochao (Chinese chic), sportswear, outdoor gear, and sustainable fashion, contributed to stable growth in online sales. Online retail sales of clothing increased by 1.9% for the full year.

Exports: Pressure Met with Structural Resilience

Amid global economic slowdown, rising protectionism, and frequent adjustments to U.S. tariff policies, China’s textile industry responded proactively through supply-side innovation, market diversification, and strategic repositioning. Customs data show that total textile and apparel exports reached US$31.22 billion in 2025, down 2.5% year on year—yet this marks the sixth consecutive year above the US$30 billion threshold, underscoring strong underlying resilience. Among them, intermediate goods (e.g., chemical fibers, yarns, fabrics) grew robustly, with exports up 1.8%. Home and technical textile finished goods remained competitive, though exports dipped slightly by 1.2% due to reduced shipments to the U.S. Apparel exports faced greater pressure, declining 5.1%, impacted by tariffs and soft demand. Export markets showed clear diversification: while shipments to the U.S. and ASEAN contracted, exports to the EU, UK, Japan, Canada, and over 150 other trading partners registered positive growth.

Investment: Strong Growth Driven by Upgrading

Guided by national policies promoting “Two Major Priorities and Two New Areas” (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), leading textile enterprises accelerated high-end, intelligent, and green upgrades. Fixed-asset investment in the sector grew solidly despite a high base in 2024. NBS data reveals year-on-year increases of 4.3% in the textile industry, 5.2% in the apparel industry, and 12.3% in the chemical fibers industry, all outperforming the manufacturing sector nationwide. Chemical fiber investment notably accelerated, rising 7.6 percentage points from 2024 and 0.7 points from the first three quarters of 2025. A fourth-quarter survey by the China National Textile and Apparel Council (CNTAC) found that 53.7% of key enterprises prioritized capacity modernization—a share not seen since the third quarter of 2023.

Operational Efficiency: Mounting Pressures

Weak demand and export headwinds intensified competition, squeezing profitability. In 2025, 39,000 textile enterprises above the designated size reported a 8.2% year-on-year drop in revenue and a 16.1% decline in profits. The revenue profit margin stood at 3.5%, down 0.3 percentage points from 2024. Revenue shrank across nearly all sectors; only the silk sub-sector saw profit growth. Wool, hemp, filament weaving, and apparel faced significant earnings pressure. Asset turnover and finished-goods inventory turnover declined by 9% and 7%, respectively, while the SG&A ratio rose by 0.3 percentage points, reflecting declining operational efficiency and rising inventory burdens.

Charting the Course for a Strong Start to the 15th Five-Year Plan

Looking back, the textile industry navigated unprecedented external shocks during the 14th Five-Year Plan period (2021-2025), showcasing the strength of China’s comprehensive manufacturing system, its resilience under pressure, and deep-rooted momentum for high-quality development.

In 2026, uncertainties persist—escalating unilateralism, geopolitical tensions, volatile commodity markets, sluggish global growth, weak demand recovery, and ongoing supply chain realignments. The trend toward diversified, nearshored, and “friend-shored” supply chains remains entrenched, keeping export pressure high.

Yet, China’s macroeconomic resilience and its vast, upgrading domestic market offer critical support. With GDP surpassing 140 trillion yuan for the first time and household incomes growing in step with the economy, consumption potential is firmly anchored. Emerging opportunities lie in Chinese chic, silver-hair economy, sportswear, outdoor, and health-oriented segments. National efforts to expand domestic demand and foster new service consumption models will further unleash potential in scenario-based, integrated, and digital apparel consumption, driving greater investment in intelligent, green, and integrated transformation. Moreover, the deepening development of a unified national market, alongside policies to optimize governance and regulate competition, will strengthen the dynamic balance between supply and demand in the textile sector.

Moving forward, the industry will fully implement the guiding principles of the 20th CPC National Congress and its plenary sessions, align with the guiding principles of the Central Economic Work Conference, and anchor itself in the era-defining vision of “Technology, Fashion, Green, and Health”. By advancing high-quality development, accelerating to build a modern industrial system, and leveraging efficient resource allocation, deep innovation integration, and a self-reliant, complete industrial chain, China’s textile industry will continue to mitigate external risks, stabilize growth expectations, and make its due contribution to a successful launch of the 15th Five-Year Plan and the nation’s broader socio-economic development.

Source: CHINA TEXTILE LEADER Express