China is the largest producer and exporter of textiles in the world. The textile industry is a traditional strength, covering raw material manufacturing, textile production, and garment manufacturing. China has created the largest and most complete textile industry system globally, leading in production capacity and international trade for many years. Policies like the "14th Five-Year Development Plan for the Textile Industry," the "Three-Year Action Plan for Digital Transformation (2022-2024)," and the "Implementation Plan for Quality Improvement in the Textile Industry (2023-2025)" have injected momentum into rapid and healthy industry growth. With the global industrial chain restructuring, the textile industry faces new opportunities and challenges. How can it adapt and innovate? Experts will discuss these issues.
China's Deep Integration into the International Supply Chain
What changes have occurred in the global textile manufacturing center? What is the current competitive landscape?
Xu Yingxin, Vice President of the China Textile Industry Federation, explains that the textile industry has thousands of years of history. The mechanized cotton textile industry began in the 1860s during the First Industrial Revolution. Since then, the global textile industry chain has undergone several shifts.
After the First Industrial Revolution, mechanized factories replaced small workshops, making Britain the first manufacturing center in textile history. Later, the center moved from Britain to the U.S., then to Western Europe and Japan. From the 1960s to the 1990s, developed countries shifted textile production to countries like South Korea and Singapore. However, due to limited resources, these countries had short-lived success, mainly in export-oriented and labor-intensive garment processing. Eventually, China became the new destination for textile industry transfer.
Today, developed countries still hold advantages in high-performance and functional fiber materials, high-end industrial textiles, and advanced textile equipment. Countries like Italy, France, and Germany maintain a small portion of traditional textile and garment processing, particularly in high-end wool fabrics.
In the 1970s, China established four synthetic fiber bases and began to build a complete textile industry system, laying a solid foundation for its development. After the reform and opening up, China actively used foreign investment to undertake international industrial transfer, expanding its scale and enriching its industrial chain. Joining the WTO unlocked vast international markets, enhancing China's textile industry competitiveness. Over time, the industry evolved from imitation to independent innovation, creating a comprehensive modern textile industry system that covers the entire manufacturing chain, from chemical fibers to textiles and garments.
Around 2010, rising manufacturing costs in China led many international buyers to seek cheaper supply countries. This shift allowed the textile industries in Southeast Asia and South Asia to grow rapidly. Since 2018, the industry has faced a complex international trade environment. Trends like "nearshoring" and "friendshoring" have gained importance in supply chain adjustments, with Latin America, Africa, and EU countries playing bigger roles. Chinese textile companies have engaged in international industrial layouts by acquiring raw material bases and high-end manufacturing enterprises, enhancing their competitive edge. As of now, China's textile industry has about $12 billion in direct foreign investment.
Unlike countries like Vietnam, which depend mainly on cost advantages, China's textile industry has developed a core competitiveness marked by technology, fashion, and sustainability. This makes its role in the international textile supply chain irreplaceable. China has achieved advanced levels in textile technology and equipment, breaking the monopoly of developed countries in high-tech fiber materials. The self-sufficiency rate for textile equipment exceeds 75%. Fashion design and brand development have shifted to a focus on original designs, with leading companies primarily using ODM (Original Design Manufacturer) models, enhancing product quality and consumer experience. China's recycling of synthetic fibers has surpassed 5 million tons, positioning the industry as a crucial player in promoting a low-carbon, green, and sustainable textile supply chain.
Despite moderate global economic recovery this year, challenges remain, including weak demand and a slowdown in textile and clothing consumption. In 2023, global textile and clothing exports fell 6.3%, highlighting the reality of low demand and insufficient orders.
The decline in demand has intensified competition in the international market, and trade protectionism has increased pressure on textile and garment companies. Some developing countries are expanding their product offerings by leveraging cost advantages and tariff benefits from developed nations. However, China's robust textile industry system continues to demonstrate resilience, maintaining export levels above $300 billion annually. The industry is focused on enhancing its competitiveness in technology, fashion, and sustainability while integrating into international supply chains.
The Resilient and Dynamic Textile Industry
As a traditional pillar of China’s economy, what are the textile industry's strengths, and how is it developing?
Xu Fujun, Vice Dean of the School of Textiles at Donghua University, notes that China is a leading producer of cotton, chemical fibers, and ramie. The stable supply of raw materials helps to lower production costs. The interconnected processes of raw material production, processing, and transportation support operational efficiency, boosting competitiveness. Additionally, China’s large population and rising consumption levels offer vast market opportunities, especially for mid- to high-end textiles and personalized products.
Over the years, China’s textile industry has grown from small to large and from weak to strong. It has built a complete division of labor system, covering the entire supply chain from raw materials to finished products. The structure includes three main parts: upstream, which focuses on producing and supplying textile raw materials; midstream, centered on spinning, weaving, and dyeing; and downstream, which includes garment and home textile manufacturing. Regions like the Yangtze River Delta and the Pearl River Delta house many advanced textile enterprises, significantly enhancing production efficiency and product quality.
Recently, the trend of clustering in the textile industry has become more evident. In 2023, 54 out of 59 counties with trillion-yuan economies were textile hubs. These clusters, such as those in Keqiao, Shengze, and Changshu, have developed into influential textile centers. They benefit from strong industry integration, improving regional economic coordination.
The textile industry is evolving to meet social development needs, enhancing its foundational capabilities and modernizing its supply chain. It is increasingly adopting intelligent and green development trends. China's textile industry plays a crucial role in supporting national strategies, providing key services for sectors like defense and aerospace. Significant advancements in functional and eco-friendly fibers have strengthened its position in the global market.
After years of rapid growth, China remains the largest producer and exporter of textiles. The total fiber processing volume accounts for over 50% of the global total, with chemical fiber production exceeding 70%. Textile and garment exports have consistently surpassed $300 billion, contributing over 50% to global textile export growth. In 2023, fiber processing remained stable at over 60 million tons, with profits from large textile enterprises growing by 7.2%. Investments in textiles, apparel, and chemical fibers have increased significantly, despite global economic slowdowns and complex international conditions.
While the textile industry demonstrates resilience, it also faces challenges, including structural transformation and insufficient internal momentum. Developing new productivity and fostering a faster, broader, and deeper innovation system will be key to driving high-quality development.
Integrating Development to Reshape Industry Chain Advantages
As one of the earliest regions to promote the integration of information technology and industrialization in the textile sector, how does Shandong leverage its resources to revitalize traditional industries?
Wang Xiao, Deputy Director of the Shandong Provincial Department of Industry and Information Technology, explains that the textile sector has been a pioneer in this integration. Shandong is a major textile province in China with a strong industrial foundation. The region covers the entire textile process, from fiber production to finished garments, creating a complete and competitive system.
However, Shandong's textile industry faces challenges due to industrial transfer, rising labor costs, and stricter environmental regulations. The industry needs to upgrade high-end capacities while addressing low-end surplus production. Despite many companies, most are at the lower end of the value chain, with outdated equipment and limited innovation capabilities.
Relying solely on traditional strategies is insufficient for sustainable development. Deeply integrating information technology with industrial processes is crucial for transforming and enhancing the textile industry. In Shandong, digital transformation has become key. The province is working on intelligent upgrades and digital transformation across the entire textile chain.
First, establishing benchmarks for digital transformation is crucial. Smart factories serve as hubs for material, information, and energy flows. The adoption of smart textile equipment and AGV robots fills automation gaps in traditional production lines, reducing costs effectively. For instance, Binzhou, a major textile cluster, has established a digital transformation project library to develop world-class brands. In 2023, its smart textile cluster achieved revenues of 184.4 billion yuan.
Second, building collaborative platforms is essential. The rise of personalized and fast fashion demands higher production efficiency. Shandong is leveraging industrial internet technology to connect people, machines, and materials, driving deep integration of traditional and digital economies. Weihai Dishang Group, for example, utilizes a cloud design center to pool design resources, improving efficiency.
Third, e-commerce has transformed the industry. In Jimo District, where over 70% of Shandong's textile and garment production occurs, numerous companies are leveraging live-streaming sales to boost their market presence. The area has established a digital economy park focused on live commerce, achieving impressive online sales.
By fostering an environment where businesses lead, supported by government initiatives and digital tools, Shandong's textile industry is steadily advancing toward modernization. Over 90% of large textile enterprises have embraced digital transformation, demonstrating strong growth.
The path to digital transformation is not straightforward; it requires ongoing effort and adaptability. As Shandong’s textile industry continues to enhance quality and efficiency, it aims to build a world-class modern textile system, showcasing its competitive edge. This approach not only revitalizes traditional sectors but also integrates seamlessly with innovative manufacturing capabilities, ensuring that products from companies like Weston Manufacturing stand out in both quality and spunlace market presence.
