The textile industry has long been one of China’s major manufacturing sectors, accounting for about 10% of China’s total exports. As the world’s largest producer and exporter of textiles and apparel, China’s textile industry is globally integrated across the entire value chain from fibers, yarns, fabrics to finished products.
However, the industry is undergoing rapid transformation amidst rising costs, growing environmental concerns, technological disruptions and shifts in trade policy. This article provides an in-depth look at the current state of China’s textile industry as well as emerging trends that will shape its future trajectory leading up to 2024.
Overview of China’s Textile Industry
China’s textile industry includes spinning, weaving, dyeing, finishing, apparel, home textiles and technical textiles. In 2021, China’s textile industry generated total revenues of $767 billion, accounting for about 1/4 of the global textile market. The industry employs over 4.5 million people directly and another 20 million people indirectly.
The textile industry is clustered regionally, with Guangdong, Jiangsu, Zhejiang, Shandong and Shanghai as major hubs. Guangdong in the Pearl River Delta leads in terms of output value, followed by Jiangsu. Inland provinces like Anhui, Hebei, Henan and Hubei also have sizable textile industries focused on cotton and wool production.
China is the world’s largest producer of cotton and man-made fibers like polyester. However, it relies heavily on imported natural fibers as well, including wool, silk, linen and cotton. In terms of finished products, China is a leading exporter of garments, accounting for over 36% of global clothing exports in 2021.
Key Players in China’s Textile Industry
The textile industry in China is quite fragmented, with thousands of small firms. However, consolidation has led to the emergence of several large companies:
- Texhong – One of the largest textile manufacturers in China, Texhong produces cotton, man-made fibers, garments and textile dyeing/finishing. It generated over $3 billion in revenues in 2021.
- Jiangsu Hengli Petrochemical – Major producer of polyester and chemical fibers. 2021 revenues exceeded $27 billion.
- Weiqiao Textile – Leading producer of cotton and textile dyeing/finishing with annual revenues over $7 billion.
- Youngor Group – Major integrated manufacturer of wool and wool products including fabrics, apparel and home textiles.
- Esquel Group – High-end shirt and apparel manufacturer with customers including Ralph Lauren, Tommy Hilfiger and Nike. Over $1 billion in annual revenues.
Regional industry clusters also have their respective market leaders. Shenzhou International Group and Keir Textile are leading companies in Zhejiang province, for example.
Technology and Innovation
Technology and automation have greatly increased productivity and efficiencies in China’s textile industry. Key innovations shaping the industry include:
- Automation in spinning, weaving and knitting to improve quality and outputs. Players like Jiangsu Lianfa Textile have fully automated production lines.
- Digital printing of textiles is replacing traditional printing methods. Zhejiang Yamei Textile has installed over 500 digital inkjet printing lines.
- Supply chain digitization and concepts like ‘smart factory’ and ‘smart warehousing’ are being adopted by large firms to enable real-time data analytics.
- Artificial intelligence is seeing widening usage in design, predictive analytics, quality control and other aspects along the value chain.
The Chinese government has identified smart manufacturing in textiles as a key priority under its ‘Made in China 2025’ plan. Industry experts predict almost 50% of all manufacturing activities in textiles could be automated by 2024.
Sustainability and Environmental Impact
With rising labor costs and pollution concerns, sustainability has become a pressing issue for China’s textile sector. The dyeing and finishing segment in particular generates high water pollution and waste. Recent policy and corporate initiatives to reduce environmental impact include:
- Government caps on water usage and discharge levels, closure of small high-polluting firms.
- Transition from coal-generated power to cleaner electricity sources like natural gas, solar and wind.
- Adoption of water-saving technologies like digital inkjet printing by textile mills.
- Brands and retailers demand sustainability from suppliers through certifications like OEKO-TEX Standard 100.
- Chinese firms increasing R&D in recycled fibers and fabrics, renewable raw materials.
However, problems persist due to poor enforcement of regulations. But with water scarcity and China’s carbon neutrality goal by 2060, sustainability will remain a pressing concern for the textile industry leading up to 2024.
Trade Policy and Global Supply Chains
China’s textile and apparel exports have thrived for years under global free trade policies and preferential access to major markets like the US and EU. But rising trade tensions and policy shifts may disrupt China’s export dominance:
- US tariffs imposed on Chinese goods under the US-China trade war, although the countries signed a ‘Phase One’ trade deal in 2020.
- US ban on Xinjiang cotton and products linked to forced labor allegations, affecting apparel supply chains.
- The US-Mexico-Canada trade agreement requires more rules of origin for textile products.
- EU is also proposing a new carbon tax on imports that may affect China.
- Brands are looking to diversify sourcing to other Asian countries like Vietnam and Bangladesh.
To counter global dynamics, China is refocusing on domestic consumption and its Belt and Road initiative. But reduced overseas demand due to trade policies will pose challenges through 2024.
Future Outlook and Trends
China’s 13th Five Year Plan projects textile industry output to reach RMB 3 trillion by 2025. However, the sector faces risks from slowing export demand, higher operating costs and environmental constraints. Key trends shaping its future include:
- Industry consolidation around larger, technologically advanced firms better equipped to meet global market requirements.
- Developing intelligent manufacturing systems and automation to improve productivity and quality.
- New synthetic fibers and functional fabrics for sportswear, protective clothing, medical textiles and smart textiles.
- Online and omni-channel retail will drive consumer reach for brands while compressing margins.
- Increasing investment in R&D for recycled fibers and cleaner chemistries aligned with sustainability goals.
- Potential reshoring or nearshoring of some manufacturing as wages rise in China and with risks of supply chain disruptions.
While risks exist, China’s large domestic market and continued innovation in its textile industry will foster growth in the coming years. Integrating sustainability practices and adapting to shifting trade policies will be critical for long-term competitiveness leading up to 2024 and beyond.
Q: What is the current size of the textile industry in China?
A: In 2021, China’s textile industry generated total revenues of $767 billion and accounted for about 1/4 of the global textile market. It is the world’s largest producer and exporter of textiles and apparel.
Q: What are the key textile industry hubs in China?
A: The major hubs are Guangdong, Jiangsu, Zhejiang, Shandong and Shanghai. Guangdong is the largest center, followed by Jiangsu. Inland provinces like Anhui, Hebei, Henan and Hubei also have sizable textile industries.
Q: Who are some of the major companies in China’s textile industry?
A: Key players include Texhong, Jiangsu Hengli Petrochemical, Weiqiao Textile, Youngor Group, Esquel Group, Shenzhou International, and Keir Textile. These large integrated manufacturers lead in capacities and output.
Q: How is technology and automation impacting China’s textile sector?
A: Automation, digital printing, supply chain digitization, smart factories, and AI are boosting productivity and quality. Over 50% of manufacturing activities could be automated by 2024 under the ‘Made in China 2025’ plan.
Q: What sustainability and environmental challenges is the industry facing?
A: Water pollution and waste from dyeing/finishing are major concerns. Initiatives are underway to reduce environmental impact through cleaner production, renewable energy, recycled materials and smarter chemistries.
Q: How will trade policies affect China’s textile industry globally leading up to 2024?
A: Rising trade tensions and policy shifts may disrupt China’s export dominance. But large domestic market and projects like Belt and Road Initiative will foster growth along with innovation.
Q: What is the future outlook for China’s textile industry through 2024?
A: Consolidation around larger firms, increased automation, new functional fabrics, online retail, sustainability practices and domestic consumption will shape positive growth. But export demand risks remain.