China's textile industry, a behemoth in the global market, navigated a complex landscape in 2024. Despite challenges like global economic uncertainties and fluctuating raw material prices, the sector demonstrated resilience and adaptability. Exports of textiles and apparel witnessed moderate growth, driven by both traditional and emerging economies. However, the industry also faced internal pressures, including rising labor costs and environmental concerns. A key theme that emerged was not a slowing of exports, but rather a strategic shift in destination markets.

Key trends

Overall growth: China's textile and garment exports rose by 2.2 per cent year-on-year, reaching $267 billion between January and November 2024. This growth was further amplified by a surge in December, exceeding expectations.

December rise: Preliminary data from China's General Administration of Customs Exports indicates in December 2024 witnessed an unexpected increase, with a year-on-year growth of 15.8 per cent, reaching $30.2 billion. This surge was largely attributed to anticipation of potential tariff increases by certain countries in January 2025.

Shifting focus: Fabric exports continued to dominate, comprising nearly 80 per cent of total textile exports in the first half of 2024. This highlights China's emphasis on value addition.

Market diversification: While traditional markets like the US and EU remained crucial, China actively explored new export destinations in Southeast Asia, Africa, and Latin America, demonstrating a strategic shift rather than a decline in exports.

Sustainability concerns: Growing awareness of environmental issues and stricter regulations pushed the industry towards sustainable practices and eco-friendly products. For example, companies like Lenzing and Ruyi invested heavily in sustainable fiber production, catering to the rising demand for eco-conscious fashion. This shift towards sustainability reflects the industry's commitment to reducing its environmental footprint.

Technological advancements: Automation and digitalization gained traction, improving efficiency and productivity across the supply chain.

Table: China textiles and apparel exports and destinations (Jan- Dec 2024)

December 2024 export growth by category

The data clearly shows a decrease in the share of exports to the US and EU, while ASEAN, Africa, and Latin America have gained prominence. This strategic shift is due to several factors. First is the diversification strategy to mitigate risks associated with over-reliance on specific markets that China has actively adopted. Take Shein the fast-fashion giant for example it continued aggressive expansion into new markets, leveraging its online platform and agile supply chain. Shein's success underscored the growing importance of e-commerce and consumer demand for trendy, affordable clothing.

Rapid economic growth in emerging markets too presents good opportunities for Chinese textile exporters. Meanwhile, trade tensions with the US and certain European countries have prompted China to explore alternative markets. Moreover China is actively forging regional trade agreements with countries in Southeast Asia, Africa, and Latin America, facilitating trade and reducing barriers.

Growth challenges

However, the industry as it moves ahead is facing its share of challenges. For example, increasing labor and raw material costs are major challenges in the way to maintain price competitiveness. Trade disputes and geopolitical uncertainties too have created volatility in the global market. This was further highlighted by the fear of increased tariffs in early 2025, leading to the December export surge. Stricter environmental regulations required significant investments in cleaner technologies. And growing demand in emerging markets, technological advancements, and the shift towards sustainable practices presented significant opportunities for growth and innovation.

Overall, China's textile industry in 2024 showed resilience and adaptability in the face of various challenges. While maintaining its dominance in the global market, the industry is undergoing a transformation, driven by sustainability concerns, technological advancements, and shifting consumer preferences. The unexpected rise in exports in December 2024 was partly due to anticipated tariff changes, further underscores the dynamic nature of the global trade environment. The data clearly illustrates that China's textile exports are not slowing down, but rather strategically shifting towards new and promising markets. The future of China's textile industry hinges on its ability to innovate, embrace sustainable practices, and navigate the complexities of the global economic landscape.