China’s textile and apparel industry is showing signs of further contraction, with around 1,500 companies estimated to have exited the regime’s official industrial-enterprise statistics during the first half of this year, according to a report by The Epoch Times (TET).
Data cited by the Hong Kong General Chamber of Textiles showed that the number of textile companies classified as “above-scale” declined by 389 from a year earlier to 20,806 between January and May. Over the same period, the number of “above-scale” companies in the textile, clothing and apparel sectors fell by around 1,101. Industry organisations estimate that approximately 1,490 companies across the two categories had exited the statistical pool by the first half of the year, as cited by TET.
According to China’s National Bureau of Statistics, “above-scale” textile companies are those with annual revenue of at least 20 million yuan ($2.98 million). However, leaving the category does not necessarily indicate that a company has gone bankrupt. Companies may fall below the revenue threshold, undergo restructuring or be declared bankrupt.
Reports of factory closures and foreign companies moving production overseas have further raised concerns about the outlook for China’s textile and apparel industry, the TET report said.
Several people from the industry spoke to The Epoch Times on condition of anonymity, citing concerns over possible reprisals. An owner of a textile business in Zhejiang Province said that orders this year have increasingly shifted toward short-term and small-volume contracts. Yan said that in the past, a single order could cover several months of production, whereas many orders now last only a few days and are not fixed.
The pressure on the sector is also being reflected in the operations of foreign-owned manufacturers. Chinese online trade platform AMZ 123 reported on September 9 that Jiaxing Kanglong Textile Co., a U.S.-invested company in Zhejiang, had begun the process of winding down its operations. According to the report, the company plans to stop production by the end of 2026, with some denim production expected to be transferred to Mexico. The company has not yet confirmed the report.
Meanwhile, official Chinese economic data present a more mixed picture of the textile sector. Data released by China’s National Bureau of Statistics on August 27 showed that above-scale textile companies recorded revenue of 1.238 trillion yuan ($184.6 billion) between January and July, representing a 2.2 per cent increase from the same period a year earlier. Their total profits increased by 7.9 per cent to 32.68 billion yuan ($4.87 billion).
The apparel and clothing sector, however, recorded revenue of 562.63 billion yuan ($84 billion) during the same period, down 3 per cent year over year. Total profits in the sector stood at 16.81 billion yuan ($2.51 billion), according to the official data cited by TET.
