Behind the Order Recovery: "The Scissors Gap" Between High-end and Low-end Segments.

In 2025, the recovery of orders in the textile industry showed obvious structural differences. Taking cotton trading companies in Qingdao, Zhangjiagang, and other places as examples, inquiries and shipments of bonded Brazilian cotton and Australian cotton rebounded during the tariff buffer period, but US cotton was "unpopular" due to the high 25% tariff. This differentiation is directly reflected in the production side of enterprises: the operating rate of large-scale textile enterprises has stopped falling and is rebounding, while the trend of production restrictions among small and medium-sized enterprises is becoming increasingly severe. Survey data from the International Textile Manufacturers Federation (ITMF) further confirms this point — the operating rate of global yarn manufacturers is as high as 81%, while the functional textiles and home textiles sectors continue to experience a prolonged slump. Behind such "scissors gap" lies the rapid adaptability of high-end production capacity to market changes, while low-end enterprises are forced out of competition due to technological backwardness and cost pressures.

According to the General Administration of Customs' statistical bulletin, from January to April this year, the total export value of textiles and apparel nationwide reached 90.47 billion U.S. dollars, representing a year-on-year increase of 1.1%. Among these, textile exports amounted to 45.85 billion U.S. dollars, up 3.8% year-on-year; apparel exports totaled 44.62 billion U.S. dollars, down 1.5% year-on-year.Image source: China Textile Import and Export Chamber of Commerce

In RMB terms, China’s textile and apparel exports from January to April totaled 649.54 billion yuan, marking a year-on-year increase of 2.2%. Among these, textile exports reached 329.17 billion yuan, up 4.9% year-on-year, while apparel exports amounted to 320.37 billion yuan, showing a slight decline of 0.5% compared to the same period last year.

In the first four months of this year, China's textile and apparel exports remained stable overall, with textile exports continuing to grow and apparel exports still under downward pressure. Affected by factors such as US tariff policies, global trade frictions have intensified, the foundation for external demand recovery remains unstable, and the uncertainty of the industry's foreign trade development has increased. Under these circumstances, textile and apparel export enterprises must closely align with evolving trends, proactively adjust their business strategies, and focus on enhancing the added value of export products and the resilience of the supply chain. They should further tap into the potential of regional cooperation and accelerate integration into key markets such as RCEP and the Belt and Road Initiative. Meanwhile, it is essential to drive the deep integration of new growth drivers—including green and low-carbon initiatives, smart manufacturing, and digital trade—while fostering endogenous drivers for high-quality development. This will solidify the foundation for stable and upgraded foreign trade performance.

In 2025, the cost pressure on textile companies will come not only from raw materials, but also from the policy environment and exchange rate fluctuations. In April, China's cotton imports plummeted 82.2% year-on-year, and the price difference between domestic and imported cotton widened to 1,248 yuan per ton, which added to the difficulties faced by small and medium-sized enterprises that rely on imported cotton. At the same time, the continued appreciation of the RMB has further squeezed export profits, while the adjustment of US tariffs on small parcels from China (from 120% to 54%) has brought short-term benefits, but in the long run, the export of high value-added products remains "a game for a select few." Data from Guangdong's light industry and textile industry shows that in 2024, the industry's total profit will grow by 10.9%, but in the sub-sectors, the profit margin of non-woven fabrics is only 2.4%, and the rope, cord, and cable industry has seen its profit growth narrow to 4.4% due to rapid cost increases. This imbalance between costs and profits is accelerating the industry shakeout.

The "Watershed" of Technological Upgrading and Brand Building

Against the backdrop of excess low-end production capacity, technological upgrading and brand building have become key to companies' breakthroughs. Taking Guangdong as an example, in 2024, companies with high value-added products and strong export performance saw significant improvements in profitability, while the profit margins of traditional low-end manufacturers were further compressed. Tongkun Group's practices have validated this trend — by integrating production facilities to reduce costs to the industry's lowest level, its per-capita output has increased by 2.8 times. In contrast, the equipment and technological capabilities of small and medium-sized enterprises remain stuck at a "decade-old" level, unable to meet market demand for functional fabrics or adapt to industry trends toward smart manufacturing and green production. This technological divide is pushing textile companies toward two extremes: either upgrade or be phased out.

The 'Butterfly Effect' of Global Trade Frictions

The impact of U.S.-China tariff policy fluctuations on the textile industry has far exceeded expectations. Although the Joint Statement of the US-China Geneva Economic and Trade Talks has rolled back bilateral tariff levels to their status prior to April 2025, US restrictions on traceable cotton products from China continue to leave many SMEs helpless despite their efforts. The more far-reaching impact lies in the fact that Southeast Asia and Mexico's strict controls on re-export trade have made it much more difficult for Chinese textiles to be exported indirectly. This restructuring of the global supply chain has not only increased compliance costs for companies but also deprived small and medium-sized enterprises lacking an international presence of their last remaining space for survival. In contrast, leading companies have gradually reduced their reliance on a single market by expanding into RCEP and Belt and Road Initiative markets.

In 2025, the textile industry will not be about technical issues or funding issues, but rather a cruel game of "survival of the fittest." The recovery of orders for high-end production capacity will coexist with the survival crisis of low-end enterprises, and the struggle between cost pressure and technological upgrading will intensify. Meanwhile, the benefits of global trade friction and regional cooperation will rise and fall in tandem.