The China National Textile and Apparel Council (CNTAC), the governing body of China’s textile and apparel industry, recently released its 14th five-year plan, detailing the development objectives, growth strategies, and priority tasks for China’s textile and apparel sector from 2021 to 2025. Unlike most market economies, the “five-year plan” serves as China’s top economic development guidelines. Therefore, companies at the micro-level study and follow the “five-year” plan closely to ensure their corporate business strategies align with the tones and visions set out by policymakers.
Based on the plan, several trends are worth watching regarding the future of China’s textile and apparel industry:
#1 Complicated by both economic and non-economic factors, the growth prospect for China’s textile and apparel industry is facing more uncertainties over the next five years.
#2 “Growing bigger” will no longer be a priority for China’s textile and apparel sector over the next five years. However, China has no intention to cut textile and apparel production capacity or shrink its size substantially either.
#3 China intends to develop a more sophisticated and high-tech-driven textile and apparel industry and engage in more value-added functions in the supply chain. Notably, in recent years, while China’s shares in the total world apparel exports declined, China is playing a more significant role as a textile supplier for many apparel exporting countries, especially in Asia.
#4 As the export market deteriorated, China plans to rely more heavily on its domestic market to support the textile and apparel industry’s growth. Industry sources predict that China’s annual clothing retail sales could exceed $415 billion by 2025 (vs. $347 billion in the U.S.).
#5 China will continue its efforts in “going global,” i.e., investing in textile and apparel factories overseas, mainly through the “Belt and Road Initiative.” According to CNTAC, China’s outbound foreign investments in the textile and apparel sector exceeded $6.7 billion from 2015 to 2020. Nearly $1.8 billion (or 26.6%) went to neighboring southeast Asian countries, including Vietnam, Cambodia, Thailand, Lao, and Myanmar.
#6 China intends to develop a “greener” and more sustainable textile and apparel industry. However, instead of simply reducing pollutants and water usage, China plans to develop a sustainability-led growth model, emphasizing areas including circular economy and creating new value-added products based on recycled material.
By Sheng Lu
Further reading: Lu,Sheng (2021). The plan for China textiles and apparel over the next 5 years. Just-Style.
FASH455 Global Apparel & Textile Trade and Sourcing 
It’s great to see what China has in store for the next five years. It’ll be really interesting if they begin focusing on advancing their technology and becoming more sophisticated, so their able to source for the textile and apparel industry, keeping up with both markets. It could grow their economy even if they aren’t planning on “getting bigger” in the textile and apparel sector. I also think it’ll be really great globally for China to become “greener” and look towards sustainability. I think the Gen Z and Millennial consumer market are getting more and more invested in the sustainable clothing and where their clothes come from. Fast fashion brands, such as Zara, Shein, H&M, all source their clothes from China due to the low costs and efficient timing. They’re able to crank out large orders in a short amount of time but if China begins to become more sustainable than I think that the fast fashion brands will begin to decrease.
With China focusing on developing a more high-tech-driven textile and apparel industry, they will overall hold more value when it comes to their supply chain. They are already one of the biggest sectors for textiles and apparel. Engaging in producing more sophisticated products will increase their role as a supplier and will ensure more success in this sector. It will also help with economic development and will introduce new types of items that consumers will be drawn to purchasing. They do not need to prioritize growing their textile and apparel sector because it is already so heavily relied by different sectors around the globe.
The specific goals of China’s five-year plan for the year 2021 to 2025 are some thing that is very interesting to note. It’s very intriguing to understand why China no longer considers growing bigger as a priority. As big as China is, they are starting to realize that money can be made elsewhere doing more within their production and manufacturing industries. For a while China was the leading exporter in the textile and apparel industry because of their cheap materials and quick mass production. mini developed countries explored sourcing opportunities in China. Moving forward, China is looking to obtain a more highly sophisticated and technologically driven textile and apparel industry. China has played a big role in the idea of globalization and it is not surprising to see that China is continuing its global exports by expanding their sourcing strategies overseas.
It’s interesting how China’s economy almost works backwards in that companies try to follow what the government has laid out rather than in western countries where industries are analyzed and policies are formed based on projections. I think that in this iteration of China’s five year plan it is possible to accelerate the textile industry as rising wages in China slow down the growth of apparel manufacturing. With the increase in technology and capital it is also possible for China to invest in the development of alternative methods of apparel manufacturing using automation. It is also nice to see that China is pursuing greener methods of production using recycled materials especially since the fashion industry produces a lot of waste.
Now many Chinese apparel enterprises and fabric textile enterprises are introducing many advanced intelligent types of equipment. In order to develop intelligent and integrated factories, the government has issued a policy, and every factory that uses intelligent equipment can get a certain subsidy every year. Although the United States is now resisting the import of clothing from China, due to its huge population advantage, China’s own clothing purchasing power is also very strong.
Although I believe China has much work to do to become socially responsible, I am encouraged by their efforts in environmental sustainability, particularly the development of a circular economy. As China becomes a more developed nation, and given its background in textile and apparel production, they could become the global leader in circular fashion infrastructure. Additionally, their retail market volume makes China an ideal location for textile recycling initiatives.
Several aspects of China’s five-year plan for its textile and apparel industry are very interesting to me. The first interesting aspect is that they are no longer focusing on “growth.” This is not to say that they will be decreasing or actively avoiding growth, as this is not a part of their plan. However, going forward, growth will not be one of China’s main priorities. This stood out to me because many other countries, including the US, place a lot of focus on growth. Another interesting and beneficial aspect is the focus on going greener. I think it’s incredibly important that this was included in the plan as many companies fail to take long-run action towards going greener. It also seems that this is not simply a case of greenwashing where they are simply going to cut back on the usage of pollutants and water but an actual beginning of a system-wide change. Including but not limited to, a greater push towards developing a circular economy.