Outlook for China’s Textile and Apparel Industry (2021-2025)

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.

In almost all markets, China is losing market shares for its apparel exports
China is playing a more significant role as a textile supplier for many apparel-exporting countries

#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.).

China’s annual clothing retail sales could exceed $415 billion by 2025

#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.

China will continue its efforts in “going global,” i.e., investing in textile and apparel factories overseas, mainly through the “Belt and Road Initiative

#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.

Author: Sheng Lu

Professor @ University of Delaware

8 thoughts on “Outlook for China’s Textile and Apparel Industry (2021-2025)”

  1. 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.

  2. It’s interesting to read that China is not concerned about overall growth, but working towards refining their technology. They are working on upgrading their equipment, which can make better textiles and more quality textiles . By gaining better tech machinery, China is becoming more advanced and creating products that will be with the future in mind. With growing awareness of sustainability, China is working on their environmental impact. China has been working more with exporting textiles, so it makes sense for the need to upgrade their tech and get down the process of making their textiles.

  3. I am thrilled to hear that China will no longer be focusing on ‘growing bigger’ as a country. The countries desire to create the most exports has helped boost the economy but simultaneously hurt its people. With the rise in popularity of fast fashion, China was one of the many countries relied upon for cheap mass production labor. This competitiveness amongst garment industries creates lower wages for its citizens and increases the mistreatment of workers in even worse environments. By taking the time to look over many of the industries they already dominant in, China can improve the overall efficiency of workers and ethical practices within the workplace. Even using their future technological advancements to help them aid in the recovery of ethical and environment sustainability in their work environments.

  4. 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.

  5. 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.

  6. 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.

  7. It’s very interesting to hear that China is no longer focusing on growing bigger and I am also happy to hear that they are using their power and position to focus on sustainability rather than low cost manufacturing. If China is able to follow through on this plan for sustainability, it will definitely be a big stepping stone in the fashion industry and they will have set an example for many other advanced countries to follow.

  8. I really enjoyed reading through China’s five year plan. I think it’s really great to see what they’re looking to accomplish within those next few years, especially that regarding a more circular economy. It’s important to note that China isn’t necessarily focused on growing bigger, but they’re thinking more about the technicalities and little changes. For example, improving and advancing their technology, upgrading their equipment, etc. I think now that China is planning on developing a greener and more sustainable textile and apparel industry, this will have a domino effect on other countries as well. I believe that the future of fashion will have a huge focus on sustainability and ethical practices. With that being said, I’m curious to see what will happen to fast fashion clothing stores like Zara and H&M. Will they follow the change and develop more sustainable products? Or will they no longer be in business once people begin to demand a more circular economy.

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