Fresh strain is emerging across China’s textile and clothing sector, with roughly 1,500 firms understood to have dropped off the state’s official industrial-enterprise register during the opening six months of the year.
Figures compiled by the Hong Kong General Chamber of Textiles indicate that “designated-size” textile enterprises numbered 20,806 between January and May — a year-on-year decline of 389 firms.
Meanwhile, the combined tally of “designated-size” textile, garment and apparel businesses shrank by around 1,101 across the same window.
Trade bodies reckon that, taken together, close to 1,490 firms across these two segments had disappeared from the statistical count by mid-year.
Beijing’s National Bureau of Statistics defines “designated-size” textile enterprises as those generating annual turnover of roughly $2.98 million.
Dropping out of this classification does not automatically signal insolvency. Firms may simply fall short of the revenue bar, undergo internal restructuring, or, in some cases, be formally wound up.
Mounting reports of plant shutdowns, coupled with overseas relocation by foreign-invested manufacturers, are deepening unease over the sector’s trajectory.
Yan, a Zhejiang-based textile business owner said contracts this year have skewed heavily towards brief, low-volume runs.
“Previously, a single order could keep production going for months at a stretch. These days, plenty of orders last only a matter of days, and there’s no guarantee of continuity,” Yan explained.
That squeeze is equally visible among overseas-backed producers operating in the country.
Chinese e-commerce platform AMZ 123 recently reported that Jiaxing Kanglong Textile Co., a US-funded operation based in Zhejiang, has begun scaling down its activities.
The firm reportedly intends to cease manufacturing by the close of 2026, shifting a portion of its denim output to Mexico. The company itself has not confirmed the account.
Chen, a garment manufacturer in the same province described widespread difficulty among factories trying to remain solvent as bookings evaporate.
“Without orders coming in but wages still owed to a large workforce, a factory bleeds cash daily — closure becomes the only option,” Chen said.
He noted a growing exodus of migrant labourers heading back to their home provinces from other regions.
The downturn is rippling through the entire supply network — spinners and fibre makers, dyeing and finishing operators, and finished-garment producers alike are all feeling the pinch.
Li, an employee at a foreign-owned manufacturer in the Yangtze River Delta said multinationals faced with softer Chinese demand are increasingly relocating output abroad or axing specific product lines while keeping sales and technical functions based in China.
“A number of firms have shifted manufacturing capacity to Vietnam and elsewhere,” Li noted. “Others have discontinued a single product range but hold onto their sales and support teams. Even suppliers further up the chain are now shutting down. Next year looks set to be tougher still.”
Official figures published by the National Bureau of Statistics on August 27 showed designated-size textile enterprises posting revenue of about US $184.6 billion across January to July, up 2.2% over same period of 2025. Overall profits climbed 7.9% to total $4.87 billion.
“By contrast, the apparel and clothing segment logged revenue of around $84 billion over the same period, down 3% annually, with total profits standing at $2.51 billion,” the Epoch Times reported.
Li was sceptical of the official statistics, arguing they fail to capture actual conditions in the field. “This industry’s decline has been underway for some time now — talk of rising profits simply doesn’t hold up. It’s pure fabrication,” he said
