China has long held a dominant position in the global textile industry, earning its place as the "world’s factory." However, recent developments indicate significant changes in the landscape, with production shifting to Southeast Asia and new challenges emerging. This article explores the factors behind China’s historical rise in textiles, the ongoing industrial transfer, and the future of China’s textile sector in a rapidly evolving global economy.
China’s textile boom in the late 20th century was fueled by its vast and affordable labour force. During this period, rural-urban migration surged as millions of workers moved into industrial sectors, providing the textile industry with an ample and low-cost workforce.
The Chinese government’s heavy investment in infrastructure played a pivotal role in the rise of the industry.
These advancements positioned China as an efficient and cost-effective textile manufacturing hub.
China’s ability to produce textiles on a massive scale allowed manufacturers to achieve economies of scale, reducing costs.
Supportive government policies were critical to the industry’s development.
China’s accession to the World Trade Organization (WTO) in 2001 was a turning point, allowing its manufacturers to access global markets with fewer trade barriers.
China’s vertically integrated supply chains, from fibre production to finished goods, ensured efficiency and cost control. The country also offers a diverse product range, from basic garments to high-tech performance fabrics, meeting varied global demands.
As China’s economy matured, wages increased, diminishing the cost advantage that initially attracted global brands. For example, in 2023, Chinese factory workers earned between $982 and $1,685 per month, significantly higher than workers in Vietnam or Bangladesh.
Countries like Vietnam, Cambodia, and Bangladesh now offer lower labour costs, favourable trade agreements, and growing industrial bases, making them attractive alternatives for textile manufacturing.
Tariffs, such as those imposed during the U.S.-China trade war, have prompted brands to diversify their supply chains. Southeast Asian nations, with their free trade agreements and preferential treatment, have become key beneficiaries.
Stringent environmental regulations in China, coupled with the high costs of compliance, have led some companies to relocate to countries with more lenient standards.
To counter rising labour costs, China is investing heavily in automation and smart manufacturing. Advanced technologies such as robotics and AI are expected to automate nearly 50% of textile manufacturing activities by 2024.
With growing consumer demand for eco-friendly products, China is adopting sustainable practices such as:
Government regulations are also enforcing stricter environmental standards, which could position China as a leader in sustainable textile production.
As export growth slows, China is focusing on its domestic market. By 2025, clothing retail sales in China are projected to exceed $415 billion, driven by rising consumer spending.
China is shifting its focus to high-value products, such as technical textiles for medical, automotive, and sports applications. This move toward innovation aims to capture more lucrative market segments.
Through initiatives like the Belt and Road Initiative, China is investing in textile factories overseas, ensuring it remains integral to global supply chains despite industrial transfers.
While industrial transfers and rising costs present challenges, China is not losing its relevance in the global textile industry. Instead, the sector is evolving. By embracing technological advancements, sustainability, and high-value production, China is poised to remain a significant player, albeit in a different capacity.
China’s future in textiles will likely emphasize quality over quantity, with a focus on sustainability, innovation, and domestic growth. As the industry adapts to new realities, its transformation could set the stage for a more resilient and competitive textile sector in the decades to come.
