The COFCO Futures research team reviewed the evolution of global textile and apparel trade in a special report on the polyester supply chain. The core conclusion: the migration of downstream garment sewing to Southeast Asia and South Asia is irreversible, but China's advantage in upstream intermediate goods is hard to shake in the short term, and the industrial transfer is more like deep integration than one-way substitution.

Global textile and apparel trade totaled about $880.571 billion in 2024, of which apparel accounted for 62.5% ($549.919 billion) and textile intermediate goods 37.5% ($330.652 billion). Over the past decade, total volume grew at an average annual rate of about 2.6%, breaking through $900 billion in 2021 to reach a cyclical peak, then falling back in 2022-2023 due to high inflation in Europe and the US and retailer destocking, and recovering modestly from 2024. Europe and the US are the main consumption terminals, with the EU accounting for 35.5% of apparel imports, the US 15.5%, and Japan and South Korea 6.4%; their restocking pace directly shapes global trade trends.

Export patterns show clear divergence by segment: in 2024, China's textile exports accounted for 42.6% of the global total, ranking first, with the EU at 20.2%, India at 5.6%, and Vietnam at 3.4%; in apparel, China still ranked first with 32.1%, with Southeast Asia at 22.6% combined, but by 2024 China's apparel share had fallen to 29.6% while Southeast Asia rose to 23.9%, with Bangladesh and Vietnam at 6.9% and 6.5% respectively.

This round of relocation is led by international sportswear and casual brands, which continue to divert orders from China to avoid tariffs and diversify supply chain risks, with leading domestic textile firms following suit, laying out the full chain from yarn, weaving, dyeing and finishing to garments. As of 2024, China's textile industry had more than $11 billion in cumulative outward direct investment, covering over 100 countries and regions, with Southeast Asia accounting for more than 60%, and Vietnam as the top destination with cumulative textile and apparel investment exceeding $5 billion. From 2023 to 2026, upstream supporting capacity is accelerating its overseas expansion, and an integrated relocation trend is emerging.

However, Southeast Asia's supporting capacity is weak: Vietnam's domestic fabric self-sufficiency rate is below 16%, its cotton self-sufficiency rate is under 20%, and about 50% of India's and Vietnam's fibers, yarns and fabrics rely on Chinese imports. This means the decline in China's apparel export share is partly offset by growth in intermediate goods exports; the larger the garment capacity, the stronger the pull on Chinese yarn and fabrics, and the demand chain has evolved into China exporting polyester fibers, Southeast Asia processing them into garments, and then re-exporting them.

Japan's experience is cited as a reference: in 1955, Japanese textile exports accounted for 37.3% of its total exports; from the 1960s, under pressure from yen appreciation and rising labor costs, it shifted production to South Korea, Chinese Taiwan and Chinese Hong Kong, with its global share falling from 15% to 3% between 1955 and 1988. The proportion of low-end capacity transferred is estimated at about 70%-80%, but Japan retained high-end fibers and functional fabrics and maintained control through the "reverse commissioned processing" model—highly similar to China's current situation.

For the polyester industry, the author judges that the eventual overseas relocation ratio of low-end garment capacity could reach 70%-90%, and the growth rate of domestic direct polyester demand will enter a downward channel. Upstream bulk raw materials such as PTA and MEG will face long-term loose overall supply and a downward shift in profit centers, with cost competition and capacity elimination becoming the long-term main theme; structural opportunities lie in intermediate goods exports and overseas integrated capacity layout.

Source: [Market Focus] Polyester Special Report: The Evolution of the Textile and Apparel Industry · Originally published on 2026-08-13