Brief Analysis of the Economic Operation of China’s Knitting Industry in the First Half of 2025
Source: China Knitting Industry Association
In the first half of 2025, the external environment became significantly more uncertain due to intensified geopolitical tensions and the continued disruption from U.S. tariff policies. Benefiting from the implementation and effectiveness of various domestic consumption-boosting and demand-expansion policies, as well as the advancement of a diversified international market strategy, China’s knitting industry maintained overall operational stability, achieved modest export growth, and demonstrated resilience in development.
01
Revenue Growth Slows, Product Share Remains at a High Level
According to the National Bureau of Statistics, in the first half of 2025, operating revenue of large-scale knitting enterprises decreased by 1.57% year-on-year, with growth falling by 1.85 percentage points compared to the first five months and by 5.74 percentage points compared to Q1. Industry revenue growth began to slow in Q2 and turned negative year-on-year.
Breaking it down by the two main knitting sub-sectors: from January to June, revenue of large-scale knitted fabric enterprises decreased by 2.74% year-on-year, while revenue of large-scale knitted apparel enterprises decreased by 0.89% year-on-year.
In the first half of 2025, China’s large-scale textile and apparel enterprises saw garment output grow by 0.4% year-on-year; knitted apparel output rose by 1.38% year-on-year, with growth 0.55 percentage points higher than in Q1. Knitted apparel accounted for 69.25% of total garment output, up 0.24 percentage points from the same period last year. Thanks to recent technological progress and more diversified consumption scenarios—particularly the rapid growth of yoga wear, sun-protection clothing, shirts, and suit jackets—the share of knitted apparel continues to rise and is now at a historic high.
02
Operating Profit Under Pressure, Terminal Profit Decline Widens
In the first half of the year, the total profit of large-scale knitting enterprises fell by 11% year-on-year; the profit margin was 3.52%, down 0.37 percentage points from the same period last year. Performance diverged between the two major knitting sub-sectors: knitted fabrics maintained year-on-year profit growth, while knitted apparel saw a significant drop in profitability due to intensified competition in the terminal market and export tariffs.
Specifically:
Knitted fabrics: total profit of large-scale enterprises increased by 6.5% year-on-year; profit margin was 3.77%, up 0.33 percentage points; loss-making enterprises accounted for 22.18%, and total losses decreased by 5.37% year-on-year.
Knitted apparel: total profit of large-scale enterprises fell by 19.45% year-on-year; profit margin was 3.38%, down 0.78 percentage points; loss-making enterprises accounted for 29.6%, and total losses expanded by 8.87% year-on-year.
03
Exports Achieve Modest Growth, Diversification Strategy Offsets Tariff Impact
In the first half of the year, China’s knitting product exports totaled USD 50.853 billion. Despite sharp fluctuations in exports to the U.S. due to tariff policy impacts, strong performance in the EU and Japanese markets, along with steady growth in emerging markets such as Central Asia and South America, helped the industry achieve 1.26% year-on-year export growth under a diversified market strategy.
By category:
Knitted fabric exports: USD 12.353 billion, up 7.2% year-on-year.
Knitted apparel and accessories exports: USD 38.5 billion, down 0.5% year-on-year, with the decline narrowing 1.4 percentage points from Q1.
Knitted fabric exports to Bangladesh, Cambodia, and other countries grew relatively quickly in the first half but began to slow in Q2 under the impact of U.S. tariffs.
By market:
U.S.: January–June exports reached USD 8.892 billion, down 0.38% year-on-year, reversing from positive growth earlier in the year. Monthly exports showed sharp fluctuations due to tariff policy:
Jan–Feb: +7.76% (pre-tariff stockpiling)
Mar: +25.65%
Apr: −13.86% (145% tariff took effect)
May 12: tariffs suspended for 90 days; May exports fell 12.03%
Jun: decline narrowed to −4.73%
According to the U.S. Department of Commerce, from January to May U.S. imports of knitting products grew 6.69% year-on-year, but imports from China fell 9.84%, reducing China’s market share to 16.13% (down 2.96 percentage points). Bangladesh’s share rose by nearly 1 point, and Vietnam’s share rose 2.31 points, surpassing China for the first time at 19.30%.
EU: January–June exports were USD 7.515 billion, up 10.75% year-on-year. China’s share in EU knitting imports rebounded. Eurostat data shows that from January to May EU knitting product imports grew 14.21% year-on-year, with imports from China up 24.24%, increasing market share by 2.09 points, though Bangladesh remained ahead at 27.18%.
ASEAN: January–June exports were USD 9.219 billion, down 3.43% year-on-year. Since April, ASEAN has overtaken the U.S. as China’s largest knitting export market.
Japan: January–June exports were USD 3.005 billion, up 4.17% year-on-year, but China’s market share continued to decline, now at 49.76%.
Emerging markets such as Chile, Brazil, Turkey, and Uzbekistan saw notable export growth.
By product: pile fabrics, knitted sweaters, and knitted shirts performed well with year-on-year export growth of 11.07%, 9.97%, and 18.45%, respectively. T-shirts/vests and sportswear fell 11.42% and 11.11% due to high base effects last year.
By region: among the top five knitting export regions, Zhejiang, Jiangsu, and Shandong performed well, with exports up 9.4%, 6.6%, and 9.32% respectively. Guangdong and Fujian declined 6.65% and 14.39%. Xinjiang fell 22.4% due to last year’s high base. Hubei surged 42.32% thanks to recent government support.
04
Domestic Sales Provide Stability, Multiple Measures to Stimulate Consumption
Since the beginning of this year, continued disruption from U.S. tariff policies has significantly impacted knitting product exports, creating severe challenges for foreign trade enterprises. In response, China promptly implemented measures to boost consumption and expand domestic demand to offset overseas market losses, playing a key role in ensuring the healthy operation and survival of industry enterprises.
In the first half of 2025, China’s total retail sales of consumer goods reached RMB 24.5458 trillion, up 5.0% year-on-year. Retail sales of apparel, footwear, hats, and knitted textiles by large-scale retailers reached RMB 742.6 billion, up 3.1%. Online retail sales of physical wearable goods grew 1.4% year-on-year.
05
Outlook for the Second Half of 2025
The industry still faces a complex external environment. Global trade policy uncertainty is rising, and multi-dimensional transformation forces are reshaping the global industrial layout. Export uncertainty is increasing, compounded by insufficient domestic market momentum, leaving enterprises facing many operational challenges.
In domestic sales, consumption vitality remains insufficient and market potential needs further activation. However, with the gradual implementation of national consumption-boosting policies, domestic sales of knitting products will likely see some support. Certain niche knitting products, such as functional sports knitwear, fit well with current national trends toward healthy living and fitness, and still have growth potential in segmented markets.
In foreign trade, global economic growth remains weak and trade policy uncertainty continues to severely impact normal international trade. Moreover, developed countries are pushing procurement diversification strategies, driving a more vertical and dispersed global industrial chain, adding to the long-term uncertainty in China’s foreign trade environment.
Nevertheless, China’s complete supply chain advantages, flexible manufacturing capabilities, production quality management, and significant strengths in digitalization and intelligent manufacturing ensure that the knitting industry retains clear competitiveness compared to other producer countries. In addition to consolidating traditional markets, accelerating the diversification of international markets and paying close attention to the positive effects of cross-border e-commerce will be key.
