China’s textile and apparel makers are going through a painful industrial restructuring. While the country is still the world’s largest clothing exporter with an enormous production capacity, oversupply at home, high labor costs, and rising global protectionism have all eroded its competitiveness.

China’s market share by value in the global textile and clothing industry fell from 38.6 per cent in 2015 to 35.8 per cent in 2016.

Since 2014, exports of Chinese textiles and clothing to major apparel importing regions such as the US, European Union and Japan have declined sharply.

Exports of clothes and accessories fell by 0.4 per cent last year from 2016 while textiles exports saw an annual growth of 4.5 per cent last year.

Fewer US brands are looking to China for products even though the country remains the top sourcing destination for the industry worldwide. For many US brands, a third of their products now come from China, a third from Vietnam, and the rest is from other countries.

However China is playing an increasingly important role as a textile supplier for apparel exporting countries in Asia. Bangladesh’s textile imports from China, measured by value, rose from 39 per cent in 2005 to 47 per cent in 2015. Similar trends can be seen in Cambodia, Vietnam, Malaysia and other developing countries in Asia.