Experts: China's textile and clothing products are not optimistic about Japanese exports
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September 26, 2025
In a recent hearing held by the Shandong Provincial Department of Commerce on August 27, sources revealed that the outlook for China's textile and garment exports to Japan is becoming increasingly challenging. The reasons cited include rising raw material costs, reduced preferential tariff rates from Japan, and growing competition from low-cost Southeast Asian countries.
Shandong, one of China’s most economically significant provinces, saw its textile and apparel exports to Japan reach $2.3 billion between January and July this year. While this represents a 4.2% increase compared to the same period last year, it lags behind the national average growth of 12.9%. This indicates that the sector is facing more headwinds than other export industries.
A key factor contributing to this slowdown is the sharp rise in domestic cotton prices. Since the end of last year, the price of cotton in China has increased by 37% in the first half of 2024, reaching its highest level in 15 years. This surge is driven by declining domestic cotton production and lower global cotton inventories, which have created a tighter supply situation. As a result, Shandong-based textile companies are under significant cost pressure, leading to shrinking profit margins.
Additionally, Japan's decision to reduce its preferential tariff rates for imports from developing countries is further impacting Chinese textile exports. The Japanese government is considering revising its preferential tariff system, which could lead to higher tariffs on Chinese goods. With an estimated 20% of Japan’s preferential tariff line benefiting China, this change may make Chinese products less competitive in the Japanese market.
Moreover, several Southeast Asian countries are capitalizing on their low-cost advantage to challenge China’s position in the Japanese textile and apparel market. Countries like Cambodia, Bangladesh, and Thailand are competing fiercely in the low-end segment. Vietnam, in particular, is leveraging its Economic Partnership Agreement (EPA) with Japan, which allows it to enjoy zero-tariff treatment on its textile exports. This has helped Vietnam boost its exports to Japan by 23% in the first seven months of the year.
These combined factors—rising costs, shifting trade policies, and increasing regional competition—are making it harder for Chinese textile and garment producers to maintain their market share in Japan. As the industry navigates these challenges, it will need to adapt quickly to remain competitive in an evolving global market.