Xinjiang launches 9 new policies to accelerate high-end, smart, and green transformation of textile industry

The Xinjiang Uygur Autonomous Region has unveiled a landmark set of nine policy measures aimed at driving the upgrading and transformation of its textile and garment industry.

Documented under "New Government Directive [2025] No. 26," the new policies emphasize high-end development, intelligent manufacturing, and green practices, marking a major strategic push to reshape the region's cotton-dominated textile sector. Among the newly released policies, three core measures stand out for domestic and foreign textile enterprises:

1.Promoting the shift from pure cotton to blended yarns: To address the long-standing reliance on single-product cotton spinning, the government will offer equipment upgrade subsidies, significantly reducing transformation costs for textile companies.

2.Direct sales subsidies to boost yarn production and consumption: To encourage the industry to move up the value chain, the policy introduces tiered subsidies of 50–200 yuan/ton for combed cotton and cotton-blend yarns, based on yarn count.

3.Targeted support for downstream garment and home textile enterprises: Aimed at strengthening the relatively weak downstream segments, this initiative focuses on enhancing product development and market competitiveness in apparel and home textiles.

Analysts and cotton-related enterprises believe the policy rollout will have profound implications for China's textile industry structure, development trends, and cotton demand - particularly in Xinjiang.

1.Rapid growth in Xinjiang's spinning capacity, especially for blended and synthetic yarns

With subsidies in place, Xinjiang's production of blended and synthetic yarns is expected to surge, further consolidating its dominance in the domestic market. Currently, Xinjiang holds a commanding position in mid-range yarns (C21S–C40S). Going forward, the region is likely to monopolize higher-count yarns (C40S and above), with rising shares of combed, blended, and high-count carded yarns. This trend could squeeze the survival space for spinning mills in other provinces such as Henan, Hubei, Shandong, Jiangsu, and Zhejiang.

2. Faster local utilization of Xinjiang cotton, less transfer to inland regions

The transformation of Xinjiang cotton into finished products within the region will accelerate, reducing the amount transferred to inland consumption hubs. A new pattern may emerge:

Xinjiang: Primarily uses local cotton, supplemented by imported cotton.

Inland regions: Rely more on imported cotton, with local and Xinjiang cotton playing a secondary role.

This shift may necessitate revisions to cotton import quotas, including quota size, application rules, and distribution methods, to better align with the evolving demand of spinning mills across the country. In parallel, inland textile enterprises may increasingly target export orders requiring cotton traceability, while Xinjiang-based firms may focus on non-traceable export orders and domestic sales.

3. Stronger momentum for Xinjiang's textile exports and domestic sales

The new policy package is expected to accelerate the growth of Xinjiang-made textiles and garments in both domestic and international markets. Leveraging initiatives like the Belt and Road and the China-Pakistan Economic Corridor, Xinjiang is poised to deepen ties with Central Asia, Europe, and Southeast Asia.

However, this expansion brings new challenges: intensifying competition between Xinjiang and inland enterprises in overseas markets, particularly in price, profit margins, and orders. Experts stress the need to avoid destructive competition and seek cooperative, differentiated strategies to ensure healthy development.

With these new policies in place, Xinjiang is poised to become a leading hub of modern textile manufacturing, offering opportunities - and challenges - for players across China's evolving textile supply chain.