During the first six months of 2007, China's apparel retail sales grew at an annual rate of 28 percent, while textile and apparel exports grew at a an annual rate of 17.47 percent. Both of these growth levels exceeded the expansion in apparel output. Total January through June 2007 apparel output was estimated at 9.0487 billion pieces, reflecting only year-on-year gains of 14.3 percent. The knit apparel sector actually enjoyed the fastest growth, while children's apparel production only grew 2.4 percent.

This slower progress suggests that China's ability to maintain its export growth will soon fade, given the expansion in retail offtake. China could also soon become an importer of certain lower-cost mass products. The domestic apparel industry is attempting to build brands, improve quality and end its dependence on price.