What: As Covid-19 restrictions lessen in China, the economy is entering a new phase of recovery.

Why it is important: Insights on China’s recovery are of interest as the country’s reopening provides opportunities for the fashion industry.

Restrictions lifted at the end of 2022 have sparked a new phase of recovery as the Chinese economy hopes to bottom out. However, consumer psychology and market demands have changed dramatically, leaving doubt about when the market will bounce back and when business will return to normal.

The Chinese luxury market may recover faster than expected as it was the least hit by the weakened consumer market. The Chinese New Year strongly boosted luxury consumption in many parts of the country and the sector is expected to see significant growth in the second quarter of 2023 and an annual growth of 15% , which is higher than the global market average of 9%. Global textile and apparel demand is also expected to increase in the second quarter, giving textile companies an opportunity to clear their excess inventories

While almost every city is regaining its former vitality, the industry still faces many challenges. Many brands are in an adjustment phase as they face economic pressure and are advised to focus more on the adjustment than recovery.

China’s footwear market, which is very important for producers and distributors worldwide, will see a wave of increased consumption after the New Year or early April. After the pandemic seriously impacted international brands, experts advise brands to find the right region, customers, and climate as each market has its own climate and culture.

Private enterprises in China are regarded as the roots of the Chinese economy and China’s local fashion enterprises, which are privately owned, have become pillars of the industry. As the private economy has grown and flourished into a pillar of the national economy, the government issued a strategic plan for expanding domestic demand and cultivating a domestic demand system.

While the fashion industry is resilient, uncertainty still remains for 2023 as the world landscape has changed dramatically.

Is China’s fashion industry recovering since COVID-19 restrictions have lifted?