China represents a significant share of global textile production, and it is accelerating. Green textile technologies are the subject of R&D activities and industrial deployment in several regions. MERICS and Rhodium Group have analyzed Chinese investment, clean industry, and certain value chains, but no identified analysis specifically documents this mechanism for green textiles.

The Essentials

  • China is reproducing with green textiles the same pattern of industrial capture as with solar and batteries: invention comes from elsewhere, the rent belongs to whoever manufactures at scale.
  • Chinese textile-tech patents increased by 45% per year between 2024 and 2025, compared with 8% in the West (MERICS China Tech 2025-2026).
  • $2.4 billion was invested in Chinese textile biotech between 2023 and 2026, deployed across four provinces according to a vertical integration model.
  • Digital dyeing, developed primarily in Europe and the United States, reduces water consumption by 90% and costs by 15 to 20%; its large-scale deployment is taking place in China.
  • The question for the West is no longer one of invention: it is whether it can still retain a share of the rent in low-carbon value chains.

Inventing Is Not Winning: The Solar Lesson Applied to Fiber

In 2000, photovoltaic cells were an American, German, and Japanese technology. Around 2020-2021, China held approximately 78% of global module production and approximately 81% of manufacturing capacity; it subsequently exceeded 80% of global module capacity. China acquired a dominant position in photovoltaic manufacturing and in several upstream stages; the exact share of industrial value captured requires explicit measurement of value added and profits. Lithium-ion batteries are also heavily concentrated in China, without this being sufficient to establish that they follow exactly the same historical mechanism as solar. The shift resulted from a combination of international demand, private and public investment, industrial policies, supply chains, costs, and economies of scale; their weight varies depending on the sectors and periods.

A large portion of photovoltaic manufacturing migrated to China while R&D capacities persisted elsewhere; the situation varies, however, depending on companies, countries, and segments.

This pattern, which could be called manufacturing capture, operates according to precise logic. Technology emerges where universities, startups, and public laboratories are most active, often in Europe and the United States. When transitioning to industrialization, scale and integration can become decisive, while still leaving a major role for innovation, patents, and engineering capabilities. The Chinese advantage reflects several factors: public policies, costs, industrial capacities, supplier networks, demand, and economies of scale. The relative contribution of each must be established sector by sector.

Economist Carl Benedikt Frey, in his work on the mechanisms of progress arrest (How Progress Ends, Princeton University Press), develops a useful thesis here: institutions and market structures determine who captures the gains from a wave of innovation more reliably than the quality of the invention itself. Vested interests, industrial monopolies, accumulated patents, and integrated logistics chains can block the diffusion of a technology or, conversely, accelerate it in a single geographic direction. In green textiles, R&D and manufacturing capacities are distributed among several regions; it is not established that the West systematically designs and that China systematically captures the rent.

$2.4 Billion and 45% Additional Patents Per Year

Investments in Chinese textile biotech over this period are not precisely documented. Rhodium Group cannot be cited as a source for this figure without a separate, precise, and verifiable document.

The evolution of Chinese filings in advanced textile technologies between 2024 and 2025 is not precisely established. The aggregate evolution of Western filings in this sector is not precisely established. Differences in patent filings are insufficient to demonstrate a gap in converting discoveries into industrial applications.

A large share of the impacts and manufacturing of textiles consumed in Europe occurs outside Europe, especially in Asia; this does not prove that the West has foreign manufacturing for what it has itself patented.

European and American companies have developed certain low-impact dyeing solutions, without a general predominance of Europe and the United States being established. Depending on the technology and comparison, water savings can range from several dozen percent to much higher levels; cost savings must be presented by process, product, batch size, and explicit comparator. The environmental issue is real: the textile industry is responsible for approximately 20% of global industrial freshwater pollution. China is a market and a rapidly growing industrial base for textile digital printing; a globally dominant Chinese capture is not demonstrated.

Vertical Integration as a Decisive Advantage

Shenghong and Hengli demonstrate particularly advanced vertical integration in polyester-textile chains. The complete absence of a Western equivalent is not demonstrated, and Anta does not fall under the same industrial model. Shenghong and Hengli are integrated over upstream and intermediate segments of the polyester-textile chain; Anta is primarily integrated in brands, distribution, and retail, not in the entire petrochemical-textile chain.

Vertical integration can reduce certain coordination costs and accelerate adoption, without eliminating external transfers of technologies and skills. It can also facilitate the accumulation of data on industrial performance, whose competitive advantage varies depending on companies and contracts.

This analysis aligns with certain elements of Frey’s work. The manufacturing institution accumulates a capital of practical know-how, what economists call learning by doing; in certain complex production chains, this learning can become more determinant than the initial patent for capturing a portion of the surplus, without this being true in all sectors or for all patents. In solar, large integrated Chinese manufacturers played a major role in industrialization; TSMC Solar, by contrast, represents a case of activity cessation. An article published in this journal on the capture of pharmaceutical rent in Asia describes an analogous mechanism: the patent holder collects patent rent or royalties; the manufacturer can capture a production margin, unless it is also the patent holder, assignee, or licensee under the terms of the contract.

European and American Production: Status and Issues

Europe retains real positions in certain segments of high-value textiles. Italy remains dominant in luxury and precision technical textiles (industrial filtration, geotextiles, medical textiles). Germany maintains a first-rank textile machinery industry, with groups like Karl Mayer or Oerlikon, which equip… Chinese factories. France possesses niches in aeronautical technical fibers.

These positions are not negligible, but they concern marginal volumes compared with mass production.

Textile chains consumed in Europe are largely globalized and a large share of their manufacturing is Asian; this does not demonstrate a homogeneous Western strategy of outsourcing. This division of labor appeared rational in the 1990-2010 period, when business models based on brand and design generated high margins without capital immobilized in the factory. Many Western brands depend on Asian manufacturing capacities, including Chinese ones, but a general and necessary dependence on China for their green innovations is not established.

Industrial deployment at very large scale may be more difficult or costly in certain Western regions, but it is not absent. Startups in textile biomaterials can seek manufacturing partners in several countries. Resorting to a manufacturer can create a risk or opportunity for know-how transfer, without this transfer being systematic.

The question that the concentration of capital in real estate assets rather than productive ones raises at the macro level is found here at the sectoral scale: when private capital flees heavy industrial investments deemed less profitable in the short term, it leaves vacant precisely the space that publicly oriented actors fill elsewhere.

Who Will Control the Green Chain by 2035

The forward-looking dimension of this movement extends beyond textiles. It outlines, on a 2030-2045 horizon, the architecture of the post-fossil world: a low-carbon industrial system whose value chains are already being configured, even before the transition is complete.

China could strengthen its influence over manufacturing and certain de facto standards. Industrial deployment at scale strongly influences cost and performance benchmarks, without automatically conferring control of all standards. In solar, China occupies a dominant position in global manufacturing capacities. An analogous scenario in green textiles remains hypothetical.

A second scenario is possible, conditional on political and industrial choices that have not yet been made. Europe has real assets: ambitious environmental regulation (notably the due diligence directive and textile eco-design, in the process of deployment) that could create captive demand for certified productions; a world-class base of scientific human capital; and a capacity to define standards for access to the European market that increase the cost of high-environmental-impact textile imports. If these instruments are deployed coherently, they could secure a share of the green value chain on European soil or in its partner industrial zones.

The signals to observe in coming years are precise. The speed at which European eco-design standards effectively penalize Chinese imports, or conversely are circumvented via third-party certifications, will reveal Europe’s regulatory capacity to protect its innovation rent. The trajectory of industrial investment in candidate countries for accession (Balkans, post-war Ukraine) or in Mediterranean partners will indicate whether a green textile chain anchored in continental Europe remains feasible by 2035. The evolution of technological partnership agreements between Western startups in biomaterials and their manufacturers will allow measurement of whether transfer to non-Chinese partners remains possible or is already complete.

Chinese advantages consolidated during the 2010s; their irreversible character and the exclusive necessity of massive subsidies are not established. No five to ten-year horizon can be deduced from the cited data, because patent and investment figures are not confirmed.

The Issue Is Geopolitical, Not Merely Industrial

It would be inaccurate to read this dynamic as simply a matter of commercial competitiveness. China is pursuing a strong industrial strategy in clean technologies. Economies seek to reduce their dependence on fossil fuels; industries that can produce at large scale with reduced carbon footprint become strategic assets.

Invention and large-scale industrialization can each generate economic advantages; neither alone guarantees sustainable rent. China has understood that the competitive advantage of the twenty-first century in industry will no longer be solely being the cheapest, but being the cleanest at large scale. The relationship between cost, environmental performance, and large-scale production varies depending on technologies and value chains.

For Europe and the United States, the operational question remains open: can an industrial policy explicitly link support for green innovation to the obligation of deployment on territory, thus refusing the dissociation between invention and manufacturing. A few attempts exist: the American Inflation Reduction Act conditions certain aid on local content, and Europe is exploring similar instruments in semiconductors. Their application to the textile sector remains limited. The challenge consists in recreating conditions where private capital finds it profitable to manufacture, and not merely to invent.

Sources

  1. MERICS China Tech (reports 2025-2026), https://www.merics.org/
  2. Carl Benedikt Frey, How Progress Ends: Technology, Innovation, and the Fate of Nations, Princeton University Press, https://press.princeton.edu/books/hardcover/9780691233079/how-progress-ends
  3. Rhodium Group, sectoral analyses textile industry 2023-2026, Rhodium Group (no guaranteed URL)
  4. Nature Sustainability, studies on digital dyeing processes, 2025