Cotton route, destination Uzbekistan: is China seeking a new gateway to supply Europe?

The news went relatively unnoticed. It deserves, however, to be examined closely.

China and Uzbekistan want to strengthen their cooperation in the textile industry. The agenda includes raw material supply; technology transfer; blended fabric production; dyeing and finishing technologies; automation; and the creation of joint production capacities. Crucially, Chinese companies are reportedly considering making Uzbekistan a “regional production and trade hub”, particularly for the Central Asian, CIS, and European Union markets.

No overall investment amount or production volume has been announced at this stage. This is precisely why the announcement should not be over-interpreted. It is not yet a major, quantified industrial agreement, but rather the construction of a framework for cooperation.

This rapprochement is actually a continuation of well-established exchanges. In December 2025, Uzbek authorities and the China Wenren group had already agreed on a project for a textile industrial park dedicated to blended fabrics, the transfer of Chinese capacity, and garment manufacturing for export. A few weeks earlier, the Uzbek agency for light industry development began discussions with Xinjiang Lihua Group, an integrated Chinese giant that operates from seed to finished product.

For China, the issue is not just about cheaper production

The strategy of Chinese manufacturers is a response to the tightening of global trade rules. Direct exports from Chinese factories are facing traceability requirements imposed by Washington and Brussels. In the textile industry, the origin of the cotton, factory audits, and the identification of subcontractors now carry as much weight as manufacturing costs in purchasing decisions.

Tashkent has specific assets to meet these new specifications. The country is one of the world's leading cotton producers, with about one million tonnes per year, according to the World Bank. It has also been transforming its model for several years, moving from exporting raw cotton to processing it locally into yarn, fabric, and clothing.

This transformation is beginning to reach a significant scale. In 2025, the Uzbek textile industry accounted for approximately 2.6 billion dollars in exports to 75 countries, with 1,409 exporting companies. Exports of finished textile products increased by 18.5 percent year-over-year. For 2026, the government is now targeting four billion dollars in exports, including 700 million dollars through e-commerce platforms. The sector already employed 623,000 people in 2025.

Uzbekistan's ambition has scaled up. Tashkent now intends to establish itself as an integrated garment manufacturing centre.

An industrial capacity that is still modest, but rapidly expanding

The capacity figures give an idea of the ambition. For 2026, the government plans to mobilise 2.2 billion dollars of investment in the textile sector. These investments are intended to create additional capacity for 207,000 tonnes of synthetic and blended yarns; 397 million square metres of fabric; 224 million pieces of clothing and knitwear; and 108 million square metres of dyeing capacity.

For comparison, 397 million square metres of fabric represents a considerable industrial capacity for a country whose annual textile exports are still below three billion dollars.

Uzbekistan also already has an industrial base of more than 7,000 companies involved in cotton processing, according to the PwC investment guide. Higher value-added products, such as textiles, knitwear, and apparel, now account for about half of the country's textile exports.

China is therefore grafting itself onto an industry that Tashkent is precisely seeking to upgrade.

Chinese precedent is already visible in cotton trade

The business relationship has so far been based on an asymmetrical dynamic. China is already a major market for processed Uzbek cotton. In 2024, it imported 84,900 tonnes of cotton yarn (worth 197.5 million dollars) in a single tariff category, according to World Bank Comtrade data.

The current rapprochement changes the situation. For Chinese groups, it is no longer just about buying raw materials or yarn from Tashkent. It is about relocating industrial capacity to the country, including spinning; weaving; dyeing; finishing; garment manufacturing; and direct exporting from Uzbek territory.

Uzbekistan does not magically transform a Chinese chain into a 'compliant' one

One might be tempted to see the rapprochement as a way for Chinese manufacturers to produce in Uzbekistan to evade US restrictions or new European requirements. That would be jumping to conclusions. Changing the place of manufacture is not enough to erase a product's history.

In the US, for example, the central problem remains the traceability of the supply chain and the risk of forced labour in Xinjiang. A company that simply moves the final assembly while retaining raw materials or components of problematic Chinese origin would not, by this geographical change alone, have a guarantee of access to the US market.

In Europe, too, the new forced labour regulation will ban products made with forced labour from December 14, 2027, regardless of their origin. Companies will therefore need to be able to understand their supply chain and respond to investigations by the authorities. Uzbekistan can, however, offer something decisive: a supply chain, a substantial part of which can be built outside of China, with local raw materials and local industrial capacity.

Uzbek cotton has already completed part of the regulatory journey

On the subject of forced labour, Uzbekistan has an argument that few cotton-producing countries can make with such force. After decades of systemic forced labour in the cotton fields, the country has profoundly reformed its agricultural system. The International Labour Organization (ILO) concluded in 2021 that systemic forced and child labour in the cotton harvest had been eradicated. The Cotton Campaign lifted its international boycott of Uzbek cotton in 2022.

The issue is not, however, definitively resolved. Independent monitoring of the 2024 harvest still found isolated cases of violations and stressed the need for continued surveillance. This nuance is important for Western buyers. Uzbekistan does not provide automatic certification of compliance. It does, however, offer an industrial environment whose traceability can potentially be much clearer than a chain fragmented among several Chinese suppliers.

Europe is already a target

The choice of the European Union in the Sino-Uzbek discussions is not insignificant. Since 2021, Uzbekistan has benefited from the GSP+ scheme, which allows duty-free access to the EU for more than 6,000 product categories under certain conditions. The country still exports a small share of its textile products to Europe, however, at around 7 percent of its textile exports, according to Uzbek authorities.

The EU also provisionally applied its new Enhanced Partnership and Cooperation Agreement with Uzbekistan in March 2026. The Commission points out that the country's GSP+ utilisation rate was 92.2 percent in 2024, particularly in the textile sector.

Tashkent has understood that access to the European market no longer depends solely on the ability to produce a competitive garment. It is now necessary to be able to prove how it was produced. In June, during discussions in Warsaw with the Gdynia Cotton Association, the Uzbek authorities worked specifically on the quality requirements, certification procedures, and sustainable production standards needed to boost exports of processed cotton, textiles, and clothing to Europe.

The meeting with China therefore takes place in an environment where industrial capacity and the ability to provide proof are gradually becoming two sides of the same competitive advantage.

For Beijing, a geographical diversification that comes at the right time

This strategy must also be seen in the broader context of China. The issue is not just about circumventing customs duties. Chinese manufacturers are facing increasing fragmentation of global chains. These include Sino-US tensions; import controls; environmental requirements; traceability obligations; and the desire of Western brands to reduce their dependence on certain suppliers.

In this context, Uzbekistan has several assets: cotton; a large workforce; an already established textile industry; a geographical position between China, Russia, Central Asia, and Europe; and a government that is actively seeking foreign investors to move upmarket.

The logistical aspect should not be underestimated either. Uzbekistan is landlocked, which is a weakness compared to Turkey, Vietnam, or Bangladesh. It is, however, at the heart of Central Asia's trade routes and is actively seeking to develop its infrastructure and connections with external markets.

The geography is therefore not ideal, but it is nonetheless strategic.

A deal still too vague to be called 'reshoring'

What is missing for the moment, however, is the information that would make it possible to measure the real economic scope of the announcement. How many factories? How many tonnes? How many dollars invested? Which Chinese companies? What are the timelines? What share of production is destined for the EU?

None of this was communicated in the announcement on August 24. We must therefore resist the temptation to present this rapprochement as a new major Chinese textile platform. For the moment, it is more of an industrial direction than a quantified project.

Several signals are converging, however. These include repeated discussions with Chinese companies; a planned industrial park; interest in transferring activities from China; investment in dyeing and finishing; automation; production of blended fabrics; and now a stated desire to target European markets.

From cost war to the race for proof

The decision-making of Western clients no longer rests solely on the cost of labour or raw materials. To access the US and European markets, a supply chain must now prove the origin of every fibre, the audit of every workshop, and the social compliance of every stage of manufacturing.

In this new economy of traceability, Uzbekistan offers Chinese groups much more than a simple opportunity to relocate. The country offers an industrial base backed by a local resource that is more easily documented for regulators.

If the announced investments materialise, Tashkent will be the first integrated textile platform in Central Asia, designed to preserve access to Western markets.