Ever since the open policy adopted in China, textile and clothing industry has been playing an important role in the economic development and foreign trade. The achievements prove the competitive advantages possessed by China textile and clothing industry, while we can attribute the advantages to factors endowments as abundant raw material and human labor. These advantages can also be acquired by other countries with similar situations, such as India, Pakistan, Mexico and Turkey. With the abolishment of quota system in 2005, these countries have faced more favorable trade policies than China. China will face a more competitive market than before. Author of this article hopes to understand the international position, competitiveness, existing problems and strategies as industry innovation and upgrade for China textile and clothing industry through analysis.