The article provides an overview of the current state and future development of China's flax industry. It highlights a decrease in planting area, increased yield, and consumption, significant import growth, and the industry's potential to support income growth in poverty-stricken areas. Challenges include small-scale and decentralized farming, reliance on imported raw materials for processing, a limited added value processing chain, underdeveloped brand building, lack of market supervision, and disordered competition. Suggestions are given to address these challenges through leading enterprise involvement, preferential support policies, innovative cooperative business models, and strengthening brand building protection and technology support. The article emphasizes the need for industrial upgrading and product development to tap the industry's full potential.