Characteristics of the Textile Industry of Two Asian Powers: China And
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Anna Antczak1, Marianna Greta2,*, Characteristics of the Textile Industry of Two Agata Kopeć1, Jacek Otto2,** Asian Powers: China and India. Prospects for their Further Development on Global Markets 1 University of Lodz, DOI: 10.5604/01.3001.0013.2895 Faculty of Economics and Sociology, Department of World Economy and European Integration, Abstract Lodz, Poland The aim of this study is to characterise the textile industry of the two global giants in this 2 field – China and India and to discuss the impact they exert on the global economy. For Lodz University of Technology, centuries the fibre and textile industry has played a key role for humanity. The study also Faculty of Management and Production Engineering, draws attention to international arrangements for trade in textiles and its liberalisation. Department of European Integration This allowed for further development of this branch of the economy and participation in the and International Marketing, global market of developing countries. Lodz, Poland * e-mail: [email protected], Key words: textile industry, fibre industry, China, India, trade liberalisation in textiles. ** e-mail: [email protected] going dynamic and long-term economic Both China and India are moving to- development in various sectors, includ- wards a presence in the global economy ing, inter alia, standard textile technolo- as well as towards modernity and com- gies. This is mainly due to the fact that petitiveness through traditional sectors. the region invests considerable financial resources in global companies, including banks. In addition, there are favorable Characteristics of the textile internal factors based on the support of market in China native governments,as follows: A bit of history n low-interest loans and tax credits; China is a country in Central and East- n support for entities starting a business; ern Asia, whose population is over 20% n training and consulting. of the world’s population [12], and the Chinese economy is currently one of the In addition, the following are contribut- fastest growing on the global market. In ing factors: 1978, economic reforms began, which Introduction n cheap workforce and better trained caused transformation and transition Clothing undoubtedly has an important staff; from a centrally planned economy to an place in human life, from historical times n the latest western technology is recon- economy termed as “a market economy to the present day. The textile industry structed. with a Chinese specificity”. The average has become an essential part of the glob- rate of economic growth in this peri- al economy, providing employment to Not caring about the ecology of the prod- od was over 10% in the GDP. In 2010, tens of millions of people. This industry uct nor compliance with working time China overtook Japan and became the is experiencing production and organisa- laws, countries of Asian region under second largest economy in the world in tional changes on a global scale, and the the leadership of China and India gener- terms of nominal GDP. In 2015, China’s deepening trade activity changes the atti- ate huge profits. They produce standard GDP amounted to USD 11.1 trillion and tude of employers and employees both in products – from an economic point of was more than twice as high as Japan’s mutual relations as well as in relation to view – at low cost and on a large scale, GDP. This dynamic development has GENERAL PROBLEMS OF THE FIBRE AND TEXTILE INDUSTRIES GENERAL PROBLEMS the importance of this industry. In the last but of increasingly better quality. This al- been made possible by creating favorable three to four decades, trade restrictions, lows them to stay in global markets. conditions for foreign investments, such i.e. price, and finally quality, have played as low labour costs and taxes as well as a significant role in shaping the develop- In this situation, it would be advisable the transfer of new technologies [15]. ment patterns of this sector [3-5]. to trace and analyse the textile industry According to the latest forecasts by the of two Asian powers: China and India Standard Chatered Bank, Chinese GDP Traditional giants in the production of as guides in the Asia-Pacific region also will overtake the USA in 2022. Current- textiles and clothing are primarily China, in the context of development perspec- ly, China’s economy amounts to 68.5% India, Pakistan and Vietnam. Although tives. This is the main goal of the study. of the American economy [11]. the industry is geographically dispersed The sub-objectives of the study comprise around the world, China is the dominant describing the specificity of both textile Traditional branches of light industry world player today, being the largest pro- powers: are fibres and textiles, which are also the ducer and exporter of textile products. n in China – through the silk industry; largest in the world, both in production Immediately behind it is India, which n in India – by emphasising the role and and export. The first textile factories ap- is undoubtedly causingthe Asia-Pacific importance of textile industry devel- peared on the Chinese coast (including Region to grow into a new center of the opment in the aspect of the so-called Shanghai) at the end of the 19th centu- global economy. This region is under- “complete supply chain”. ry. In 1872, the first weaving factory was Antczak A, Greta M, Kopeć A, Otto J. Characteristics of the Textile Industry of Two Asian Powers: China and India. Prospects for their Further Development on Global Markets. 9 FIBRES & TEXTILES in Eastern Europe 2019; 27, 5(137): 9-14. DOI: 10.5604/01.3001.0013.2895 In the beginning, Chinese products were associated with very low quality, and their export caused numerous conflicts and accusations of illegal practices and anti-dumping proceedings. Currently, while maintaining low prices, China has seen improved quality and become a global leader in the textile sector5. In 2004, Chinese textile exports to the European Union amounted to almost EUR 2 billion. Clothing worth almost 13 billion euros was also exported. The constant trend of export growth is about 10% per year 6. Key centers of the Chinese textile industry are focussed on the Yangtze estuary (Shanghai, Zhuzhou, Hongzhou) and the lower reaches of Huang He (Beijing, Tianjin, Qingdao). In north-west China, the main textile centers are located in the province of Xinjiang - Urumqi, Kashgar and Hotan7. Figure 1 presents the distribution of these centers. Fig. 1. Main centers of the textile industry in China the lower reaches of Huang He (Beijing, Tianjin, Qingdao). In north-west China, the main textile centers are located in the province of Xinjiang – Urumqi, Kashgar and Hotan [12]. Figure 1 presents the distribution of these centers. Currently, the cotton industry, which is the core of the textile industry, ac- counts for about 95% of Chinese tex- tile production. China, alongside India, is one of the largest producers of this production. In Figure 2, the main areas of world cotton production are marked, which, as is raw material, and they together account evident, are in the region of Southeast Asia. for over half of the world’s cotton pro- duction. In Figure 2, the main areas of world cotton production are marked, which, as is evident, are in the region Source: own elaboration based on Google Maps, 20.04.2018. Figure 1. Main centers of the textile industry in China. Source: own elaboration based on of Southeast Asia. Google Maps, 20.04.2018. Fig. 2. Main areas of world cotton production Currently, the cotton industry, which is the core of the textile industry, accounts for Over the years, China has been first in cotton production, but it has recently about 95% of Chinese textile production. China, alongside India, is one of the largest been gently overtaken by India. The ma- producers of this raw material, and they together account for over half of the world's cotton jority of cotton production in these countries is not intended for export, but – interestingly – for internal use. China’s 5 http://www.psz.pl/124-polityka/aleksander-kobylka-spor-o-tekstylia-unia-europejska-chiny-czy-to-zlo- demand for cotton is even greater than konieczne, 20.03.2018 r. domestic production, which also means 6 http://trade.ec.europa.eu/doclib/docs/2005/july/tradoc_124107.pdf, 20.04.2018 r. 7 https://encyklopedia.pwn.pl/haslo/Chiny-Gospodarka;4573913.html, 20.04.2018 r. that China is also the largest cotton im- porter in the world, mainly due to the in- ternal policy pursued. In China, this raw material is treated as a component of re- serves. As a result, Chinese cotton stocks account for 60% of the total global stocks of this raw material. The cotton harvest, sourceFigure: http://bossafx.pl/index.jsp?layout=fx_2a&page=0&news_cat_id=3799&news_id=46279, 2. Main areas of world cotton production. Source: [9]. 22.04.2018 r. like every agricultural commodity, de- pends on weather conditions; however, Over the years, China has been first in cotton production, but it has recently been in recent years the weather has had less established, and in the early eighties of the ever-improving technology that made and less influence on changes in cotton gently overtaken by India. The majority of cotton production in these countries is not intended the last century, mechanised factories China products the cheapest in the world. prices. China’s policy towards cotton forappeared. export, but The - interestingly interwar period - for sawinternal inten use.- China'sIt was demand calculated for cottonthat exports is even of greater Chinese than reserves, which in recent years have sig- nificantly increased, reaching a record domesticsive development production, ofwhich the alsotextile means industry that Chinatextiles is also are the growing largest atcotton a rate importer of 20-30% in the in China, with a simultaneous decline per year.