China Garment Industry

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Globalization affects China Clothing Manufacturing Industry

Globalisation refers to the integration of industries, markets, economies, policy making

and cultures across the world. It describes a process by which regional and national economies,

cultures and societies have been integrated through the global network of communication,

transportation, trade and immigration (Aghion and Jeffrey 1; par 1). Knutsen explains the term

globalisation as a multidimensional process that serves to compress the world (227; par 1). The

major factors of globalisation include advanced transportation, telecommunication, infrastructure

and technology like telegraph and the internet. In the recent past, globalisation has been focusing

primarily on the worlds economic side such as foreign direct investment, trade and capital

inflows. However, the term has recently expanded to include categories like media, culture,

technology, political, socio-cultural and even biological like climate change (Aghion and Jeffrey

1; par 6).

The history of globalisation traces its way back from the early civilization period to

1600s where the creation between communities and states was done through the geographical


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transmission of ideas and social norms both at regional and local levels. Between 1600 and 1800

the concept of globalisation was introduced by historians Christopher Bayly and Hopkins

(Aghion and Jeffrey 2; par 1). During this period there were increased cultural exchanges and

trade links that characterised the immediate period of high globalisation in the modern world in

the late 19th

century. This period was marked by the move of hegemony to Western Europe,

trade arrangements like East India Company, increased conflicts between nations and the rise of

slave trade. In the 19th century, globalisation reached its modern form due to the industrial

revolution. Imperialism shaped globalisation during this period. There was standardised

household items production using economies of scale and increased population growth created

and sustained demand for these commodities (Aghion and Jeffrey 3; par 3).

In the present day globalisation is seen in the increased international trade, economic

blocks, trade agreements and trade zones, tax havens, international tourism, international sports

as well as a global financial system. All these have been made possible by globalisation; the

British service can deal with its clients in India through a call centre, or a manufacturer of

sportswear to design in Europe, make them in Asia and sell them in America. However, there is

an anti-globalisation school of thought who argues that globalisation is a way of surrendering

power to powerful corporations and keeping the poor nations poor(Aghion and Jeffrey 3; par 5).

Some of these negative effects include disposing off state owned industries as a condition to


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qualify for IMF and World Bank aid; GM seed forced to farmers in developing countries, low

paid sweatshop operators and increased domination of European and US corporate cultures

across the world (Aghion and Jeffrey 4; par 1). Whether globalisation is seen as negative,

positive or a marginal process, the precise interpretation of globalisation will continue to be a

topic of great debate among the supporters, those who oppose or the indifferent.

Globalisation and the Garment Industry

Knutsen explains economic globalisation as the restructuring response of the fordist

mode of mass production (227; par 2) which started in the late 60s and early 70s. The functional

changes in globalisation characteristics were made possible by the electronic industry. It now

became possible to decompose the process of production as well as coordinating and controlling

dispersed economic activities through the changes in technology. A difference exists between

internationalisation and globalisation where the former refers to the dispersion of economic

activities to more than one country while the latter is a more advances form of

internationalisation with functional integration between economic activities that are

internationally dispatched (Knutsen 227; par 3).

The garment industry is one of the oldest industries in the globe. This can be attributed

to the fact that before technological advancement, the industry flourished as it was mostly labour

intensive. The industry has emerged as one of the most significant export-oriented industry,


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creating job opportunities especially for low skilled workers and generating foreign exchange. Its

labour intensive process of productive is able to accommodate women into the industry who

would previously stay at home (Thee 352; par 1). The textile and garment industry was initially

being controlled by the Multi-Fibre arrangement (MFA) which was an agreement in the textile

and clothing industry. Under this system, the largest garment economies in the world that

included European Union and the US had to restrict their imports in order to protect their

domestic supply (Goto, Kaoru, and John 356; par 2). The MFA system was abolished in 1994

during the Uruguay round of the GATT negotiations. This was to be done through a ten year

transition period until December 2004. From 2005, trade in the garment and textile industry was

integrated into the normal WTO guidelines (Goto, Kaoru, and John 356; par 2). The abolition of

the MFA system provided more competition in the industry as countries could now export

further (Goto, Kaoru, and John 356; par 3).

Globalisation has made it possible for labour to be mobile across the globe. There has

been increased competition for profit making and market share among countries. Thus, labour

has been able to move to the foreign global market making it completely global. This results to

the recomposition of social relations which impacts and directly relates to different economies

(Wong 70; par 1). Globalisation has enabled the growth of garment industry through increased


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competition, development of infrastructure, communication and transportation. The national

labour movement was also introduced as a result of this (Wong 70; par 1).

In Indonesia, the garment industry emerged in the 1980s was the major export oriented

industry. (Thee 562; par 1). Competition from other developing industries such as China,

Vietnam, Bangladesh and India posed a threat to Indonesias garment industry. The garment

industry in Indonesia is relatively young; after facing some challenges in the first two years of

the Asian economic crisis. The exports have increased slightly since the abolition of the MFA

and the industry is yet to take full advantage (Thee 562; par 1). There is less hope with the

development of this industry in Indonesia but a strong case has been put forth to upgrade and

increase international competitiveness after the expiry of the MFA system. There has been a rise

in minimum wages, increased labour productivity which ensures market competitiveness of the

industry (Thee 576; par 3). Indonesias garment industry should thus shift from the lower end of

the garment market where international competition is severe to up-markets and high quality

garments. This is as a result of the strong international competition facing the industry (Thee 576;

par 4).

Sri Lankas garment industry has also experienced tremendous growth since the

abolition of the MFA. As an export led industry, the growth has been significant to the economy

(Knutsen 243; par 3). This has been made possible by the process of globalisation and


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regionalisation that has increased its competitive edge in the market. However, this competition

has made the industry face some price vulnerability (Knutsen 246; par 1). Knutsen argues that

government regulations have made it possible for freer trade through economies of scale and

expansion of the market (246; par 2). From 1956 to 1977 there were changes in the production

process as import substitution strategies were in place. Introduction of export orientation and

Export Processing Zones played a significant role in this (Knutsen 235; par 3). Networks were

also formed with the establishment of a buying office which would select the appropriate

suppliers and coordinate the buying process. Businesses could be conducted in EU and the US.

Improved literacy levels and technology advancements played a major role in the growth of the

industry and the production process was enhanced. Most of the competition for Sri Lankas

garment industry came from Mexico, China, and other Sub Saharan Countries (Knutsen 237; par

2-5, 239; par 2).

Garment Manufacturing Industry in China

China is the leading manufacturer and exporter of garments and textiles across the globe

(Goto 355; par 1). Goto, Kaoru, and John also termed it as the archetypical driver of industrial

growth both in developed countries in the past and in most newly industrializing countries more

recently.(355; par 1). It was expected that China would increase its market share at the expense

of its competitors globally as a result of the abolition of MFA which had some export restrictions.


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However, the integration of the Chinese socialist economy with the global capitalist system has

challenged the labour movements in overcoming divisions within the worldwide working class.

The entry of Chinese workers into the international labour market is perceived more of a threat

than a blessing (Wong 70; par 1). As compared to Sri Lankas and Indonesias garment

industries which are striving to excel and face competition in the market, Chinas garment

industry is faced with several challenges making it decline day by day. The garment industry in

China is the main source of income for Chinas population and approximately 50 per cent of the

population rely on it for survival (Zhang 29; par 1). The garment industry in China however

cannot be as successful as Sri Lankas and Indonesias is anticipated to be because of several

challenges.

Firstly, inadequate and weak capital is a significant challenge. The company owners or

contractors are unable to meet the industry demands because of cash flow problems, inability to

buy sufficient machinery or repair them. This leads to the contraction of work apart from may be

three of four garment firms (Zhang 29; par 4). Secondly, the seasonal nature of work makes the

workload throughout the year to be instable. This is because garment market demand is seasonal

and both manufacturers and jobbers have their own industries and thus make optimal use of their

own production capacity. Consequently, they are only able to offer what garments they are not

able to handle during the peak season to China town contractors in spring. These occasions are


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not numerous and cannot be guaranteed thus the factory owners have to protect themselves (; 29

par 5).

Another challenge is the issue of inadequate understanding of the industrial practices.

There is general lack of knowledge in the management practices of the firms which are poorly

managed despite their abilities to make profits. Consequently, the industry has faced other

challenges including shortage of skilled workers; this can be attributed to their way of life or the

fact that the physical working conditions do not appear improve peoples lives. Thus, the ones

who can handle the work would just turn away to work for industries that would offer permanent

employment and improved wages. Another problem is the fierce competition they face amongst

themselves making new companies to close down or incur losses. The factory owners underbid

each other while jobbers keep prices very low. There are also conflicts with economic recovery

policies where some feel cutting wages is the solution thus declining workers living standards

and decreasing the minimum wage set by the Economic recovery Act. This leads to increased

discontent among garment workers who thus unite to fight for their rights (Zhang 30; par 1-5)

As much as this crisis continues to affect the industry, the factory owners and workers

tend to blame the white and yellow races contradictions. However, this does not solve the

situation. Zhang suggest two solutions that could be of help (31; par 2). Firstly, contractors

should be able to unite and punish those who lower bids in the market. This will end illegal


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competition and manipulation done behind the scenes. There should be equal sharing of working

hours and work load as well as consolidating the production equipment to adapt to dynamic

situations. Discipline should be improved and garment prices increased so as to improve the

living conditions of workers. Secondly, garment workers should voluntarily aim to improve their

techniques and skills so as to improve their lives. This can be done through trainings, workshops

and transmission of knowledge amongst themselves. Means of working together and long term

positive and healthy coexistence should be enhanced.

In conclusion, the garment industry has witnessed tremendous growth especially since the

abolition of the MFA in 2004 where export restrictions were terminated. Globalisation has

played a significant massive role in this in terms of improved transportation, communication,

trade and infrastructure. This is evidenced in Sri Lanka and Indonesia. However, China has had

several challenges in the industry like inadequate capital, inadequate skills and competition

among others. This problems need to be addressed for the garment industry to be efficient and

effective. This could be done through unity in the industry and improvements in knowledge and

skills in the practices of the industry. This will lead to better management, increased productivity

and improved living standards of the Chinese.


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Works cited

Aghion, Philippe, and Jeffrey, Williamson, eds. Growth, inequality, and globalization: theory,

history, and policy. Cambridge University Press, 1998.

Goto, Kenta, Kaoru Natsuda, and John Thoburn. "Meeting the challenge of China: the

Vietnamese garment industry in the post MFA era." Global Networks11.3 (2011): 355-379.

Knutsen, Hege M. "Globalisation and the garment industry in Sri Lanka."Journal of

Contemporary Asia33.2 (2003): 225-250.

Thee, Kian Wie. "The development of labour-intensive garment manufacturing in Indonesia."

Journal of Contemporary Asia39.4 (2009): 562-578.

Wong, Monina. "Chinese workers in the garment industry in Africa: Implications of the contract

labour dispatch system on the international labour movement." TRAVAIL, capital et socit

39.1 (2006).

Zhang Hentang. The Chinese American Garment Industry. Chinese Historical Society of

America (2008): 29-31.

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