Understanding China’s Success:
China’s ranks #1 as the world’s the world’s largest garment exporter with 38% global market share. Bangladesh ranks #2 with a 5% market share. We all acknowledge that China dominates the global garment export market.
However, few of us understand the underlying conditions that resulted in China’s premier position.
We are told that government subsidies, notably an undervalued currency provides China’s garment exporters with a unique advantage over its competitors. There is no question that the Chinese government ensures that its currency is undervalued. However, the data clearly shows that there is no relationship between changes in the RMB and market share.
We re told that China’s advantage lies in its modern and extensive infrastructure, education, banking system, and supporting industries that is far superior to any of its competitors. Once again, there is no question; China today is far better equipped than any of its competitors. However, once again the data shows a very different picture
These advantages did not precede China’s dominance of the garment industry. In a real sense they were the result of industrial development.
China’s garment industry developed in the in the late 1970s and 1980s — immediately after the end of the Cultural Revolution. This was a time when the Chinese economy was in a state of collapse. Infrastructure was primitive. The great road More...
