CHAPTER 1
INTRODUCTION
The fashion industries have become one of the fastest growing industries all over the world. With the purpose of boosting one’s physical image and even their self-confidence, there are many people who attempts to provide new fashion trends to meet and satisfy the needs of their target market. Various scholars have provided some definition of fashion. According to (1995) fashion involves changes, defined as a succession of short term trends. The industry has a vested interest in developing new products for the customer at the expense of existing items: this process is known as planned obsolescence.
On one hand, (2003) stated that fashion is an aesthetic expression that aims to communicate notions, subtleties, and therefore, as soon as an aesthetic order comes to be generally perceived as a code, then works of art tend to move beyond this code while exploring its possible mutations and extensions. Furthermore, fashion is believed to be a cyclical reflection of social, cultural, and environmental characteristics that are unique to a certain point of time in a particular geographical setting, in addition to playing a crucial role in complementing one’s self-image.
According to (1994) clothing serves as a heat-control function as the extension of one’s skin as well as a way of portraying the self to the society and is equipped to provide warmth, safety and protection. As the boundaries between clothing and shelter are distinguished, so too are the varying disciplines of fashion, architecture, and art in which fashion can shape and rearrange the patterns of human association and community (2002). Designers like Hussein Chalayan and Yeohlee Teng have been confronted with their lean towards architecture in creating their garments collection as super.
With this trending, some considers garment’s or fashion’s life cycle as relatively short. Accordingly, all garments are, at any one time fashionable. Most people change their clothes because they are out of fashion rather than functionally worn out (2006).
It is mentioned that there are different forms of fashion: high and mass fashions. High fashion is limited to people who want to be the first to adopt the very newest style and can afford the astronomical prices (19870). Mass fashions are styles that are accepted and worn by large number of people and produced and sold in large quantity on moderate prices (1987). There is one country that is emerging now as one of the fastest growing economy in terms of its fashion industries, i.e. China.
When people talk about the Chinese market, high population and low disposable income are the basic impression. However, a strong buying power is contained in this large population. (1997) point out that in 1992, there were 11 developing countries which imported in excess of 0 million worth of clothing from the developed countries.
China has been one of the world’s fastest growing economies in the past 20 years (2003). And also, China has been the second largest clothing market in Asia (the largest clothing marketing is Japan). The production, consumption and exportation of clothing are increasing every year. However, when looks at the structure of global economy in 1996, the United States GDP per capita is ,020 (1998,). The EU, with a GDP of .4 trillion and a population of 372 million, it is the world’s richest market (1998). In Japan, the GDP per capita was ,726 (1998) compared to these developed countries, China still has a long way to go.
The fashion industries in China started to boom with its men’s fashion or clothes. On one hand, the trend in women’s fashion went in the path of an almost intensive feminine look and currently more women wear skirts unlike before when they wear masculine outfit. With these changes, the needs and demands of clients for more fashionable apparel has development relatively in recent years. In addition, through its opening in the international fashion trends, there are more international fashion industries that try to enter the China more intensively.
Primarily, the main goal of this dissertation is to investigate the relationship of Chinese fashion or apparel industry and international fashion or apparel. Specifically, this also attempts to identify the advantages and shortcomings of these industries in meeting the needs of the target market. Also the goal of this paper is to know how these apparel markets influence each other and predicting the apparel market’s future.
Background of the Study
China has done remarkably well since the beginning of the economic reform movement in 1978 (1996). Between 1979 and 1995, China’s GDP grew at an average annual rate of 9.5 percent. China’s exports grew even faster and China now ranks among the world’s top 10 exporting economies. The government, in implementing the Coastal Economic Strategy, established four special economic zones in the coastal provinces of Guangdong and Fujian and 14 other coastal cities were opened in 1984 to attract trade and foreign direct investment. These economic zones and cities enjoyed relatively better tax treatments and preferential resource allocations (1998).
Moreover, China’s entry into the WTO will make China’s door even more open. Both foreign investment and foreign trade are expected to increase (2000). Foreign firms will begin to penetrate China’s financial and telecommunication sectors. Trade will increase in both directions and Chinese tariffs will be lowered and Chinese goods will have better access to world markets open to members of the WTO. Using foreign competition to stimulate the domestic economy is a major objective in seeking to join WTO, as explicitly stated by
The immediate issues faced by the early investors were cultural differences, trade barriers and government restrictions. Coca cola, Philips, Kentucky Fried Chicken, Nokia, Microsoft, and Johnson and Johnson were some of the companies who succeeded in taming the “dragon”. There is social behavior in China that in itself is not bad, but it does affect the country’s globalization process. The predominant thought in Chinese Marketing System is that in order to do business successfully in China, the business must be organized, implemented, and operated in China. A business have no hope of much success if operated through long distance management, controlled by overseas main branch, or implemented by a foreign team that excludes participation by the locals. Aside from the companies mentioned above, the boom of Chinese fashion industry has also attracted many international fashion industries to enter Chinese market.
Among the largest apparel manufacturers in international fashion industries that operates clothing fashion outlets in China includes Lai Sun Garments (under the brand Crocodile), Trinity Textiles, Smart Shirts, Giordano, Tal Apparel, Fang Brothers Knitting (with brand names: Jessica, Episode, Colour 18), Unimix (with brand names: Gieves & Hawkes, Lee Cooper Jeans), Peninsula Knitters, Esquel Enterprises, Yangtzekiang Garments (with brands: Michel Rene, Daniel Hechter), Crystal Knitters, Goldlion and Winner Co. Garments which offer retail apparel products internationally. Other recognized apparel companies that manufacture overseas through sub-contractors include Esprit, Bossini, G2000/U2 and Shanghai Tang. Esprit Bossini and G2000/U2 are the local retailers and franchisers which are characterized with relatively stronger local market share compared with the foreign brands in the same price range like Benetton and Mango ( 2004).
With the appeal of Chinese fashion industry and fashion market among the international fashion industries, it is necessary to determine the relationship of these two industries. Hence, this research study is conducted.
Research Aims and Objectives
As mentioned above, the main objective of this study is to determine the relationship of Chinese apparel or fashion industry with international fashion industry. Specifically, this dissertation aims on achieving the following objectives:
1. To know the influences between international and Chinese apparel industries.
2. Identify the factors that enable Chinese apparel industries to approach international apparel industries.
3. To determine the differences between international and Chinese apparel industries.
4. To know the advantages and shortcoming of Chinese apparel industries compared to International apparel industries.
5. Know whether Chinese apparel industries have a significant relation with International apparel industries.
Research Questions
This researcher finds the necessity for a study that specifically tackles influences of Chinese apparel industries and International apparel industries with each other. Therefore this study attempts to answer the primary query:
1. What are the advantages and shortcomings of Chinese apparel industries as compared with International apparel industries?
2. How Chinese Apparel industries affect International apparel industries?
3. How do International apparel industries affect Chinese Apparel industries?
4. Is there a significant relationship between Chinese and international Apparel industries?
Scope and Limitation
This research study will be qualitative in nature. Thus the framework of this study will be based on the Input-Process-Output Model; a process is viewed as a series of boxes (processing elements) connected by inputs and outputs. Information or material objects flow through a series of tasks or activities based on a set of rules or decision points. Flow Charts and process diagrams are often used to present such process. Basically, what goes in is the input (what causes the change in the process) and output (the result). See Figure 1.1 (Basic IPO Model).
Figure 1.1
Input – Process – Output Model
The IPO model will provide the general structure and guide for the direction of the study. Substituting the variables of this study on the IPO model, the researcher came up with the following:
Figure 1.2
Conceptual Framework
INPUT PROCESS OUTPUT
For this research, the study will focus on analysing the relationship and influences of Chinese and international apparel industry, Chinese apparel industries advantages and shortcomings compared with international apparel industries. For this study, the researcher will only have respondents who have deep background regarding fashion industry so as to ensure that only pertinent data will be gathered.
Significance of the study
This study will be significant in management/business firms, particularly for the fashion industries in a sense that it will broaden their knowledge about the current condition of both Chinese and international apparel industries and will help them determine the influences of these industries with each other to emerge as competitive industries in the fashion market. Furthermore, it will contribute to business research. This can be used as a future reference for future research that will focus on having new models to be followed by fashion industries all over the world. Moreover, this study provides significant role to the society since it depicts the future of a certain business with regards to present condition and position of fashion industries. Moreover, research materials are useful in persuading people to adopt something new like the business mode to be followed in fashion industry.
Methodology of the Study
The study shall be using the descriptive research method. It uses observation. In this method, it is possible that the study would be cheap and quick. It could also suggest unanticipated hypotheses. Nonetheless, it would be very hard to rule out alternative explanations and especially infer causations. This descriptive type of research will utilize observations in the study. To illustrate the descriptive type of research, (1994) will guide the researcher when he stated: Descriptive method of research is to gather information about the present existing condition. The purpose of employing this method is to describe the nature of a situation, as it exists at the time of the study and to explore the cause/s of particular phenomena. The researcher opted to use this kind of research considering the desire of the researcher to obtain first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study.
The research described in this document is based quantitative and qualitative research methods. This permits a flexible and iterative approach. During data gathering the choice and design of methods are constantly modified, based on ongoing analysis. This allows investigation of important new issues and questions as they arise, and allows the investigators to drop unproductive areas of research from the original research plan.
The primary source of data will come from published articles from social science journals, theses, and related studies on international and Chinese apparel industries and the textile industry. For this research design, the researcher will gather data, collate published studies from different local and foreign universities and articles from management and industrial journals; and make a content analysis of the collected documentary and verbal material. Afterwards, the researcher will summarize all the information, make a conclusion based on the objectives, and provide insightful recommendations on the dealing with the fashion industries future trends.
Limitations of the Study
This research shall attempt to determine the influences of Chinese and international apparel industries. As this study is conducted only within the fashion industries, its application to other companies and institutions is still subject to further study. So the possible results and suggested recommendations fashion industries in this dissertation might not apply to other institutions. By conducting a random sampling survey, the researcher shall try to determine the relationship with Chinese and international apparel industries.
This paper shall cover only the managers of Chinese and international apparel industries as sources of data. Analysis shall be limited on the outcome of the survey that will be conducted. Moreover, the literature covering the area fashion industries, particularly the overview of the state of Chinese and International apparel industries will be gathered and analysed.
Chapter Outline
This study consists of four chapters. The first chapter is the introductory chapter which presents the overview of the nature of the problem to be discussed in the dissertation. This chapter also covers the aim and scope of the study, as well as applied methodology and provides general ideas about the way that the study is structured.
The second chapter provides a literature review which basically focuses on the current situation of Chinese apparel industries, international apparel industries and other relevant context. It first presents the current state of fashion e industry. Then it goes on to provide literature about the influences of international and Chinese apparel industries.
In the third chapter, the writer provides analysis of the result of the findings based on the conducted survey. Finally, the fourth chapter of the study presents some recommendation and guidelines to the influences of Chinese and international apparel industries.
Chapter 2
Review of Relevant Literature
The choice of literature for this study is limited only to those that have a vital contribution about the current condition of the international and Chinese apparel industry and how they affect each other. This chapter reviews articles from books and journals on apparel industries. Specifically, this chapter discusses the nature of the apparel industry both in China and in international market, their performance, and some issues about the topic.
Chinese Economy and Chinese Apparel Industry
China has been known to have the largest apparel industry al over the world. In addition, China is also recognised as the largest exporter of garments to different countries of the world. The entire apparel industry of China which include clothing and fashions for men, women and even children has rapidly grow over the last 2 decades. The main reasons for the growth of China’s apparel industry are because of the economic reform of the Chinese government and because of the prevailing low labour costs in the country. Furthermore, the government has also enabled the domestic manufacturers by initiating restructuring and consolidation programmes. The foreign investments have also helped in sustaining the competitive advantage of China’s apparel industry (1995).
The introduction of reforms in China started in 1978. From this time, a number of economic reforms have been launched by its government. One of the important reforms introduced by the government was on the agricultural sector; through this, farmers were given incentives for price and ownership, which allowed them to place a part of their crops on sale to the free market. In order to improve international trade, high technology importation and foreign investment, the Chinese government also established special economic zones.
Other reforms implemented in the country were directed towards the decentralization of economic policymaking, particularly on trade. Local and provincial administrations were also given the authority to handle the economic regulation of different enterprises. These enterprises on the other hand, were also transformed through these reforms as they were enabled to compete and operate based on the principles of the free market. Cities and coastal designs were also chosen as development areas, allowing them to offer trade incentives and tax. This in turn, helped in attracting foreign investors. The price controls implemented by the state was eliminated slowly through these reforms.
In an article by the (1996), the economic reforms of the China and its three important phases had been discussed. The first phase (1978-1984) was focused on the development and implementation of agricultural reforms. One aspect of the first phase reforms was the introduction of the household responsibility system that allows land leasing to farmers. Prices for procuring key crops had also been increased and the two-track price system has also been introduced. In coastal regions, open economic zones were developed not only for the purpose of attracting international investment but also to create laboratories that will be useful for more aggressive market-oriented reforms.
From, 1984 to 1991, reforms introduced in China had been broadened. This served as the second phase of the country’s economic reform. During this time, the reforms were shifted from rural areas to industrial enterprises. One significant development in this phase was the provision of greater autonomy among state enterprises, particularly in terms of production and making employment decisions. The two-track system was also expanded to industrial prices during this stage. Urban collective, a type of an enterprise, has also gained more value through industrial economic reforms. As economic zones were expanded and foreign trade began to raise, the trade and exchange system has become more liberal (1996).
From 1992 up to the present, the third phase of the Chinese economic reforms is focused on the solid establishment of these reforms. One of the plans to achieve this objective is to develop a socialist market economy. With this economic system, the market forces played the important role of resource allocation. Among the expected outcomes from a socialist market economy include the increased strength of macroeconomic control among institutions as well as increased market orientation of the economy. These can be achieved as the transition of the economy entailed several reforms on the financial, trade and banking sectors. This transition of the economic system also allowed the conversion of state enterprises into contemporary corporations headed by independent business leaders (1996).
According to (2002), the implementation of reforms to reduce state owned enterprises was done due to the government’s intention to establish stronger firms that can serve as the foundation of the national economy as well as to make them more competent against foreign firms. Most importantly, the development of modern enterprises can help alleviate the problem on China on workforce surplus and unemployment.
After the accession of China to the World Trade Organisation (WTO) in the later part of the 2001, the chances of Chinese industries have become even more lucrative for the nation to enhance its exports. Although entering the international market also means taking the challenge of fierce competition and putting the domestic market in a challenging because of the lowered trade of barriers for foreign industries.
Over the last decades the apparel industry has served as a leading sector as China has go through and experience domestic commercialization and deepened its connection and incorporation into the world economy, a role which is similar to that experienced of Japan and elsewhere in East Asia ( 1998) Indeed, scholars, economists, and some political scientists have long give attention on the vital role of textile manufacturing in the process of economic growth (1979).
During the period of Mao, textile and apparel industry in China, not only met the basic clothing demands of the China’s predominantly poor but large population, but it also served as an essential source of capital for projects in some industrial sectors. Indeed, the apparel and textile manufacturing has borne an enormous tax burden in the half of the century since the establishment of People’s Republic of China (PRC) (1998)
Most important to this study, China has emerged as one of the leading international traders of textile products. According to official statistics compiled by the WTO, China was the world’s largest exporter of both textiles and clothing in 1999, accounting for 9% and 16% of the international market, respectively. (Overall, China leads the world industry with a total market share of 13%) While China is not a big importer of clothing, it is the world’s second largest importer of textiles (many of which are re-exported after processing), taking in 7% of total international sales in 1999 ( 2000). By any measure, therefore, China has become a major player in the world industry. Indeed, textile trade is critical not just to the Chinese industry itself (e.g., exports account for slightly more than one-half of China’s production of textiles and clothing by value), but to the entire Chinese economy, as well (I2001). While the share of textile and clothing products in China’s total exports had declined to 22% by 1999 from a high of 30% in 1994, it was still close to the 23 percent share recorded in 1980. (Indeed, textile and clothing exports still account for nearly one-half of China’s total light industrial exports). This record is especially remarkable given the quantity-based restrictions placed on China under the MFA. Indeed, it suggests how successful the industry has been in moving upmarket. While the relative share of textile and clothing products in China’s total exports has declined modestly over time, the absolute value of these sales has continued to rise steadily, reaching U. S. billion in 1999 (1999). In fact, only in 1996 did the textile sector finally relinquish its leading position in China’s export profile to the machinery and electronics sector. Rather amazingly, therefore, nearly U. S. out of every U. S. of Chinese exports is still earned from the sale of textiles and clothing, this despite the rapid growth of Chinese exports across an increasing number of industrial sectors.
Any history of the textile and apparel industry in the PRC must begin with the establishment of MTI in 1949 (2002). One of the original four industrial ministries set up under the supervision of the State Council, MTI was charged with consolidating an industry whose resources were not only fragmented but also inefficiently deployed. While the regional concentration in coastal areas like Shanghai, Qingdao, and Tianjin made sense when Chinese producers relied upon foreign supplies for their raw materials, it required significant change after 1949 when the new government decided to rely on cotton grown in China’s inland provinces. MTI’s mandate to exert central control over the industry notwithstanding, much of the industry’s history from the mid-1950s onward was one of partial decentralization. In the Great Leap Forward, for instance, direct supervision over most textile enterprises was transferred from MTI to authorities at the provincial and city level ( 1992).
It is difficult to make generalizations about China’s textile and apparel industry given its enormous size and scope. Even in the pre-reform era, during which greater uniformity in the economic system might have been expected, tremendous diversity existed. While serious problems remain with the quality of its textile exports, China has made substantial progress in several key areas: purity of fibber content; better dyeing techniques; improved packaging; quicker production schedules; more reliable delivery; and greater uniformity in color, shrinkage, and measurement. Informant including several foreign buyers who were otherwise quite critical of the Chinese industry repeatedly emphasized that high quality production was possible in China by the late 1980s and early 1990s, in no small measure due to incentives provided under the MFA. Specifically, many scholars stressed that country reputations, as prevalent as they are, are less important to businesspeople interested in stable, long-term relationships than factory or company reputations. For an enterprise in China to trade up in the world market, it needs to become the source of choice for foreign buyers looking to place orders for higher-end goods. In this sense, reputations are earned and lost by performance (1992).
In China, the domestic channels for apparel are characterized using three dominant patterns as shown in the schematic diagram below (Figure 1). Approximately 70-80% of the garments in the local market are distributed in the local market through Pattern A (Almanac of China’s Textile Industry, 1994) through product supply chain and interchanges between the textile manufacturers, apparel manufacturers and the retailer to the consumers. The large cities of China normally employ Pattern A while Pattern B is dominant in small and middle-sized cities and towns. In pattern B, the distribution channels or retail outlets include the specialty stores, the department stores, and the street fashion peddlers. Pattern C is seldom used in the local market to distribute apparel products to the consumers (retail chains and direct mails) ( 1999).
Figure 1.Distribution Patterns of China’s Apparel Products
Some of the ways that companies acquired cost advantages are by improving process efficiencies, gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions, or avoiding some costs altogether. If competing firms are unable to lower their costs by a similar amount, the firm will be able to sustain a competitive advantage based on cost leadership.
International Apparel Industry
The apparel industry is considered as a labour-intensive, low wage firm and a dynamic, innovative industry which depends on which market segments an industry focuses upon. As mentioned above the international apparel industry can be divided into two segments or types: high quality fashion and the mass production or the standard fashion.
In the high-quality fashion market, the apparel industry which is commonly located in developed countries that has the capacity to have modern-technology and can afford to have a well-paid employees and designers with a high level of flexibility. The apparel industries in this type of market has a competitive advantage over other industries which is relevant to the ability of the industry to produce designs that meet the needs and preferences or even exceed the expectations of their target market aside from the its cost and effectiveness (2004).
In the international level, it is noted that the Emilia-Romagna district located within the Third Italy is known to be the most prominent and progressive textile and apparel industry all over the world, while Italy is noted to be the second largest exporter of apparel products and clothing when intra-EU is considered ( 2001).
The other major market segment of apparel industries is mass production of lower-quality and standard products including uniforms, white underwear, t-shirts and others. The makers of these products are largely found in some developing regions.
Many have pointed to the creation of a textile and apparel industry as the cornerstone of this “trade not aid” reorientation (1999). Businesses are said to be eyeing Asia as a new source for low-cost textile and apparel imports for global markets (1999). Policymakers see this sector as a quick way to generate employment and stimulate basic manufacturing skills that can be used for other industries. Development economists are no doubt attracted to the notion that production and employment in textiles and apparel can stimulate other improvements in basic infrastructure and other social needs such as education and health.
The increasing complexity of the apparel industry makes it difficult to derive a precise figure for overall world apparel trade. Complex production-sharing arrangements and the proliferation of regional, and sometimes overlapping, trading blocs lead to double counting that muddles the import-export picture. At the same time, developing countries, particularly those in Asia and those in close proximity to major markets, have secured the dominant share of the world market for apparel exports. Asian countries account for more than half of all apparel exports, or about billion in 1996 (1999).
Hong Kong, China, Taiwan, and Korea (1990), which have often been considered the “Big Four,” have seen their export share erode as production in South East Asian countries, such as Malaysia, Indonesia, and the Philippines, has skyrocketed. In 1996, the non-Big Four Asian countries accounted for about twenty-five percent of worldwide exports–up from a little over twenty percent ten years earlier.
Similarly, production-sharing arrangements, strengthened through regional trading initiatives such as the North American Free Trade Agreement (NAFTA), have increased the stake of many other developing countries. Between 1987 and 1996, these countries increased their share of worldwide apparel trade by more than six percentage points. In fact, the rise of these production-sharing arrangements reinforces the notion that the apparel trade is splitting into three large trading blocs: the United States, which is served by Mexico and the Caribbean Basin; Western Europe, which is served by Eastern Europe and North Africa; and Japan, which is served by Southeast Asia.
Much of the worldwide apparel and textile trade is managed through a complex system of quotas known as the Multilateral Fiber Arrangement (MFA). Under this system, importing nations have imposed quotas on imports to protect domestic textile and apparel interests. Created more than thirty-five years ago, the MFA has played an integral role in shaping international investment plans in apparel production. As exporting countries have filled their quotas for a particular market, apparel importers have had to develop new sources in countries not yet under quota.
As part of the Agreement on Textiles and Clothing (ATC) that was negotiated under the Uruguay Round of the GATT, major exporting and consuming nations agreed to a ten year phase out of the quota system and the liberalization of apparel markets in a number of developing countries (2004). The phase out is being implemented in four phases, the second of which took effect on January 1, 1998. However, many apparel products, including some of the most import-sensitive articles, will still be under full quota until all the quotas expire on January 1, 2005.
The MFA (1996) phase-out is expected to have a major impact on international apparel trade flows, making it much easier for large exporters to reach their target markets. This will come at the expense of countries that are not yet under quota or who benefit from relative quota-free access, such as that afforded the Caribbean Basin countries by the United States. The overall volume of trade should also increase dramatically.
The elimination of quotas, however, will not eliminate all barriers to the apparel trade. Many countries still maintain high tariffs on textile and apparel products that are not expected to disappear anytime soon. A number of countries, including the United States, will still maintain duty reduction programs to favour one region over another. Moreover, restrictive rules of origin, the rules that govern whether a good qualifies to be imported or labelled in a particular manner, will still operate (1990).
The apparel industry will still face a number of regulatory challenges that could distort investment patterns and trade flows. The proliferation of customs practices and labelling schemes will still lead to some market fragmentation even as harmonization in some areas leads to market consolidation (2003). NAFTA countries, for example, are putting in place a uniform care labelling system based on symbols. Companies responding to this development should find it easier to manufacture and label products uniformly for all three markets. In contrast, the European Union continues to move forward with a controversial plan to require metric-only labelling on all products.
Since the Multi-Fiber Arrangement in 1974, the textile and apparel industry has received more comprehensive and persistent protection than any other industrial sector ( 1998; 1990). Restrictions of the supply of imports tend to raise their prices, and as the prices of imports rise, the prices of competing domestic goods tend to rise in response (1990; 1996). It is well known that such price increases cause losses in consumer welfare (1998). Past studies have assessed aggregate consumer welfare loss due to trade restrictions in the textile industry. Clearly, trade restrictions reduce the efficiency of the economy. As (1998, 441) and others have pointed out, however, equity may also be an important goal in assessing policies.
The textile and apparel industry has long received protection from foreign competition (1990; 1994). From the late 1950s onward, tariffs were supplemented by quantitative restrictions known as voluntary export restraints (VERs). This agreement, known as the Multi-Fiber Arrangement (MFA), governed most imports of textiles and apparel during 1974-1994. Under the MFA, bilateral agreements established textile and apparel quotas without compensation, which is contrary to the general prohibition against their use under the General Agreement on Tariffs and Trade (GATT). As a result, a series of discriminatory bilateral quotas restricted exports by most developing countries ( 1990).
In the past few decades, textile and apparel companies have been struggling to reinvent themselves (1997). By investing in new technologies, merging to reduce costs, employing offshore plants to perform certain operations, and developing new products and services, they have been attempting to find a niche in the international market. According to some measures, they have been successful, as production has remained stable and many companies have been profitable.
Still, as many firms adapt to the changes, the textile and apparel industries will remain an important provider of jobs, with employment projected to be more than 1.3 million in the year 2005 (1995). Textile and apparel imports have grown substantially in recent years, even under the Multifiber Arrangement (MFA), which was instituted to protect producers.
Primarily as a result of new trade agreements, a more open global economy is likely to play an even larger role in the two industries over the 1994-2005 periods. On December 31, 1994, the MFA expired, and textile and apparel trade in the United States entered into a 10-year transition period, after which it will be fully governed by the World Trade Organization (WTO), a body created by the Uruguay Round (WTO, 1996). At the end of this period, the quotas of the MFA will be eliminated and tariffs will be significantly reduced. In addition, NAFTA will be fully phased-in by 2004, further eliminating barriers to trade between the United States, Mexico, and Canada. The implementation of these agreements is expected to raise the trade deficit in textiles and apparel and contribute to employment losses in the industries (1996).
As textile and apparel producers in South Asia are increasingly exposed to competitors in the global economy, they will need to specialize in textile and apparel products in which they have a competitive advantage. The textile industry, for example, has developed a number of advanced manmade textiles and applied them in uses ranging from building construction to tire reinforcement ( 1996).
Textile and apparel producers will continue to look to the international market to sell their goods. Trade liberalization will allow South Asian textile producers easier access to foreign markets to supply overseas apparel factories. It also will give retail consumers better access to textiles and apparel produced around the world. While increased international trade presents significant market potential to textile producers, it offers only limited opportunities to most apparel producers. Due to the labor-intensive nature of apparel production and other factors, foreign producers continue to have cost advantages. The relatively high cost of transporting apparel is a factor as well. Nevertheless, trade liberalization also will South Asian producers to take advantage of name recognition and other advantages to increase their share in some international markets that were previously less open to them.
Apparel Industry Production Trend
This part of the literature review discusses the impact of recent developments on the major textile and apparel producing and consuming nations as part of the notion of the phasing-out of quotas by 2005. In terms of US textile output, the production was down by January-August 2002 of 2.6% while the apparel production has declined by 7.4%. In addition, US exports also fell, in spite of a weaker dollar. This is because of the weak demand in the US market that forced down clothing prices to a 4-year low. However, the US domestic clothing sales slowly picked up in the mid-2003. During this time, the textile exports rose by .3% increased having 2.9% in the first to second quarter of 2003 but clothing fell 6.2%. The imports of US surged, particularly from Vietnam and China. By August 2003, the output of the textile industry was down to 9.8% and the clothing 13.3%. During this period, the US imports surged, specifically from China as quotas has been liberalised. The Softer demand and Chinese competition has also affect exports from Mexico (2004). In Argentina, the textile and apparel industry is suffering in spite the depreciation of the peso. In European Union, the textile output decrease in 2001, in spite of a big rise in the surplus trade. On one hand, the clothing held up better as the exporters generated gains in Romania, Russia, and Hong Kong. Imports from the Eastern Europe flowed in advance of the enlargement of EU. Though, the membership of EU is creating concern for East European industries. The EU’s trade surplus has been falling as Asian suppliers are able to make inroads (2004). In Asia, the industry of Japan also shrunk at an even faster stage although it’s important has remained eased. The exports of China have been enhanced by WTO accession to China and output growth is seen to be strong. However, the average prices are still falling in the region. In Taiwan, HK and South Korea, the domestic demand as well as exports remained weak and industries are moving to low cost nations (2004)
Chapter 3
RESEARCH METHODOLOGY
This study was conducted in order to assess the relationship international and Chinese apparel industry. The focus of the assessment was on the effects of each industry to each other and on the performance of the Chinese apparel industry. In order to gather the necessary data, the researcher utilized the descriptive method, using both qualitative and quantitative approaches. A total of 50 respondents were randomly selected as participants. The survey questionnaire method was the research instrument used for the data-gathering.
The managers who have been chosen in this study accomplished a survey questionnaire to evaluate the whether the Chinese apparel industry affects or influence international apparel industry or vice versa. The results of the survey were then processed by computing the weighted mean of each survey item. The computed values were compared to the Likert scale for data interpretation. Relevant literatures were also used to support the gathered findings.
The credibility of findings and conclusions extensively depend on the quality of the research design, data collection, data management, and data analysis. This chapter will be dedicated to the description of the methods and procedures done in order to obtain the data, how they will be analysed, interpreted, and how the conclusion will be met. This section is to justify the means in which the study was obtained and will help in giving it purpose and strength as it will then be truthful and analytical. All these will help in the processing of the data and the formulation of conclusions.
Specifically, this research will cover the following: the research design and method, the respondents or subjects to be studied (which will include the sampling method), the data collection instrument, and the data analysis. These will be presented below.
Research Design
This study was conducted in order to assess the relationship of Chinese apparel industry and international apparel industry. The descriptive method of research was utilized. The purpose of employing the descriptive method is to describe the nature of a condition, as it takes place during the time of the study and to explore the cause or causes of a particular condition. The researcher opted to use this kind of research considering the desire to acquire first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study. According to Creswell (1994), the descriptive method of research is to gather information about the present existing condition.
Two types of data were used: the primary and the secondary data. The primary data were derived from the answers respondents gave in the self-administered questionnaire prepared by the researcher. In addition, the information obtained from the interview also provided primary research data that supported the study. The secondary data on the other hand, were derived from the findings stated in published documents and literatures related to the research problem. These were based from the recent literatures related to international apparel industry and Chinese apparel industry.
In terms of approach, the study employed both qualitative and quantitative approaches. The quantitative approach focused on obtaining numerical findings was used with the survey method. The secondary data on the other hand, made up the qualitative approach of the study as this focused on personal accounts, observations, description and individual insights of the customers. This study employed the combined approach so as to overcome the limitations of both approaches.
Participants
The study will have managers of both international and Chinese apparel industry. All of these participants were selected through random sampling. This sampling method is conducted where each member of a population has an equal opportunity to become part of the sample. As all members of the population have an equal chance of becoming a research participant, this is said to be the most efficient sampling procedure. In order to conduct this sampling strategy, the researcher defined the population first, listed down all the members of the population, and then selected members to make the sample. For this purpose, a self-administered survey questionnaire in Likert format was given to the respondents to answer.
The managers assessed both apparel industries. No inclusion criteria were applied for the individual applicants; hence, all were made part of the population. However, due to time and budget constraints, the researcher opted for a smaller sample size.
Research Instruments
For this study, two research instruments were used to evaluate the relationship of the two contexts. These research instruments included the survey questionnaire methods. A self-administered questionnaire was distributed to the selected managers. The questionnaire given to the managers aimed to determine the relationship of apparel industries (international and Chinese) In addition, this also aims to evaluate the effects of these two industries with each other.
The questionnaire was structured in such a way that respondents will be able to answer it easily. Thus, the set of questionnaire was structured using the Likert format with a five-point response scale. A Likert Scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement to a statement. In this type of questionnaire, the respondents were given five response choices. These options served as the quantification of the participants’ agreement or disagreement on each question item. Below are the designated quantifications used in the questionnaire:
5
Strongly Agree
4
Agree
3
Uncertain
2
Disagree
1
Strongly Disagree
Data Analysis and Presentation
The study utilised first hand data which comes from the chosen respondents who answered the survey-questionnaires given to them. First hand data are those that come from the respondents who have been surveyed prior to the research. The study also utilized secondary data. Secondary data include raw data and published summaries, as well as both quantitative and qualitative data. (2003) deduced that secondary data fall into three main subgroups—documentary data, survey-based data, and those compiled from different sources.
With this particular study, the researcher utilized documentary secondary data (in the form of articles from books, journals, magazines, and newspapers) that are generally about the marketing strategies and customer satisfactions as well as relevant literatures and survey-based data in order to meet the objectives of this study. In order to analyse the data gathered from the survey, the weighted mean for each question item was computed. Weighted mean is the average wherein every quantity to be averaged has a corresponding weight. These weights represent the significance of each quantity to the average. To compute for the weighted mean, each value must be multiplied by its weight. Products should then be added to obtain the total value. The total weight should also be computed by adding all the weights. The total value is then divided by the total weight. Statistically, the weighted mean is calculated using the following formula:
or
The computed mean was then compared to the scale below for interpretation:
Range
Interpretation
4.50 – 5.00
Strongly Agree
3.50 – 4.49
Agree
2.50 – 3.49
Uncertain
1.50 – 2.49
Disagree
0.00 – 1.49
Strongly Disagree
Results of the survey were presented in tables. Excerpts from the survey process were integrated based on the analysis outline. Relevant literatures to support the findings are also included.
Validity
In order to test the validity of the evaluation tool which used for this study, the researcher tested the questionnaire to ten respondents. These respondents as well as their answers were not part of the actual study process and were only used for testing purposes. After the questions have been answered, the researcher asked the respondents for any suggestions or any necessary corrections to improve the instrument further. The researcher modified the content of the questionnaire based on the assessment and suggestions of the sample respondents. The researchers excluded irrelevant questions and changed vague or difficult terminologies into simpler ones so as to make the survey more comprehensive for the selected respondents.
Ethical Considerations
As this study utilized human participants and investigated on company practices, certain issues were addressed. The consideration of these issues is necessary for the purpose of ensuring the privacy as well as the security of the participants. These issues were identified in advance so as prevent future problems that could have risen during the research process. Among the significant issues that were considered included consent, confidentiality and data protection.
Statistical Treatment of the Data
After the collection of information from self-administered questionnaire, and related studies, the researcher collated all the data. The statistical analysis for the information from semi-structure questionnaire was conducted using Microsoft Excel where the data is tabulated, graphed, and evaluated. The testing of the level of significance was conducted using the Statistical Package for Social Sciences (SPSS) and tabulated in the Excel files. The SPSS is the standard software in conducting statistical analysis.
Percentage – to determine the magnitude of the responses to the questionnaire:
where: n = number of responses
N = total number of respondents
Weighted Mean:
where: f – weight given to each response
x – number of responses
xt – total number of responses
To evaluate the information gathered, the percentage analysis and mean analysis are used.
Chapter 4
Presentation, Interpretation and Analysis of Data
In this chapter, the data gathered from the chosen respondents who are mostly managers of different apparel industries (China and International) are presented and analysed. This chapter discusses the results of the structured survey questionnaires given to the 50 chosen respondents and the result of the survey process which has been initiated among 50 senior managers of international and Chinese apparel industries. Prior to the initiation of the survey process, the purpose, the importance, and objectives of the study were relayed to the chosen respondents.
They were also assured that all the information they had provided are solely for the purpose of the study while their identities would remain confidential. All questions asked in the survey questionnaire pertain only to the respondents’ insights regarding the significant relationship of china and international apparel industries with each other. For a clearer presentation, the findings of the survey are presented in graphs and tables and the findings of the conducted survey were also presented. To give an appropriate flow of discussion, findings are also divided into sections.
Section one gives a summary of the demographic profile of the participants used in the study. This profile was categorized according to the respondents’ age, gender, civil status, educational attainment and length of service in their respective apparel industries.
The discussion of the perception the managers who took part in the study about the advantages and shortcomings of Chinese apparel industries as compared with international apparel industries will be provided in the next section. The third section will also discuss the perception of respondents about how Chinese apparel industry affects international apparel industries. The next section, on the other hand, will discuss how international apparel industries affects Chinese industry and the last part will be the determination on whether Chinese apparel and international industries have a significant relationship. Upon completion of the data gathering activity, the respondents who passed the consistency measures of the researcher totalled to 50 accomplished survey questionnaires.
Demographic characteristics of the respondents
In order to have a general idea on the general social and economic characteristics of the respondents, the data and discussion provided in this section of the results and findings of the study presents the details of the overall description of the sample population.
Age. In terms of age, almost three-fourths of the total number (78%) of respondents comprises the adult group categorization (30 – 59 yrs. old) while the age of the remaining participants compose the managers who are below 20 years old (4%), and 20 to 29 years old (18%). A more graphic illustration of the respondents’ age distribution is detailed in the pie chart below.
Figure 2
Gender. The data also indicated that more than half of the respondents (66%) are female while the remaining participants in the research activity are male (34%). It could be inferred that the job nature in apparel industry provides career opportunities to women than men. Figure 3 below illustrates the specific results of the research study in terms of the gender of the respondents.
Figure 3
Civil status. Meanwhile, the largest portion of the respondents (64%) indicated that they are married followed by those who are single (20%), thus supporting the inference in Figure 1 regarding their familial responsibilities. Managers who claimed that they are separated comprises of 4% out of 50 respondents and widows/widowers (12%). From these research results, it is evident that three-fourths of the respondents (84%) attend to and meet the needs of their immediate family members. See Figure 5 below for the details of the research findings on the participants’ claimed civil status.
Figure 5
Years of employment in the company
The largest portion of the total number of respondents (50%) stated that they have 6-10 years of working experience in the apparel industry followed by the managers who have gained 11-15 years of career experience (36%) in the apparel industry. It is remarkable to note however, that there are 14% of the respondents who have 5 years or less of work dedicated to the organization. These findings are clear indication that the company has interesting strategies of minimizing the turnover of the employees and provides good opportunities to company members who have relatively lesser experience in the company operations. Details of these findings are illustrated in Figure 6 below.
Figure 6
Part 2: Perception of Respondents
The proceeding sections will present the results in accordance to the Likert technique. It will be remembered that the respondents of the study were presented a set of attitude statements so they can express their agreement or disagreement with the use of a seven-point scale, wherein 5 is equivalent to an answer that merits a strong agreement and 1 as showing a strong disagreement (see chapter 3). This will provide a greater understanding about the observations of the following respondents towards the relationship of Chinese and international apparel industry.
Table 1
Advantages and Shortcomings of Chinese Apparel Industries
Statements
5
4
3
2
1
Weighted Mean
Interpretation
Advantages
1. The Strong commitment of the Chinese apparel industry to have a strategic industry system serves as one of the advantages of China.
33
17
0
0
0
4.66
Strongly Agree
2. The corporate social responsibility contributes as one of the advantages of Chinese apparel industry.
25
23
2
0
0
4.46
Agree
3. The lower labor cost contributes to the advantages of Chinese Apparel Industry.
31
19
0
0
0
4.62
Strongly Agree
4. Chinese apparel industry offers lower price than international apparel industry.
29
21
0
0
0
4.58
Strongly Agree
5. Price and quality of the apparel products constitutes to the industries’ advantage,
35
14
1
0
0
4.68
Strongly Agree
6. The management of Chinese apparel industry address the need to cope with the needs of the global consumers.
37
13
0
0
0
4.74
Strongly Agree
Shortcomings
7. Lower price also served as a shortcoming for Chinese apparel industry because it obstructs international expansion.
33
17
0
0
0
4.66
Strongly Agree
8. Chinese textile and apparel industry lacks intangible assets and core competitiveness for its sustainable
Development.
18
25
7
0
0
4.22
Agree
9. The domestic enterprises’ technique level is low.
11
13
2
14
10
3.02
Uncertain
10. The capacity for research and development is insufficient.
21
19
0
10
0
4.02
Agree
11. The innovation capability of Chinese apparel is not strong.
18
28
4
0
0
4.28
Agree
12. The proportion of Chinese apparel products with high valued is obviously
lower than the developed countries.
21
19
0
6
4
3.94
Agree
Table 1. The table above indicates the perceptions of the respondents pertaining to the advantages and shortcomings of Chinese apparel industries as compared to international apparel industries. The answers of the respondent’s ranges from uncertain agree and strongly agree. In line with the advantages of the Chinese apparel industries the respondents strongly agreed that the strong commitment of the Chinese apparel industry to have a strategic industry system serves as one of the advantages of China. In addition, the respondents also strongly agreed that the lower labor cost of Chinese apparel industry, the lower price, and quality of the products of the apparel industries also served as advantages of Chinese apparel industries against international apparel industry. In addition, the respondents also strongly agreed that the management of Chinese apparel industry address the demands of the global consumers in terms of apparel products. On one hand, the respondents only agreed that their corporate social responsibility can be considered as one of the advantages of Chinese Apparel Industry.
In terms of the shortcomings of the chinese apparel industries, it has been revealed that as perceived by the respondents, they strongly agreed that although the lower price can be considered as an advantage for chinese apparel industry, it can also be considered as one of their shortcomings because the respondents believed that lower prices hinders international expansion of Chinese apparel industries. The managers who participated in this study agreed that the Chinese textile and apparel industry lacks intangible assets and core competitiveness for its sustainable development. In addition, they also agreed that one of the shortcomings of Chinee apparel industry is the insufficient capacity of the industries for research and development. The respondents agreed that the innovation capability of Chinese apparel industry is poor and that the proportion of Chinese apparel products with high valued is seen to be lower than the developed countries. The respondents are uncertain on whether a domestic enterprise of China’s apparel has a low level technique.
Table 2
How Chinese Apparel Industries affects International Apparel Industries
Statements
5
4
3
2
1
Weighted Mean
Interpretation
1. Chinese Apparel industries affect international apparel industries in terms of providing cheaper price for the customers.
33
17
0
0
0
4.66
Strongly Agree
2. Chinese apparel industries affects global production of apparel goods in terms of mass production.
25
23
2
0
0
4.46
Agree
3. Competition with China is a challenge for international apparel industries in various regions, especially those that have similar comparative advantage in labor intensive apparel products.
29
21
0
0
0
4.58
Strongly Agree
4. The accession of WTO to China has had a major impact on the international market, especially the US and European Union apparel markets
31
19
0
0
0
4.62
Strongly Agree
5. The high competitive advantage of Chinese Apparel industries in terms of having low labor cost affects the international apparel industries.
35
15
0
0
0
4.70
Strongly Agree
Table 2 presents the perception of the managers on how Chinese apparel industries affects international Chinese industries. Herein, the answers of the respondents revealed that the Chinese Apparel Industries affects international apparel industries in terms of labor costs and price aspects. It shows that the respondents strongly agreed that the low labor cost and cheaper products price impacted international apparel industries in implementing such system within their apparel industries. Furthermore, the respondents also strongly agreed that the accession of WTO to China has had a major impact on the international market, especially the US and European Union apparel markets. On one hand, the respondents only agreed that the mass production system within china affects the production of International apparel industry.
Table 3
How International Apparel Industries affects Chinese Apparel Industries
Statements
5
4
3
2
1
Weighted Mean
Interpretation
1. International apparel industries affect chinese apparel industries in terms of technology and innovation aspects (production and manufacturing equipments).
33
17
0
0
0
4.66
Strongly Agree
2. Chinese apparel industries is affected by international apparel industries in terms of having a quality and standard apparel products than low-medium quality products.
31
19
0
0
0
4.62
Strongly Agree
3. Competition with other international apparel industries with labor intensive apparel products also provides challenge on how Chinese apparel industry compete in the global market.
29
21
0
0
0
4.58
Strongly Agree
4. The ability of larger international apparel industries to reach more customers through the use of internet and information technology affects the competitiveness of Chinese apparel industries.
31
19
0
0
0
4.62
Strongly Agree
Table 3 displays the perception of respondents/managers on how international apparel industries affect Chinese apparel industries. In this regard, it can be said that there are four aspects in which international apparel industries affects Chinese apparel industries. This include technology and innovation aspects in terms of the production and manufacturing equipments, having a quality and standard apparel products, labor intensive apparel products in some international industries and in terms of the information technology and internet used of most developed and large international apparel industries.
Relationship of the Chinese Apparel Industry
With International Apparel Industry
This part of the paper will analyse the relationship of Chinese Apparel industry and international apparel industry using correlation. The strength of the linear association between these two aspects is quantified by the correlation coefficient. Given a set of observations (x1, y1), (x2,y2),…(xn,yn), the formula for computing the correlation coefficient is given by:
Where:
= Correlation between X and Y
= Sum of Variable X
= Sum of Variable Y
= Sum of the product X and Y
N= Number of Cases
= Sum of squared X score
= Sum of squared Y score
In addition, the correlation coefficient always takes a value that ranges from -1 and 1, with 1 or -1 imply perfect correlation (all points would lay along a straight line in this case). A positive correlation implies a positive association between the variables (increasing values in one variable correspond to increasing values in the other variable), while a negative correlation signifies a negative relation between the variables (increasing values is one variable correspond to decreasing values in the other variable). A correlation value close to 0 indicates that there is no association between the given variables.
Since the formula for calculating the correlation coefficient standardizes the variables, changes in scale or units of measurement will not affect its value. For this reason, the correlation coefficient is often more useful than a graphical depiction in determining the strength of the association between two variables. In addition, if the correlation index of the computed rxy is not perfect, then it is suggested to use the following categorization:
rxy Indication
between ± 0.80 to ± 1.00 : High Correlation
between ± 0.60 to ± 0.79 : Moderately High Correlation
between ± 0.40 to ± 0.59 : Moderate Correlation
between ± 0.20 to ± 0.39 : Low Correlation
between ± 0.01 to ± 0.19 : Negligible Correlation
Analysis
Table 5
The table above provides the descriptive statistics of the answers based on Table 2 (how Chinese apparel industry affects international apparel industries) and Table 3 (how international apparel industry affect Chinese apparel industries.
Table 6
Relationship of the Chinese Apparel Industry
With International Apparel Industry and Vice Versa
The correlations table displays Pearson correlation coefficients, significance values, and the number of cases with non-missing values. Pearson correlation coefficients assume the data are normally distributed. The Pearson correlation coefficient is a measure of linear association between two variables.
Basically, the values of the correlation coefficient range from -1 to 1. The sign of the correlation coefficient indicates the direction of the relationship (positive or negative). The absolute value of the coefficient of correlation signifies the strength, with larger absolute values showing stronger relationships. The correlation coefficients on the main diagonal are always 1.0, because each variable has a perfect positive linear relationship with itself. Correlations above the main diagonal are a mirror image of those below.
In our data, the correlation coefficient for effective the entrepreneurial orientation (independent) and organisational performance of Malaysian SME Coating Industry (dependent) is 0.982. Since 0.982 is relatively close to 1 or -1 this indicates that Chinese apparel industry and International apparel industries is highly correlated.
The significance of each correlation coefficient is also displayed in the correlation table. The significance level (or p-value) is the probability of obtaining results as extreme as the one observed. If the significance level is very small (less than 0.05) then the correlation is significant and the two variables are linearly related. If the significance level is relatively large, for example, 0.50, then the correlation is not significant and the two variables are not linearly related. It shows that the significant value for these two variables is .000 which means that they are linearly related.
Chapter Five
Summary, Conclusions and Recommendations
A. Summary
The main goal of this study is to determine the relationship of Chinese apparel industry and International apparel industries. In addition, the research also aims to determine the advantages and shortcomings of Chinese apparel industries as compared with international apparel industries and to known how both apparel industries affects each other. The have used 50 respondents in order to achieve the objective of the dissertation. Based on the data gathered and analysed, it has been found that the major advantages of Chinese apparel industries includes lower price of apparel products, low labor cost for their production, effective management system of the apparel industries, the strong commitment of the chinese apparel industries and their corporate social responsibility. On the other hand, the researched also revealed some shortcomings of the Chinese apparel industries. These include the lower price which hinders international expansion, the quality of the apparel products and the technology and innovation.
The result of the study showed that Chinese apparel industry affected international apparel industries in 5 aspects: labor costs and price and global production factors, the successful accession of WTO to China and the production system of Chinese apparel industries. Whereas, the international apparel industries affects Chinese apparel industries in four aspects: technology and innovation aspects (production and manufacturing equipments), having quality and standard apparel products than low-medium quality products, Competition with other international apparel industries with labor intensive apparel products and ability of larger international apparel industries to reach more customers through the use of internet and information technology. In this regard, it can be summarised that both international and Chinese apparel industries have their strengths and weaknesses in competing in the global market. In addition, although both the industries are being pressured by some factors that threaten their market position and competitiveness, the both international and Chinese apparel industries are still able to cope with these factors and they are able to implement effective strategies to maintain and sustain their competitive position.
Conclusions
It can be said that apparel industry is a conventional industry. Based on the gathered data, China has been considered as a dominant supplier of apparel and textile products as compared with other international apparel industries. The Chinese apparel industry has been able to achieve its increasing momentum after its economic reform and WTO accession. In this research, it can also be said that the competition of the international apparel industry has changed from price and quality principle to a more high-technology oriented. In most international apparel industries, their competitive advantage against Chinese apparel industry relies on their advantage in terms of capital and technology. On one hand, it can be concluded that even if Chinese apparel industry has its shortcomings, it cannot be denied that it also affects international apparel industry. Chinese apparel products simply dominates the lower market in the industrial chain which affects the performance and competitiveness of most international apparel industry. The labor intensive production of china as well as the cheaper price it offers among customers has paved the way for Chinese apparel industry to become a world leader. With Chinese apparel industries’ strategy, the apparel industry certainly boasts competitiveness. On one hand, International apparel industries have also some aspects which Chinese apparel industries don’t have, hence, affecting the competitiveness of the latter. With these findings, it can be concluded that Chinese apparel industries influence international apparel industries and vice versa.
Recommendations
The data shows that there are some factors which affects both Chinese and International apparel industries. This study revealed different aspects that can be attributed on how both industries affects or influenced each other. These include labor costs, price, effective management, technology and innovation (production equipments), internet and information and the quality of the apparel products. In this regard, it is recommended that the apparel industries both in China and International market should continuously find ways or strategies that will enable them to be successful and meet the level of effectiveness for each of the aspects mentioned. In this research paper, it becomes apparent that labor costs, price and technology strategy are among the key factors for apparel industries to succeed and meet the goal of having a competitive apparel industry. In addition, the company should be able to have a strategic approach in these factors.
It is also recommended that the apparel industries (both Chinese and International apparel industries) must consider that analysis of business competitors does not end after they found who their rivals are. There is still a need to find ways on outgrowing their rival industries.
Future Research Directions
The study conducted for the Chinese Apparel industry and International apparel industry can be enhanced further through the following future research recommendations:
1. Future researchers using a similar topic may consider the use of a larger sample instead of just using 50 respondents from Chinese and International apparel industries. This could be helpful in making the findings more applicable in general.
2. Other methods of research and data-gathering such as meta-analysis or regression analysis may be used in the future to determine the connection between the factors that influence the both Chinese apparel industry and International apparel industries.
Appendices
Survey Questionnaire
Relationship of Chinese Apparel Industry
with International Apparel Industry
The researcher is conducting an evaluation of the relationship between the Chinese apparel industry and international apparel industry and how they influenced each other. To enable the researcher to make the necessary conclusions and recommendations for this study, it would be very much appreciated if you answer all the items in the questionnaire.
Information given will be treated in strictest confidence.
Thank you.
Part 1. Demographic Profile of Respondent
Direction: Please fill up in all the necessary information about yourself. Don’t leave any item unanswered.
Direction: Please fill up in all the necessary information about yourself. Don’t leave any item unanswered.
a. Age
Below 20 ( ) 20 – 29 ( ) 30 – 39 ( ) 40 – 49 ( )
50– 59 ( ) 60 above ( )
b. Gender
Male ( ) Female ( )
c. Civil Status
Single ( ) Married ( ) Separated ( ) Widow/Widower ( )
d. How long have you been working for the apparel industry?
Below 5 years ( )
6-10 years ( )
11-15 years ( )
16-20 years ( )
21 years-above
Part 2: The Perception of the Respondents
Direction: Check the number corresponding to your answer
5 - Strongly Disagree
4 - Disagree
3 - Uncertain
2 - Agree
1 - Strongly Agree
1. What are the Advantages and Shortcomings of Chinese Apparel Industries?
Statements
5
4
3
2
1
Advantages
1. The Strong commitment of the Chinese apparel industry to have a strategic industry system serves as one of the advantages of China.
2. The corporate social responsibility contributes as one of the advantages of Chinese apparel industry.
3. The lower labor cost contributes to the advantages of Chinese Apparel Industry.
4. Chinese apparel industry offers lower price than international apparel industry.
5. Price and quality of the apparel products constitutes to the industries’ advantage,
6. The management of Chinese apparel industry address the need to cope with the needs of the global consumers.
Shortcomings
7. Lower price also served as a shortcoming for Chinese apparel industry because it obstructs international expansion.
8. Chinese textile and apparel industry lacks intangible assets and core competitiveness for its sustainable
Development.
9. The domestic enterprises’ technique level is low.
10. The capacity for research and development is insufficient.
11. The innovation capability of Chinese apparel is not strong.
12. The proportion of Chinese apparel products with high valued is obviously
Lower than the developed countries.
21
19
0
6
4
2. How Chinese Apparel Industries affects International Apparel Industries?
Statements
5
4
3
2
1
1. Chinese Apparel industries affect international apparel industries in terms of providing cheaper price for the customers.
2. Chinese apparel industries affects global production of apparel goods in terms of mass production.
3. Competition with China is a challenge for international apparel industries in various regions, especially those that have similar comparative advantage in labor intensive apparel products.
4. The accession of WTO to China has had a major impact on the international market, especially the US and European Union apparel markets
5. The high competitive advantage of Chinese Apparel industries in terms of having low labor cost affects the international apparel industries.
3. How International Apparel Industries affects Chinese Apparel Industries
Statements
5
4
3
2
1
1. International apparel industries affect chinese apparel industries in terms of technology and innovation aspects (production and manufacturing equipments).
2. Chinese apparel industries is affected by international apparel industries in terms of having a quality and standard apparel products than low-medium quality products.
3. Competition with other international apparel industries with labor intensive apparel products also provides challenge on how Chinese apparel industry compete in the global market.
4. The ability of larger international apparel industries to reach more customers through the use of internet and information technology affects the competitiveness of Chinese apparel industries.
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