Industrial Clustering of Textiles and Apparel in China: a Case Study

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Industrial Clustering of Textiles and Apparel in China: A Case Study

Zhiming Zhang, Chester To, & Ning Cao
Institute of Textiles and Clothing, The Hong Kong Polytechnic University

I. Introduction

In the late 1970s, China started economic reforms. Since then, the economy of China has been in transition from a planned one into a market oriented one. In this process the economic structure is experiencing profound changes. In the textile and apparel industry, one such change is the emergence of industrial clusters of various products.

In most cases, these clusters are towns in the countryside. In each of the localities, tens, hundreds, or even thousands of enterprises of various sizes have been formed and clustered together, and produce the same category of products. Enterprises of related industries which serve the clustering enterprises are also located nearby. According to China National Textile Industry Council (CNTIC), there are now 19 such township industrial clusters of textiles and apparel, which altogether have a total output of RMB238 billion (nearly US$30 billion), accounting for about one quarter of the total textile and apparel output of the country. About 1.81 million workers are employed in these clusters [1].

The phenomenon of industrial clustering of textiles and apparel has enormous significance. These clusters have helped strengthen in the international market the position of China, which is now the largest producer and exporter of textile and apparel products in the world. They have had significant impacts on the economic development of the localities, and on the economic geography of the country. They have helped create a large number of enterprises, entrepreneurs, and employment, which has important economic and social implications.

In spite the importance of the phenomenon, not much research has been conducted. This paper is intended to fill in the gap to some degree, and to arouse the attention of the academic community, as well as business community, to this important development. The information provided is thus of use to both researchers and to industrialists.

II. Previous Studies

Industrial clustering has long been observed in the developed countries. In the United States for example, the steel industry is concentrated in Pittsburg, the automobile industry is in Detroit, the financial industry in New York, and the textile industry in the North and South Carolinas. In recent years, the fast development of the high-tech industry in the Silicon Valley has particularly attracted the attention of both the academia and the business community. Much research has been conducted, and there is a large body of literature on the phenomenon of industrial clustering.

Krugman’s work on economic geography [6] has drawn the interest of economists to the idea of “increasing returns” to proximity in the form of clusters [7, 8]. Krugman's approach to regional agglomeration involves two basic concepts. First, there is the idea that regional specialization evolves for accidental reasons, and second, the notion that once these regions become established, they are sustained by the external scale economies.

Within the geography and spatial-planning literature, the interest in so-called new industrial districts arose primarily from observations of the spatial organization of production in several key industries such as the electronics industry in California and the clothing industry in northern Italy [16, 17]. Efforts were given to explaining contemporary location patterns of North American industries [18, 19]. It was stressed that some newly industrialized areas were characterized by vertically disintegrated production networks based on highly flexible and specialized firms that co-located in order to minimize transaction costs. In recent years, Silicon Valley as a cluster for some high tech industries has attracted particular attention of researchers. According to their studies, enterprises in...
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