CHINA'S TEXTILE AND CLOTHING EXPORTS IN A CHANGING WORLD ECONOMY

EXTILES and clothing are among the first manufactured products an industrializing economy produces. They played a critical role in the early stage of industrialization in Britain, parts of North America, and Japan, and more recently in the export-oriented growth of the East Asian economies. Hong Kong, the Republic of Korea, and Taiwan relied heavily on textiles and clothing for their exports from the 1950s to the mid-1980s. In the last two decades, several ASEAN economies and China have become large producers and exporters of textiles and clothing. Major South Asian economies, namely, India, Pakistan, Bangladesh, and Sri Lanka, have also emerged as significant textile and clothing exporters in the last few years. As more economies enter the world textile and clothing market, competition has become intense. At the same time the market remains the most protected among manufactured commodities in industrial economies. Although the Multi-fibre Arrangement (MFA), which has regulated the world textile and clothing market through voluntary export restraints (VERs) for over two decades, is to be phased out by the year 2005, tariffs on textiles and clothing remain high in industrial markets. Textile and clothing exports from developing economies are often subject to anti-dumping actions in industrial markets. Thus it is not clear to what extent the world market can accommodate further expansion of textile and clothing exports from developing economies. Despite the protection, import penetration for these commodities is among the highest in industrial markets. Thus in the long run, even