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The anticipated boost from the progressive elimination of U.S. and European Union (E.U.) trade quotas over the past years has not materialized for the Chinese textile and apparel industry. Although, China's textile and apparel industry gained market share in the U.S. and E.U., it did not make significant gains in the rest of the world in 2009. China's share of the global market jumped from 38.8% in 2001 to 47.1% in 2005, but has not risen since that period. In fact, in markets other than the U.S. and E.U., its share actually declined from 71.3% in 2006 to 66.8% in 2008. China's share of the U.S. apparel import market rose from 19.9% in 2003 up to an expected 35.9% share in 2009, and its share of the E.U. import market rose from 21.8% in 2001 to 42.8% in 2008. Competition for global market share from emerging countries is increasing, as a reduction in prices in 2009 benefited lowcost countries like Bangladesh and Vietnam at the expense of the Chinese textile and apparel industry (China's textile comparative advantage, 2009; Report of Chinese apparel, 2009).
Clearly, it is important to understand the environment of the Chinese textile and apparel industry to establish strategy that will achieve further success in the global economy.
This research analyzes the Chinese textile and apparel industry through Porter's industrial competitive framework because it not only offers insights into the environment, but also influences the industry's strategy and competitive position in the global economy. After discussing the theoretical framework, the framework is applied to the Chinese textile and apparel industry in terms of the global economy. Finally, the competitive positions of the world's major textile and apparel exporting countries are compared.
Theoretical Framework
The competitive advantage of a company or country reflects offensive or defensive actions to create a sustainable position in an industry or the global economy. According to Porter (1990), this requires the ability to maintain above-average performance within an industry. Strategy is the creation of a unique and valuable position, involving various activities (Porter, 1998). The success of a competitive strategy is a function of the attractiveness of the industries in which the firm competes and of the firm's relative position in those industries (Porter, 1980). According to Porter, competition...