| Textile industry is development engine of the economy of China, and has made great contribution to the economic growth, urbanization, and industrialization. However, as the forerunner of marketization in China, the textile industry has some industrial characters, such as intensive labor, high labor cost; labor intensity, the poor working environment; high pollution, high energy consumption; the global industry network and so on. These characteristics have decided some particularity about fair competition, fair trade in this industry, such as:a variety of fiber agreement, post-quota era, special security measures in post-quota era, anti-dumping, market economy status, technical barriers, social responsibility, which have become new special problems of fair trade in China's textile industry.Those have made problems of excessive competition, unevenly distributed and unfair competition more serious, which lead to frequent trade frictions and disputes. These problems weaken not only the enthusiasm of employee and the innovation of company, which result in social conflicts, but also the Chinese textile industry's core competitiveness and international market competitiveness.Fair competition means all competitors in the market compete under the same situation and with equal opportunity. That is equal competitive conditions, equal competition opportunity and fair competition means.In this paper, based on the exploration of the fair, fair competition, business performance and their relationships, it shows indicators of the internal scene, the external pressure, external drive, and measurement index, which will affect fair competition. In addition, the author classified business strategies, and studied the content of economic and social benefits, their relationships and indicators related to the corporate performance. Furthermore, the author has built the CSP model to explain the influence of fair competition to business performance, by using an empirical research. This empirical research about the Chinese textile and garment industry includes surveys and case studies.109 enterprises were surveyed, mainly in Shandong province, followed by Zhejiang province, shanghai, Beijing, and Gansu. This paper has built CSP model, which means context, strategy and performance and the relationship between the related variables.The questionnaire was designed by five scale method, including 64 questions and 3 categories:context, strategy and performance. The reliability analysis and validity analysis were made to confirm the questionnaire's internal consistency and accuracy. Additionally, this paper used descriptive statistical analysis to analyze the basic conditions of enterprises, applied related analysis to analyse firm's strategic options affected by different internal and external situations. After that, strategic choices for enterprises were classified by using cluster analysis. Finally, the structural equation analysis model was applied to analyze the influence of the Strategic choices to economic and social benefits.This paper has some innovative viewpoints, such as combining the theory research and empirical research, validating repeatedly with many methods. Empirical research results and theoretical research conclusions are basically consistent, but there are new findings.The major findings are as follows:1) Fair competition strategy reflects internal situation:empirical findings are consistent with the theoretical findings, which proves the hypothesis that the good internal situation will make the firm choose a positive strategy is true. The representative case, Jiaxin Eco-technology Co.,Ltd, further confirms the results of theoretical and empirical research.2) External pressure and impact drivers are not an important factor in the selection of fair competition:theoretical studies suggest that, external pressure and external driving force will affect the choice of positive strategy a lot. However, this study found that external pressure and external driving force did not affect the choice of positive strategy. The part of results of this study is opposite to theoretical studies, but this is the fact of China's textile and garment industry. The case study of the Zhao Yang Hong Xing knitting Co.,Ltd further confirms the empirical study.3) Enterprises fair competition strategy is divided into passive obedience and proactive adaptability:from perspectives of the attitude and join forces, enterprises fair competition strategy can be divided into four types, which are disobedience-type strategy, passive obedience-based strategy, active adaptive strategy and win-win type of strategy. According to the clustering analysis based on the aim, attitude and performance of businesses' fair competition, in this empirical study, the modern enterprises can be divided into two categories: passive obedience-based kind and active adaptive kind. Two representative cases have confirmed this result respectively. Jiaxin Eco-technology Co.,Ltd took active adaptive strategy, but Zhao Yang Hong Xing knitting Co.,Ltd chose passive obedience strategy.4) Company's strategic choices affect their economic and social benefits:fair competition need to devote some benefit. The corporate profits lag of fair competition make companies that focus on the maximum short-term profit will not take the active one. But the empirical studies in the paper have proved that, there would be a positive relation between active competition strategy and economic and social benefits. This is in favor of the theoretical research and the prior hypothesis. The results of this study would also have reference value to the competition of other industries. According to the conclusion, the following recommendations about fair competition in China were made:1) Conducting fair competition strategy actively:this study shows fair competition can improve performance. As a result, fair competition is an investment, rather than just cost, which can provide a positive performance.2) Improving the internal management mechanism:this paper advices companies to strengthen internal management. After preparation, surveying, designing programs, pilot run, operation, and follow-up improvement, a set of performance improvement system can be established, including business goals, corporate culture, incentives and operational mechanisms, in order to participate in the global market and enhance business performance quickly.3) The government's economic function effectively play:the government failed to effectively play the role, which results to social resources cannot reach optimum allocation. The phenomenon of the government failure will appear. In order to avoid this situation, when the government intervention in the economy appeared fail, the government should give full play to its economic functions, and remedy defects of the market.Considering the lack and limitation of the variables design, the indexes selection, the selection of survey sample in this study, incorrect conclusions may be resulted in. Two conclusions in this study that were put forward cautiously are opposite to the theoretical researches and initial hypothesis. Those can be the reference for decision making of both companies and the government, and need to be further studied as well.
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