Study On The Approaches To Upgrading China Textile Industry Within The Product Space Theory

The textile industry in China is a traditional pillar industry,important for the civilian production industry that creates new advantages in the internationalization of the national economy.Since the founding of the People’s Republic of China,the exporting textile industry has gone from short supply to oversupply,absorbing from millions of employed people to tens of millions,and increasing its earnings from 100 million dollars to 246.4 billion dollars.Nowadays,the textile industry is playing tremendous role in beautifying people’s lives,enhancing overall national strength,and social development.The economic development of the textile industry in china is entering a new level and it has experienced a rapidly changing phase with the international structural differentiation as well as the changes in the international trade order.For example,the trade surplus has maintained a certain growth,but the growth rate has fallen sharply.At the same time,the textile industry in China entered a period of growth reform due to the changed business environment such as soaring raw material and labor costs prices,increasing energy efficiency,emissions reduction,and environmental protection requirements.However,the textile industry is reducing its growth momentum to achieve sustainable competitiveness due to the long-term OEM production,insufficient independent innovation,and low brand marketing capabilities and it’s becoming weaker every year with new challenges breaking through the dilemma of "low-end locking" in the global value chain.In this context,it is of great strategic significance and practical value to analyze the mechanism and influencing factors of China’s textile industry falling into the "low-end locking" of global value chain based on Product Space Theory,and to find a new path for the sustainable improvement of China’s textile industry’s competitiveness.Therefore,the perspective of this paper is the Product Space Theory.The research topic is how to upgrade the Chinese textile industry into a more sustainable and competitive industry.The main contents and general ideas include:Firstly,the upgrading of the textile industry based on the Product Space Theory,because the Industrial Structure Optimization Theory,Global Value Chain Theory,and Product Quality Ladder Theory cannot explain the unsustainable realities of the competitiveness of the middle-income countries like China.The highlight of the Product and "disconnection" may occur Space Theory is that it can capture the heterogeneity of the product space.The meaning of the heterogeneity is that the product upgrades are not continuous.From this viewpoint,it is more explanatory that the evolution trajectory,influencing factors,and mechanism of the upgrading of China’s textile industry based on the Product Space Theory.At the same time,the source of ideas,core ideas,key concepts and policy connotations of Product Space Theory are elaborated.Secondly,the development status and obstacles of China’s textile industry are described using the horizontal international comparison method and the vertical self-comparative method at different stages of the development.Thirdly,the upgrading of the textile industry under the framework of Product Space Theory is a process of synergy between internal structure upgrading and added value enhancement.From the perspective of capability,it is a process in which a country’s enterprises discover what kind of textile products they are good at producing and master their abilities in "learning-by-doing".A path-dependence in its upgrading and development,it is represented by the process of increasingly jumping from the edge to the core area in the global product space with "core-edge" structure.The upgrade of the textile industry is based on the combination of external conditions(industrial policy)and internal conditions(following comparative advantage for self-discovery and self-innovation).Fourthly,we can combine the complex network analysis method with the econometric method biologically,and empirically analyze the influencing factors of China’s textile industry upgrade from the perspective of Product Space Theory.At the same time,the nonlinear characteristics of the textile industry upgrade were tested ingeniously using the threshold model.Also,it is value noting that the development of the textile industry in China has long been affected by the government’s industrial policies,so the impact of textile industry policies has been further studied.Fifthly,we set the upgrade path of China’s textile industry based on the theoretical and empirical analysis.The conclusions and the main points of this paper include but are not limited to the following aspects:(1)Although the Chinese textile industry has made significant achievements,it has gradually deviated from the comparative advantage.The use of panel data with 98 kinds of textile products in China from 1962 to 2018 for a threshold regression,results that the promotion of product density to the textile industry is gradually weakening,which indicates that the Chinese textile industry is gradually deviating from the comparative advantage.The expanded country heterogeneity analysis shows that China’s textile industry is more deviated from comparative advantage compared with the same level of middle-income countries,and there is still a big gap compared with countries with high-income countries.The results of further examination of the influence of China’s textile industry policy show that the upgrading of China’s textile industry is affected by the laws of the market economy and government behavior.The pursuit of a catch-up development strategy has gradually led the textile industry to deviate from a comparative advantage in the development process.(2)China’s textile industry is facing the dilemma of upgrading "breaking".The same data is used to carry out the threshold panel regression,the product complexity index(PCI)inhibited the upgrading of the textile industry,and the degree is a nonlinear trend that aggravates firstly and then weakens.The results of the mechanism test show that PCI inhibited the upgrading of textile products,although the product complexity supports the textile products to maintain their superiority,and,as a result,the upgrading of the textile industry is inhibited.This means that the Chinese textile industry is facing an embarrassing situation in which the existing comparative advantages have gradually disappeared and the new comparative advantages have not yet been formed.the interaction of density and PCI is tested.It is found that density is positive to inhibit the negative impact of product complexity on the upgrade of the textile industry.This shows that China’s textile industry upgrade is path-dependent process,relying on accumulated production capacity and factor endowment.Further test results of the policy effect of the textile industry indicate that the textile industry policy has made product complexity inhibit the upgrading of the textile industry.(3)The accumulated production capacity and factor endowment of China’s textile industry are insufficient to support its leap-forward upgrade.The same data is used to carry out the threshold panel regression,and it is found that the inhibition of Opportunity Outlook Gain(COG)on the upgrading of the textile industry is gradually weakening.The results of the mechanism test indicate that COG inhibited the upgrade of the textile industry by inhibiting product upgrade successfully and inhibiting product lose comparative advantage.This suggests that COG has a declining support for the textile industry to maintain its comparative advantage.The results of the tested threshold model of the interaction between product density and COG show that the product density has a threshold effect on the positive adjustment effect of COG.The COG inhibits the upgrading of the textile industry when the product density is in the low-level regime,and COG only becomes beneficial to the textile industry upgrade when density crosses the low-level regime.Combined with the reality that China’s textile industry is still at the low end of the global value chain,it can be seen that the product density of China’s textile industry is still in a low-level regime,which means that the current accumulated production capacity and factor endowment of the Chinese textile industry is not enough to support its "leapfrog" upgrade(4)Four upgrade paths are designed:Upgrade along the adjacent products;Product structure upgrade and product value upgrade synergy;The enhancement of international competitiveness of high-complexity textile products;The exploration of COG of textile products with high potential for upgrading based on the principle of comparative advantage,optimizing the overall network of textile Product Space,and combining "market" and "government".