Internalization Of Environmental Cost And The International Competitiveness Of China's Textile Product

Textile has been the dominant industry of China. Textile trade occupies a pivotal position in international trade, and brings great foreign exchange earnings to our country. But this advantage is built on the basis of low labor costs. This means China's textile export competitiveness depends on the lower price. However, since the global textile quota system has been abolished from January 1, 2005, China has become the focus of discussion . China's constant trade disputes with the United States and the EU, has always been a focus on the topic--the great increasing of China's textile trade disrupts their domestic markets because of the lower price of China's textile product. Fearing great production out of China's textile and costume industries, with significant price advantage, a number of WTO members have tried to extend the quota period. Although it could not be realized, they will find other ways to use regional free trade or technical barriers to obstruct China's exports of textile and costume products. Out of the needs of environmental protection and the protection of the market following the lifting of quotas, Western countries will lay down some more stringent environmental certification and accreditation system for testing harmful substances. It can be seen that the "post-quota era" set new challenges for China's textile exports. From long term, the products that set more attention to the quality of human health and the surrounding environment will be able to gain greater market share. The product that just has price competitiveness can not make the industry success. The way to get the access to the international market is strengthening the competitiveness of the environment. And the first step is to internalization of environmental costs. The research of international competitiveness of China's textile products which is based on the internalization of environmental costs plays an important role theoretically and practically to improve the international competitiveness and to promote a sustained and healthy development of China's textile industry. The paper makes an empirical analysis of the current international competitiveness of China's textile products, and also the impact of internalization of environmental costs to the competitiveness, and draws out countermeasures about how to improving the competitiveness of textile products. This paper is divided into four parts:The first part, discusses the internalization of environmental costs theory. Proposing internalization of environmental costs theory means environmental costs will be credited as a part of the total production cost. So the prices will accurately reflect the environmental cost of production and operations, including all costs, eliminate false prices caused by market failure. Internalization of environmental costs divided into three steps: the definition of ownership of assets, reasonable pricing of assets and the "polluter pays principle" .And there are three theories about the major impact of the internalization of environmental costs on the international competitiveness: the "theoretical level environment," "pollution haven" theories and "Porter's theory". These theories explained the impact that Environmental Protection on the international competitiveness from different sides. This text is the foundation part, laying the foundation for the next two parts.The second part, analyses the international competitiveness of China's textile through the data of import and export, trade competitiveness index and Revealed Comparative Advantage, and concludes: China's textile products have strong international competitiveness, but there are also many problems, such as various sub textile industries competitive imbalance, weakening international competitiveness, extensive growth.The third part, analyses the impact of internalization of environmental costs on the international competitiveness of China's textile products. First it is expounded the way to internalization of environmental costs of China's textile industry. There are two steps: recognizing the environmental impacts and monetization of environmental impacts. Second it is a detailed analysis of the impact of internalization of environmental costs on the international competitiveness of China's textile products, mainly from two perspectives of the cost and difference, and meantime taking consideration of our environmental standards, our dependence on the textile trade, social background of China's textile industry, the long-term an short-term effects . This is the core of the essay.The fourth part, gives policy recommendations: the government should enact environmental regulations and standards, increase monitoring of the environmental aspects of the textile; and give preferential policies from the macro level. Enterprises should make profits with the goal of maintaining social benefit; solve the environmental barriers in the international trade; cooperate with the developed countries and relevant organizations about environmental protection and technological exchanges; strive for the support and cooperation from the government; find ways to open up a green textile market; develop ecological competitiveness; meanwhile optimize the structure of the product; take attention to the health of consumers, carry out the whole production process control and clean production; apply for green signs; establish the concept of Green Marketing; fully aware of that the environmental protection will be an important way to increase the competitiveness of its products.The fifth part, reaches the conclusion that the impact of the internalization of environmental costs on the international competitiveness of China's textile is enormous. China should take measures both from the government and enterprises to ensure the international competitiveness of China's textile.