A Study On China Apparel Industry Up-grading: Global Value Chain Approach

Since late 1970s, China has accepted the transfer of apparel industries from Japan, Europe, the United States, Hong Kong, Taiwan and other regions. And since early 1990s, China has become the world's largest apparel exporter. During the 30 years, however, Chinese apparel enterprises still mainly engaged in processing for foreign agents, almost none of self brand was marketed in world market. China become only the world's largest factory, governed by the value chain leaders from other countries, earn to the little processing fees. The apparel industries in china deteriorated gradually, locked in the lower position in the global value chains. Due to factors as rising labor costs, RMB appreciation, foreign trade barriers, global financial crisis, foreign trade orders declined seriously. It is the high time for Chinese apparel industries to upgrade now.Global Value Chain approach covers the subject of economy, geography, management and sociology etc. It analyses the subject of vertical division and horizontal centralization in value creation. This theory originated from a large number of empirical studies on processing trade in East Asian, and accumulated a lot of experience in industry upgrade in developing country. Therefore, it is appropriate to adopt this approach to deal with china apparel industries upgrading.The first part of this paper briefly introduces the research background, purpose, methods and ideas. Then it systematically summarizes the origin of global value chain theory, research paradigm and research progress. Based on global value chain approach, the paper analyzes the value chains on which China apparel industries operate the chain profit distribution characteristics, the position of china actors on the global value chains. Based on econometric analysis, the paper claims that the main reasons why China apparel industries failed to upgrade during 30 years is lack of technological innovation. The last part of paper, we put forward some policy suggestions for government and business in order to promote china apparel industries upgrading.