A Comparative Research On Dynamic Growth Of China’s Textile&Apparel Export In Post-MFA Era

During the first decade of21st century, Chinese textile&apparel export has achieved rapid growth, and textile global production network (GPN) has accelerated in restructuring. In2001, China became a member of WTO and was offered the multilateral, stable and unconditional most-favored-nation treatment. In2005, Multi-Fibre Arrangement (MFA) phased out, leading to the re-liberalization of world textile&apparel trade. In2008, world commodity trade suffered from global financial crisis, and it reached bottom in2009. Under the influence of above events, global textile&apparel trade experienced profound changes, and fierce competition has been witnessed among old and emerging textile&apparel exporters.This paper chooses China as a study object, EU15, ASEAN+Bangladesh, and rest of the world as comparison objects, and fiber (SITC26), fabric (SITC65) and apparel (SITC84) as study products. With the world trade data of2000-2010, this paper looks into the changes of export volume and market share of China and its main competitors during the past decade, discusses the development of global textile industry and China’s role in it, and analyzes how the phase-out of MFA influenced textile GPN restructuring and China’s textile&apparel export growth.The evolvement of world textile&apparel trade and the transition of exporters’market share result from choices of innumerable importers and consumers, and this choosing process are decided by multiple factors such as price, brand, delivery date, trade policy and exchange rate. This paper takes a macro perspective, regards textile&apparel trade as a random process, and introduces Markov Transition Matrix (MTM) to simulate the process and express its mechanism. Based on2000～2010world market share data of SITC26, SITC65and SITC84, this paper uses Minimum Absolute Deviations (MAD) to estimate MTM of the three products. Result shows that China experienced continuous growth on world’s fabric and apparel market, mainly because of its comparative advantage and high loyalty of the market.The residual analysis and afterwards prediction of MTM reveal that this model has high simulation capability and is able to precisely describe market trends and illustrate influence of external environment(such as phase-out of MFA), making it an effective tool for prediction. Therefore, this paper uses the estimated MTM to predict market share changes on fiber, fabric and apparel market in the next five years after2010. Result shows that on fabric and apparel market, China will take significantly large share, the growth rate of which, however, will decrease. While china is likely to benefit from the phase-out of MFA, it’s not the only winner. Different exporters, with their own comparative advantage, will share the market.