You are on page 1of 10

Name 1

Name
Professor
Course
Date
Globalization affects China Clothing Manufacturing Industry
Globalisation refers to the integration of industries, markets, economies, policy making
and cultures across the world. It describes a process by which regional and national economies,
cultures and societies have been integrated through the global network of communication,
transportation, trade and immigration (Aghion and Jeffrey 1; par 1). Knutsen explains the term
globalisation as a multidimensional process that serves to compress the world (227; par 1). The
major factors of globalisation include advanced transportation, telecommunication, infrastructure
and technology like telegraph and the internet. In the recent past, globalisation has been focusing
primarily on the worlds economic side such as foreign direct investment, trade and capital
inflows. However, the term has recently expanded to include categories like media, culture,
technology, political, socio-cultural and even biological like climate change (Aghion and Jeffrey
1; par 6).
The history of globalisation traces its way back from the early civilization period to
1600s where the creation between communities and states was done through the geographical
Name 2

transmission of ideas and social norms both at regional and local levels. Between 1600 and 1800
the concept of globalisation was introduced by historians Christopher Bayly and Hopkins
(Aghion and Jeffrey 2; par 1). During this period there were increased cultural exchanges and
trade links that characterised the immediate period of high globalisation in the modern world in
the late 19
th
century. This period was marked by the move of hegemony to Western Europe,
trade arrangements like East India Company, increased conflicts between nations and the rise of
slave trade. In the 19
th
century, globalisation reached its modern form due to the industrial
revolution. Imperialism shaped globalisation during this period. There was standardised
household items production using economies of scale and increased population growth created
and sustained demand for these commodities (Aghion and Jeffrey 3; par 3).
In the present day globalisation is seen in the increased international trade, economic
blocks, trade agreements and trade zones, tax havens, international tourism, international sports
as well as a global financial system. All these have been made possible by globalisation; the
British service can deal with its clients in India through a call centre, or a manufacturer of
sportswear to design in Europe, make them in Asia and sell them in America. However, there is
an anti-globalisation school of thought who argues that globalisation is a way of surrendering
power to powerful corporations and keeping the poor nations poor(Aghion and Jeffrey 3; par 5).
Some of these negative effects include disposing off state owned industries as a condition to
Name 3

qualify for IMF and World Bank aid; GM seed forced to farmers in developing countries, low
paid sweatshop operators and increased domination of European and US corporate cultures
across the world (Aghion and Jeffrey 4; par 1). Whether globalisation is seen as negative,
positive or a marginal process, the precise interpretation of globalisation will continue to be a
topic of great debate among the supporters, those who oppose or the indifferent.
Globalisation and the Garment Industry
Knutsen explains economic globalisation as the restructuring response of the fordist
mode of mass production (227; par 2) which started in the late 60s and early 70s. The functional
changes in globalisation characteristics were made possible by the electronic industry. It now
became possible to decompose the process of production as well as coordinating and controlling
dispersed economic activities through the changes in technology. A difference exists between
internationalisation and globalisation where the former refers to the dispersion of economic
activities to more than one country while the latter is a more advances form of
internationalisation with functional integration between economic activities that are
internationally dispatched (Knutsen 227; par 3).
The garment industry is one of the oldest industries in the globe. This can be attributed
to the fact that before technological advancement, the industry flourished as it was mostly labour
intensive. The industry has emerged as one of the most significant export-oriented industry,
Name 4

creating job opportunities especially for low skilled workers and generating foreign exchange. Its
labour intensive process of productive is able to accommodate women into the industry who
would previously stay at home (Thee 352; par 1). The textile and garment industry was initially
being controlled by the Multi-Fibre arrangement (MFA) which was an agreement in the textile
and clothing industry. Under this system, the largest garment economies in the world that
included European Union and the US had to restrict their imports in order to protect their
domestic supply (Goto, Kaoru, and John 356; par 2). The MFA system was abolished in 1994
during the Uruguay round of the GATT negotiations. This was to be done through a ten year
transition period until December 2004. From 2005, trade in the garment and textile industry was
integrated into the normal WTO guidelines (Goto, Kaoru, and John 356; par 2). The abolition of
the MFA system provided more competition in the industry as countries could now export
further (Goto, Kaoru, and John 356; par 3).
Globalisation has made it possible for labour to be mobile across the globe. There has
been increased competition for profit making and market share among countries. Thus, labour
has been able to move to the foreign global market making it completely global. This results to
the recomposition of social relations which impacts and directly relates to different economies
(Wong 70; par 1). Globalisation has enabled the growth of garment industry through increased
Name 5

competition, development of infrastructure, communication and transportation. The national
labour movement was also introduced as a result of this (Wong 70; par 1).
In Indonesia, the garment industry emerged in the 1980s was the major export oriented
industry. (Thee 562; par 1). Competition from other developing industries such as China,
Vietnam, Bangladesh and India posed a threat to Indonesias garment industry. The garment
industry in Indonesia is relatively young; after facing some challenges in the first two years of
the Asian economic crisis. The exports have increased slightly since the abolition of the MFA
and the industry is yet to take full advantage (Thee 562; par 1). There is less hope with the
development of this industry in Indonesia but a strong case has been put forth to upgrade and
increase international competitiveness after the expiry of the MFA system. There has been a rise
in minimum wages, increased labour productivity which ensures market competitiveness of the
industry (Thee 576; par 3). Indonesias garment industry should thus shift from the lower end of
the garment market where international competition is severe to up-markets and high quality
garments. This is as a result of the strong international competition facing the industry (Thee 576;
par 4).
Sri Lankas garment industry has also experienced tremendous growth since the
abolition of the MFA. As an export led industry, the growth has been significant to the economy
(Knutsen 243; par 3). This has been made possible by the process of globalisation and
Name 6

regionalisation that has increased its competitive edge in the market. However, this competition
has made the industry face some price vulnerability (Knutsen 246; par 1). Knutsen argues that
government regulations have made it possible for freer trade through economies of scale and
expansion of the market (246; par 2). From 1956 to 1977 there were changes in the production
process as import substitution strategies were in place. Introduction of export orientation and
Export Processing Zones played a significant role in this (Knutsen 235; par 3). Networks were
also formed with the establishment of a buying office which would select the appropriate
suppliers and coordinate the buying process. Businesses could be conducted in EU and the US.
Improved literacy levels and technology advancements played a major role in the growth of the
industry and the production process was enhanced. Most of the competition for Sri Lankas
garment industry came from Mexico, China, and other Sub Saharan Countries (Knutsen 237; par
2-5, 239; par 2).
Garment Manufacturing Industry in China
China is the leading manufacturer and exporter of garments and textiles across the globe
(Goto 355; par 1). Goto, Kaoru, and John also termed it as the archetypical driver of industrial
growth both in developed countries in the past and in most newly industrializing countries more
recently.(355; par 1). It was expected that China would increase its market share at the expense
of its competitors globally as a result of the abolition of MFA which had some export restrictions.
Name 7

However, the integration of the Chinese socialist economy with the global capitalist system has
challenged the labour movements in overcoming divisions within the worldwide working class.
The entry of Chinese workers into the international labour market is perceived more of a threat
than a blessing (Wong 70; par 1). As compared to Sri Lankas and Indonesias garment
industries which are striving to excel and face competition in the market, Chinas garment
industry is faced with several challenges making it decline day by day. The garment industry in
China is the main source of income for Chinas population and approximately 50 per cent of the
population rely on it for survival (Zhang 29; par 1). The garment industry in China however
cannot be as successful as Sri Lankas and Indonesias is anticipated to be because of several
challenges.
Firstly, inadequate and weak capital is a significant challenge. The company owners or
contractors are unable to meet the industry demands because of cash flow problems, inability to
buy sufficient machinery or repair them. This leads to the contraction of work apart from may be
three of four garment firms (Zhang 29; par 4). Secondly, the seasonal nature of work makes the
workload throughout the year to be instable. This is because garment market demand is seasonal
and both manufacturers and jobbers have their own industries and thus make optimal use of their
own production capacity. Consequently, they are only able to offer what garments they are not
able to handle during the peak season to China town contractors in spring. These occasions are
Name 8

not numerous and cannot be guaranteed thus the factory owners have to protect themselves (; 29
par 5).
Another challenge is the issue of inadequate understanding of the industrial practices.
There is general lack of knowledge in the management practices of the firms which are poorly
managed despite their abilities to make profits. Consequently, the industry has faced other
challenges including shortage of skilled workers; this can be attributed to their way of life or the
fact that the physical working conditions do not appear improve peoples lives. Thus, the ones
who can handle the work would just turn away to work for industries that would offer permanent
employment and improved wages. Another problem is the fierce competition they face amongst
themselves making new companies to close down or incur losses. The factory owners underbid
each other while jobbers keep prices very low. There are also conflicts with economic recovery
policies where some feel cutting wages is the solution thus declining workers living standards
and decreasing the minimum wage set by the Economic recovery Act. This leads to increased
discontent among garment workers who thus unite to fight for their rights (Zhang 30; par 1-5)
As much as this crisis continues to affect the industry, the factory owners and workers
tend to blame the white and yellow races contradictions. However, this does not solve the
situation. Zhang suggest two solutions that could be of help (31; par 2). Firstly, contractors
should be able to unite and punish those who lower bids in the market. This will end illegal
Name 9

competition and manipulation done behind the scenes. There should be equal sharing of working
hours and work load as well as consolidating the production equipment to adapt to dynamic
situations. Discipline should be improved and garment prices increased so as to improve the
living conditions of workers. Secondly, garment workers should voluntarily aim to improve their
techniques and skills so as to improve their lives. This can be done through trainings, workshops
and transmission of knowledge amongst themselves. Means of working together and long term
positive and healthy coexistence should be enhanced.
In conclusion, the garment industry has witnessed tremendous growth especially since the
abolition of the MFA in 2004 where export restrictions were terminated. Globalisation has
played a significant massive role in this in terms of improved transportation, communication,
trade and infrastructure. This is evidenced in Sri Lanka and Indonesia. However, China has had
several challenges in the industry like inadequate capital, inadequate skills and competition
among others. This problems need to be addressed for the garment industry to be efficient and
effective. This could be done through unity in the industry and improvements in knowledge and
skills in the practices of the industry. This will lead to better management, increased productivity
and improved living standards of the Chinese.


Name 10

Works cited
Aghion, Philippe, and Jeffrey, Williamson, eds. Growth, inequality, and globalization: theory,
history, and policy. Cambridge University Press, 1998.
Goto, Kenta, Kaoru Natsuda, and John Thoburn. "Meeting the challenge of China: the
Vietnamese garment industry in the post MFA era." Global Networks 11.3 (2011): 355-379.
Knutsen, Hege M. "Globalisation and the garment industry in Sri Lanka." Journal of
Contemporary Asia 33.2 (2003): 225-250.
Thee, Kian Wie. "The development of labour-intensive garment manufacturing in Indonesia."
Journal of Contemporary Asia 39.4 (2009): 562-578.
Wong, Monina. "Chinese workers in the garment industry in Africa: Implications of the contract
labour dispatch system on the international labour movement." TRAVAIL, capital et socit
39.1 (2006).
Zhang Hentang. The Chinese American Garment Industry. Chinese Historical Society of
America (2008): 29-31.