Is the Chinese Textile Industry a Threat for Europe?
Is Chinese Textile Industry a threat for Europe?
Introduction
"Napoleon said of China "Let China sleep, for when she wakes, she will shake the world." This assumption turned out to be true, particularly these two last decades. As a matter of fact, China has undergone two restructuring processes: the industrialization and the transition from a centrally planned to a market economy since the early 1980 's. Thus, Chinese government has been implementing an economic reform to reinforce its rapid growth. China is now awake and is already a major actor of the world economy, widely open to the world. It has reduced its trade barriers and has managed to attract huge foreign direct investments thanks to which China could improve its competitiveness.
There is a particular area in which China has become a leader: the textile industry. After the end of the Multifibre Arrangement, China 's textile exports rose astonishingly. China 's share of the US$350 billion global textile market is expected to rise from its current 20 percent to a maximum of 60 percent in the coming years. Indeed thanks to its low-wages, China became the place where western textile companies outsource their production. Now China 's success lead European firms to wonder how to remain competitive. How to face the big Chinese competitor? This paper aims at dealing with the textile issue. First we will deal with the Chinese openness to the world especially through its WTO membership and the consequences of the end of the Multifibre Agreement on the Chinese textile. Then, we will analyze the Chinese textile industry and see why China is getting so huge benefits from this sector. Finally, we will conclude by asking ourselves whether China is truly a threat for Europe.
I the Consequences of China 's Openness to the World on its Textile Industry
The accession of China to the World Trade Organization
After almost fifteen years of negotiations between China and The World Trade Organization (WTO), an
Introduction
"Napoleon said of China "Let China sleep, for when she wakes, she will shake the world." This assumption turned out to be true, particularly these two last decades. As a matter of fact, China has undergone two restructuring processes: the industrialization and the transition from a centrally planned to a market economy since the early 1980 's. Thus, Chinese government has been implementing an economic reform to reinforce its rapid growth. China is now awake and is already a major actor of the world economy, widely open to the world. It has reduced its trade barriers and has managed to attract huge foreign direct investments thanks to which China could improve its competitiveness.
There is a particular area in which China has become a leader: the textile industry. After the end of the Multifibre Arrangement, China 's textile exports rose astonishingly. China 's share of the US$350 billion global textile market is expected to rise from its current 20 percent to a maximum of 60 percent in the coming years. Indeed thanks to its low-wages, China became the place where western textile companies outsource their production. Now China 's success lead European firms to wonder how to remain competitive. How to face the big Chinese competitor? This paper aims at dealing with the textile issue. First we will deal with the Chinese openness to the world especially through its WTO membership and the consequences of the end of the Multifibre Agreement on the Chinese textile. Then, we will analyze the Chinese textile industry and see why China is getting so huge benefits from this sector. Finally, we will conclude by asking ourselves whether China is truly a threat for Europe.
I the Consequences of China 's Openness to the World on its Textile Industry
The accession of China to the World Trade Organization
After almost fifteen years of negotiations between China and The World Trade Organization (WTO), an
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