Textile industry in China
They did not fully recover until the 1950s, at which point many of the major tycoons had moved their empires to Hong Kong to avoid persecution, while the rest of the industry was monopolized by the government.
[6] Industry data from the first half of 2013 showed that production from manufacturers with revenue of at least approximately 10 million RMB grew by 13.3%.
The Esquel Group, the largest cotton shirt maker in the world, had plans in 2015 for a 2 billion yuan ($325 million) factory in Guilin, Guangxi.
With the United States joining and taking lead in the TPP in 2008 (withdrawn 23 January 2017 [8]), terms and conditions were created to get an advantage on China, a non-member of the Trans-Pacific Partnership.
[14] Japan’s accession to the TPP is expected to have a substantial negative impact on China’s textile and apparel exports.
[13] In a study conducted by Sheng Lu of the University of Rhode Island, he found that the demand from textiles from Vietnam and other Asian TPP members might create additional export opportunities for China, however with the TPP, the trade diversion effect caused by Japan is expected to affect China’s exports to those regions.
[16] In 2005 the Chinese textile and garment industry received a total of $2.9 billion in FDI most of which came from Hong Kong, Macao, and Taiwan investors.
[17] Private firms in China seek foreign ownership, or FDI to mitigate challenges caused by the Chinese financial system.
Some estimates found that firms in the top 25 percentile of the financial constraint measure could have avoided losing 38.4% of their equity share to foreigners because they needed to obtain FDI.
[17] However, in a study that investigated the impact of FDI presence on the domestic and export sales of textile firms, researchers suggested that the presence of FDI generates positive and significant spillover effects on the domestic as well as export market sales of local firms in textile and manufacturing industries.
[17] In the late 1800s, foreign imports from British India of cotton yarn had created a large market for weavers in the countryside of Northern China.
Foreign interests noticed several key benefits of operating in China, including the vast market, availability of cheap labor and raw materials, longer work hours, and lower transport costs.
Due to the treaty ending the war, foreign entities were able to operate exempt from tariff duties and with fewer political restrictions than native companies.
[20] Since imports of Western manufactured goods stopped during World War I, the cotton industry in both China and Japan developed rapidly to fill the need in Asia.
[3] However, in the 1920s, Japan became the main supplier of machines, and some began to be built in China as well, establishing the textile-machine-tools industry which would eventually grow enough in volume to supply neighboring countries as well.
[20] Furthermore, in Shandong, which is still industrially important today, the Japanese had the advantage of the significant transportation and utilities infrastructure developed by the Germans when they used the city as a port for trade.
When the Japanese arrived in 1914, they were able to use these resources and the local people's knowledge of machinery to very quickly establish seven modern spinning mills.
Areas such as Shantung, Honan, and Wuhan were able to move tons of equipment inland before the Japanese arrived, essentially clearing out existing mills and setting up new ones.
The Japanese were further hindered by the exhaustion of raw materials, scarcity of labor, and marketing difficulties due to nationalistic conflicts.
[13] Even though the industry had taken a big hit, any mills that were not destroyed enjoyed decent profits due to high demand and low supply.
[20] When the Pacific War erupted, the International Settlement came under heavy fire, and British or American registration made factories a target.
In return, the industrialists were required to show public support for the Japanese, and many plant managers joined the control organizations of the puppet government.
[21] Private mills continued to try to grow, but major obstacles included high production costs due to inflation and scarcity of foreign exchange with which to buy raw cotton, machinery, and supplies.
The war had wreaked havoc on the land, and the textile machine tool industry which had been prospering was largely lost.
