Upgrading and restructuring in the global apparel value chain: why China and Asia are outperforming Mexico and Central America

Abstract

This article uses the global value chain approach to analyse the upgrading trajectories of leading apparel exporters adapting to the end of textile and apparel quotas and the economic recession. These events have been coupled by the consolidation and reconfiguration of global supply chains. China has been the big winner while other Asian suppliers are expanding their roles, largely at the expense of regional suppliers. One key to Asia's competitive success vis-à-vis Mexico and Central America has been end market diversification. Regional trade agreements (NAFTA; DR-CAFTA) have provided the latter with preferential access to the US market and ties to brand manufacturers, but they also created a reliance on US exports and have hindered suppliers from developing regional linkages into textile production, apparel design and branding. Growing apparel demand in emerging Asian economies and a regionally integrated production network has allowed Chinese apparel suppliers to upgrade and expand global market share.

Global value chains in a post-Washington Consensus world

“…US hegemony was eroding and the large emerging economies, led by China and India, were altering the organization of production and how rules were made that affected the global economy. Consolidation was growing at both the country and supply chain levels in a number of hallmark global industries, such as apparel (Frederick and Gereffi, 2011;Staritz and Frederick, 2012), automobiles (Sturgeon et al, 2008;Sturgeon and Van Biesebroeck, 2011) and electronics (Sturgeon and Kawakami, 2011;Brandt and Thun, 2011). When the global economic recession hit in 2008-09, this ended all prospects of a return to the old order.…”

The Integrated Approach for Sustainable Performance Evaluation in Value Chain of Vietnam Textile and Apparel Industry

“…Federick and Gereffi (2011) proved that China has been a winner, while other Asian suppliers are still struggling to expand the linkage into textile manufacturing, garment design and branding strategy [21]. Teng and Jaramillo (2005) have developed five main clusters to reflect the performance of a global supplier in the supply chain of textile and apparel industry based on evaluation method to decrease costs and increase competitiveness for companies [22].…”

Stitches to Riches?: Apparel Employment, Trade, and Economic Development in South Asia

“…China's apparel industry also takes advantage of scale economies within firms (large, vertical factories with all supply chain sectors and value-adding activities in one place) and through product/cluster-specific supply-chain cities that specialize in the production of one product (Frederick & Gereffi 2011). …”