The China and Hong Kong Denim Industry | Y.LI, L.YAO and K.W.YEUNG


The China and Hong Kong Denim Industry
The China and Hong Kong Denim Industry


Yarn Manufacturing in China
Production capacity
Rotor spinning and ring spinning production
Denim yarn consumption
Production by region
Political and strategic significance of denim yarn manufacturing
Denim Fabric Manufacturing in China
Production capacity
The market
Major products
The main uses of denim fabric in the domestic market
Production by region
Sales by region
The costs of machinery
Raw material quality control
3.10 Technology development
4 China Denim Apparel Industry
4.1 Production
4.2 Markets
Production of major denim products
Sales of major denim products
Production and sales by region
Industrial development and management implications
5 Distribution Channels in China
5.1 Introduction to marketing channels
5.2 Distribution channels in China
5.3 Development and management implications
6.1 Introduction
6.2 Strengths
6.3 Weaknesses
6.4 Opportunities
6.5 Threats
SWOT Analysis for the Chinese Denim Industry
7 Five-forces Competitive Analysis
7.1 Porter’s five-forces model
7.2 Threat of entry
7.4 Pressure from substitute products
7.5 Bargaining power of buyers
7.6 Bargaining power of suppliers
Intensity of rivalry among existing competitors
8 Toandsustainabe CoIllpetitiveness of~’s’IPxtileand Clothing7~7
8.2 Sustainable competitiveness of the TC industry 78
8.4 Simulation results and discussions 81
8.5 China’s textile and clothing industry and WTO 83  
Summary 84
References 85
8.1 Introduction 77
8.3 Development of simulation model 79
9.1 Introduction
9.2 History
The Hong Kong Denim Industry
10 Denim Products lkade
10.1 Introduction
10.2 Exports
10.3 Re-exports
10.4 Imports
11 Industrial Environment
1 1.1 The Hong Kong economy
1 1.2 Manufacturing costs
11.3 Infrastructure
1 1.4 Institutions
11.5 Foreign trade systems
1 1.6 Government policies
12.1 Strengths
12.2 Weaknesses
12.3 Opportunities
12.4 Threats
SWOT Analysis for the Hong Kong Denim Industry
13.1 Hong Kong textile and apparel industries
13.2 Hong Kong garments cluster
13.3 Textile and clothing industry developing stages model
13.4 Hong Kong fashion cluster development
13.5 Strategy
Strategy for the Hong Kong Textile and Clothing Industry

We would like to thank The Hong Kong Polytechnic University for funding this research through the Area of Strategic Development: “Fashion” Design and Technology Innovation’’.

1 Introduction
The denim industry in China has developed since the 1980s and China is now an important producer of denim. Extensive research into the capacity, market, and geographic distribution of China’s denim industry, has been carried out by the Hong Kong Polytechnic University in collaboration with the All China Marketing Research Company, which is associated with the China Statistical Bureau [ 13.

There are more than 1,000 manufacturers of yam, fabric and garments in-bke- Chinese denim industry, and they consumed about 5 per cent of total world cotton. In 1997, 712,000 tons of denim yarn, 0.9 billion metres (1.3 billion square metres) of denim fabrics and 101 million Units of denim apparel were produced. Chinese denim exports have decreased in the past few years. Denim fabric exports fell from 757 million metres in 1995 to 420 million metres in 1997, and denim apparel exports decreased from 65 million units to 35 million units in the same period. On the other hand, the domestic market grew sharply over this period. Denim apparel has become a major product line in the Chinese clothing market.

Chinese denim fabric and apparel manufacturers are mainly located in the coastal areas. Guangdong Province is the most important denim product manufacturing base, where more than 90 denim fabric manufacturers and 190 denim apparel manufacturers are located. About a quarter of all Chinese denim fabric and more than half of the denim apparel output came from Guangdong Province.

The Chinese denim industry has a huge labor force and relatively low labor costs compared with other major denim manufacturing countries. For example, the labor costs in the textile sector in 1996 were US$25 per hour in Belgium, US$ 16.7 in Italy, US$12.3 in USA, US$4.9 in Hong Kong, US$2.02 in Turkey and US$1.52 in Mexico, compared to US $0.58 per hour in China and US$0.56 in India (Almanac of China’s Textile Industry, 1996). However, the industry also has weaknesses in terms of backward technology, and is facing strong competition from other developing countries. On the other hand, Chinese denim industry has good opportunities arising from the huge and growing domestic market within China itself.

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