Estimation Of International Market Power Practiced By China's Textile And Apparel Exports And Ways Of Enhancing

With the development of globalization, foreign trade is playing a more and more important role in the national economic growth. Countries are no longer in pursuit of export quantities only, but begin to focus on enhancing the international market power of exports. Market power is a kind of capability of practicing mark-up over marginal cost in the condition of imperfect competition. In this thesis, using the panel data that is subject to some extension, we have estimated the market power practiced by China's exports of representative apparel as an example. Based on the previous study, we have made an analysis of the discrepancy between the potential market power and real market power faced by China's exports of apparel by introducing four factors. Accordingly, we propose some suggestions for enhancing the international market power practiced by China's textile and apparel exports.In the estimation part, based on the industry as a whole, we have found China's apparel industry practices a high degree of market power in the main destination markets. And it practices a higher degree of market power in the EU market than it does in the USA. Since China's entering into WTO, our potential market power of exports is growing steadily. Especially after 2005, when the export quota of textile and apparel is abolished, the market power has increased obviously.Based on the above study, we have made an analysis of the reason for the discrepancy between potential and real market power. We have drawn conclusions that export market structure, economic scale, cost and technology innovation are four factors that affect the international market power, and economic scale is the most significant factor. So the most important reason for discrepancy is the typical dualistic economy existing in China's textile and apparel industry. In the end, we have proposed some suggestions, such as carrying out assets reorganization and collectivization to enhance market share of concentration; making an all-around improvement in productivity to consolidate and intensify the original comparative advantage in labor-intensive industry; attaching more importance to technological innovation to create product brands; establishing perfect fiscal system to support textile and apparel exports etc.