2. Apparel Industry: China “The Sleeping Dragon” By: Amanda LaConte Kate McElroy Brian Morris

3. History of Multi-fiber Agreement (MFA) 1974: Replaced Long Term Agreement (LTA)  Extended coverage to wool & manmade fibers and imposed a growth rate on quotas 1994: MFA Expired  US imposed quotas on developing country exports 1995: MFA replaced by Agreement on Textiles and Clothing (ATC)  Increased quota growth rates so remaining quotas would be phased out by 2005 2004: US imposed a higher number of binding quotas on China  China: 31/87 binding quota restrictions  Thailand: 1/46 binding quota restrictions

4. Trends in U.S. Imports from China, 1990-2005 The effects of China joining the WTO with the removal several quotas Restrictions placed on Chinese exports

5. Impacts of Quota phase-out in 2005 Consumers in importing countries “benefit”  Cheaper prices and more choices Producers in importing countries “lose”  Can not compete with the cheaper prices Globalization increases trade worldwide with integration of apparel textiles trade Foreign Investment flows out of previously-unrestricted countries to previously-restricted ones  Smaller developing countries suffer

6. U.S. Trade with China over the Years Annual Growth Rate 1990-20002000-2005 21%19% YearFuture Imports 2010592,631 20203,511,477 203020,806,314 2040123,282,242 2050730,475,905 What will the Future hold for the US? Figures are in millions of US dollars

7. US $ YEAR 200420052006 Apparel Cotton Apparel Wool Apparel Man-made Fiber Apparel PRICE OF CHINESE APPAREL IMPORTS 5 10 15

8. United States is China’s #1 Customer

10. Population (Millions) % of Pop Employed in Apparel Bangladesh 1431.3% China 1,3000.4% India 1,1000.4% Pakistan 1510.5% Sri Lanka 191.8% Thailand 621.4% Vietnam 822.4%

12. China’s Manufacturing Industry Four Main Categories in China’s Manufacturing Industry Ratio of Employees per Corporation is significantly higher for the Apparel Industry However, this table does NOT display the number of Establishments per Corporation One of China’s main focus in manufacturing involves more workers and corporations in the Apparel Industry

13. Revenue of Industrial Corporations The Manufacturing Industry generates the greatest amount of revenue from sales and customer activities. Mining and Quarrying Manufacturing Electricity, Gas and Water Supply and Production 13% Food and Agriculture 20% Apparel 19% Industrial Goods 48% Equipment Breakdown of the Manufacturing Industry :

14. Employees

15. China’s Competitive Advantage Large, highly productive, low cost labor force Price competitiveness Efficient port facilities  China’s shipping time to the US “12-18 days”

16. “With Quotas gone and Chinese goods setting the market’s price floor, those who cannot compete on price are marching to a familiar anthem…” Quality Quick Return  need a steady delivery of finished goods  focus on supply chain management Customer Service

17. Globalization has altered the Dynamics of the Apparel Industry. IT’S TIME WE TAKE NOTICE Made in China