fibre fabrics is highly responsive to income growth. The ranking of income elasticity
estimates also conforms closely to Byron's findings and those of this study's cross-
sectional analysis. In the case of the clothing market, although no additional evidence
was derived from the retail sales data, Byron's earlier findings together with the results of cross-sectional analysis in this study support the view that the income elasticity of demand for wool clothing is high.
CHANGING FIBRE COMPOSITION OF EXPORT PRODUCTS
Owing to trade reform and China's open door pohcy, as well as an international relocation of textile and clothing production activities, exports of textiles and clothing have grown rapidly since 1978. In 1992, the total value of textiles and clothing reached US$24 billion {Far Eastern Economic Review 4 February 1993, p. 55), almost nine times the value in 1978. The share of exported fibres in total domestic production of textiles and clothing rose from 16 per cent in 1980 to 34 per cent in 1990 (Kong 1992).
China's exports of textiles and clothing have expanded more rapidly in value than in quantity terms. During 1981-89, while the total value of textile and clothing exports increased by 188 per cent, the quantity of fibres contained in those exports increased by only 87.5 per cent. This means that less fibre is now used for every US dollar earned from textile and clothing exports.
In 1989, China exported a total of 2.4 million tons of textiles and clothing, compared with 1.28 million tons in 1981 (Table 3.6). One interesting feature of China's exports of textiles and clothing has been the heavy dependence on natural fibres. In 1989, natural fibres (cotton, wool and other natural fibres) accounted for about 70 per cent of total textile and clothing exports, with the remaining 30 per cent being taken up by chemical fibres. The dominant natural fibre was cotton, which had a market share of 57.6 per cent in 1989; this share has been increasing since 1981 mainly at the expense of the
'other' fibres category. The market share of wool has remained relatively stable
The fastest growing area of China's textile and clothing exports has been clothing products. Exports of fibres in the form of clothing products increased 211 per cent from 1981 to 1989. This accords with the general assertion that as the clothing industry is labour intensive, it is subject to higher growth if a country is well endowed with labour resources. However, in this prosperous and expanding market, wool's market share
Table 3.6 Fibre Composition of Export Products, 1981 and 1989
1981 1989 % change
(1989/1981)
Textiles, total (000 tons) 1,075.77 1,767.39 +64.5
Cotton 49.9 56.6
Wool 1.4 1.7
Chemical fibres 25.5 27.5
Other (silk, flax, ramie and jute) 23.2 14.2
Yarns (000 tons) 268.69 406.66 +51.3
Cotton 64.0 45.9
Wool 0.6 2.6
Chemical fibres (including blends) 13.8 29.3 Other (silk, flax, ramie and jute) 21.6 22.2
Fabrics (000 tons) 493.80 838.02 +69.7
Cotton 58.6 58.5
Wool 0.7 0.4
Chemical fibres (including blends) 36.6 35.9
Other (silk, flax, ramie and jute) 4.1 5.2
Textiles for home and industrial use 313.28 524.71 +67.5 (000 tons)
Cotton 24.1 61.7
Wool 3.2 2.9
Chemical fibres (including blends) 18.2 13.0 Other (silk, flax, ramie and jute) 54.5 22.4
Clothing, total (000 tons) 200.99 625.96 +211.4
Cotton 49.8 60.5
Wool 3.8 2.6
Chemical fibres (including blends) 44.8 34.7
Other (silk, flax, ramie and jute) 1.6 2.2
Clothing, woven (000 tons) 94.76 286.83 +202.7
Cotton 63.3 50.5
Wool 0.9 2.5
Chemical fibres (including blends) 32.5 42.5
Other (silk, flax, ramie and jute) 3.3 4.5
Clothing, knitted (000 tons) 78.07 285.20 +265.3
Cotton 61.1 76.4
Wool 9.6 3.3
Chemical fibres (including blends) 29.0 19.9
Other (silk, flax, ramie and jute) 0.3 0.4
Other clothing (000 tons) 28.17 53.93 +91.4
Fibre products, total (000 tons) 1,276.76 2,393.35 +87.5
Cotton 49.9 57.6
Wool 1.8 1.9
Chemical fibres (including blends) 28.7 29.5 Other (silk, flax, ramie and jute) 19.6 11.0
dropped by 1.2 per cent, a quite significant percentage considering wool is a minor fibre. The main source of decline seems to have been in the knitted clothing market, where the market share of wool fell from 9.6 per cent to 3.3 per cent. The increase in the market share of wool in the woven clothing market has not been strong enough to compensate for this dechne.
The export market share of cotton clothing grew, mainly at the expense of chemical fibres. The chief source of growth has been the knitted clothing market. In the woven clothing market, cotton's market share actually fell.
China's textile exports grew at a much slower rate than its clothing exports. In 1989, China exported 1.77 million tons equivalent of textile products, compared with 1.07 million tons in 1981. The market share of wool in the textile market improved shghtly from 1981 to 1989. The increase in the market share of cotton was mainly at the expense of the 'other' category of fibres.
Within the textile market, the submarkets of fabrics and textiles for home and industrial use grew at a relatively faster pace than the submarket for yarns. Wool again performed relatively poorly in the former two submarkets, although its market share in the yarns market increased by a good 2 percentage points.
As argued previously, changes in fibre composition in the export market depend largely on the relative competitiveness of specific sectors of the Chinese textile industry. Strong compedtiveness in a particular product line could create demand for these products and squeeze the market share of competitors. One of the most important determinants of competitiveness in the textile industry is the intensity of labour use. Findlay and Li (1992) found that in China the cotton textile industry is more labour intensive than the wool textile industry. This explains in part why the export performance of the former is better than that of the latter.
The availability of cheap raw materials is another important determinant of competitiveness. During the 1980s, success in securing increased cotton production as a result of rural economic reform greatly facihtated the development of the Chinese cotton textile industry and also its export activities. The wool textile industry, on the other hand.