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In the March 5, 2007 Textile Manufacturing & Technology newsletter, the point is made that
"Apparel manufactured in China as a commodity item currently returns only 20% of its sale price to the factory. For this and other reasons, the Chinese textile industry would do well to consider building high-end fashion brands. But can a country well known as the textile factory of the world re-invent itself as a manufacturer of high end fashion goods?"
The US and Japan used commodity manufacturing to bootstrap themselves to producing branded goods with higher market value. Manufacture of the abandoned commodity goods was eventually taken over by less developed countries.
In the case of China--because of domestic unemployment concerns, there is no evidence that it will abandon the manufacture of commodity textile goods once it has build up high-end textile production. As a result, third-world textile-manufacturing countries do not stand to benefit from China's move up-scale in the same way that they did form the experiences of Japan and the US.
Question: What will the global economic consequences be--for developed and developing countries--if China succeeds in completely monopolizing the global textile trade?
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