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ERD WORKING PAPER SERIES NO.

5
ECONOMICS AND RESEARCH DEPARTMENT

The International Competitiveness of Asian Economies in the Apparel Commodity Chain

Gary Gereffi

February 2002

Asian Development Bank

ERD Working Paper No. 5

THE INTERNATIONAL COMPETITIVENESS OF ASIAN ECONOMIES IN THE APPAREL COMMODITY CHAIN

Gary Gereffi

February 2002

Gary Gereffi is a professor of sociology at Duke University. This paper was prepared for RETA 5875: International Competitiveness of Asian Economies: A Cross-country Study.

Asian Development Bank P.O. Box 789 0980 Manila Philippines 2002 by Asian Development Bank February 2002 ISSN 1655-5252 The views expressed in this paper are those of the author(s) and do not necessarily reflect the views or policies of the Asian Development Bank.

Foreword
The ERD Working Paper Series is a forum for ongoing and recently completed research and policy studies undertaken in the Asian Development Bank or on its behalf. The Series is a quick-disseminating, informal publication meant to stimulate discussion and elicit feedback. Papers published under this Series could subsequently be revised for publication as articles in professional journals or chapters in books.

Contents
I. II. III. The Apparel Commodity Chain Big Buyers and Global Sourcing The Asian Connection in the Apparel Commodity Chain A. Shifting Patterns of Asian Competitiveness: American, European, and Japanese Variations in Apparel Sourcing Regional Divisions of Labor in Asia: A Commodity Chains Interpretation Industrial Upgrading in Asias Apparel Commodity Chain A. Triangle Manufacturing and the Internationalization of Asian Production Networks B. Upgrading Within the Chain: The Export Shift from Apparel to Textiles and Fibers Conclusion References 3 6 9

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IV.

20 22 23 28 31 32

V.

VI.

pparel is one of the oldest and largest export industries in the world. Most nations produce for the international textile and apparel market (Dickerson 1995, 6), making this one of the most global of all industries. Apparel is the typical starter industry for countries engaged in export-oriented industrialization, and played the leading role in East Asias early export growth. Many questions have been raised, however, concerning the degree to which international trade can be the fulcrum for sustained economic growth for developing nations. Under what conditions can trade-based growth become a vehicle for genuine industrial upgrading, given the frequent criticisms made of low-wage, low-skill, assembly-oriented export activities? Do Asias accomplishments in trade-led industrialization contain significant lessons for other regions of the world? This paper addresses these and related questions using a global commodity chains framework. A commodity chain refers to the whole range of activities involved in the design, production, and marketing of a product. A critical distinction in this approach is between buyerdriven and producer-driven commodity chains. Japan in the 1950s and 1960s, the East Asian newly industrializing economies (NIEs) during the 1970s and 1980s, and Peoples Republic of China (PRC) in the 1990s became world-class exporters primarily by mastering the dynamics of buyer-driven commodity chains, which supply a wide range of labor-intensive consumer products such as apparel, footwear, toys, and sporting goods. The key to success in East Asias buyer-driven chains was to move from the mere assembly of imported inputs (traditionally associated with export processing zones) to a more domestically integrated and higher value-added form of exporting known alternatively as full-package supply or OEM (original equipment manufacturing) production.1 Subsequently, Japan and some firms in the East Asian NIEs pushed beyond the OEM export role to original brand name manufacturing (OBM) by joining their production expertise with the design and sale of their own branded merchandise in domestic and overseas markets. Apparel thus embodies two contrasting production systems characteristic of buyer-driven chains: the assembly and the OEM models. Whereas the assembly model is a form of industrial subcontracting in which manufacturers provide the parts for simple assembly to garment sewing plants, the OEM model is a form of commercial subcontracting in which the buyer-seller linkage between foreign merchants and domestic manufacturers allows for a greater degree of local learning about the upstream and downstream segments of the apparel chain.
1

Throughout this report, OEM production, specification contracting, and full-package supply will be used as broadly synonymous terms. In addition, assembly, production sharing, and outward processing refer to similar processes, even though a specific term may be favored in a particular region.

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From a global commodity chains perspective, East Asias transition from assembly to fullpackage supply derives in large measure from its ability to establish close linkages with a diverse array of lead firms in buyer-driven chains. Lead firms are the primary sources of material inputs, technology transfer, and knowledge in these organizational networks. In the apparel commodity chain, different types of lead firms use different networks and source from different parts of the world. Retailers and marketers tend to rely on full-package sourcing networks, in which they buy readymade apparel primarily from Asia, where manufacturers in places like Hong Kong, China; Republic of Korea (henceforth Korea); and Taipei,China have historically specialized in this kind of production. As wage levels in those economies have gone up, East Asian manufacturers have tended to develop multilayered global sourcing networks where low-wage assembly can be done in other parts of Africa, Asia, and Latin America, while the NIE manufacturers play a critical coordinating role in the full-package production process. Branded manufacturers, by contrast, tend to create production networks that focus on apparel assembly using imported inputs. Whereas full-package sourcing networks are generally global, production networks established by branded manufacturers are predominantly regional. Manufacturers in the United States (US) go to Mexico and the Caribbean Basin; European Union (EU) firms look to North Africa and eastern Europe; and Japan and the East Asian NIEs look to lower-wage regions within Asia. The organization of this paper is as follows. In the first section, the global commodity chains framework will be outlined, with an emphasis on the structure and dynamics of buyerdriven chains. In the second section, each of the big buyers (retailers, marketers, and manufacturers) involved in global sourcing networks in the apparel commodity chain will be highlighted. The third section will assess the role of Asian exporters in the distinct apparel sourcing configurations that characterize North America, Europe, and Japan. Asian sourcing to each region has moved beyond assembly production to the full-package model, but in North America and Europe strong competition is emerging from nearby low-cost suppliers that are establishing regionally integrated apparel supply chains. The Japanese pattern of apparel sourcing, in contrast to the American and European patterns, is highly concentrated in a few suppliers, and the differences will be traced to trade policy. In the fourth section, overlapping regional divisions of labor in Asia that put nations on different industrial upgrading trajectories are explored. The fifth section of the paper identifies several main upgrading approaches in apparel. Industrial upgrading in the Asian context involves the process of building, extending, coordinating, and completing international production and trade networks. These networks are resilient forms of social capital that are a valuable competitive asset in the global economy. However, the East Asian NIEs have had to develop new strategies for upgrading within the apparel commodity chain to maintain a leadership role. The final section of the report will offer conclusions regarding upgrading options within the global apparel industry.

Section I The Apparel Commodity Chain

I.

The Apparel Commodity Chain

In global capitalism, economic activity is not only international in scope, it is also global in organization. Internationalization refers to the geographic spread of economic activities across national boundaries. As such, it is not a new phenomenon. Indeed, it has been a prominent feature of the world economy since at least the 17th century when colonial empires began to carve up the globe in search of raw materials and new markets for their manufactured exports. Globalization is much more recent than internationalization because it implies functional integration between internationally dispersed activities. Globalization has been promoted by industrial and commercial firms alike, which have established two distinct types of international economic networks that have been called producerdriven and buyer-driven global commodity chains, respectively (Gereffi 1994a, 1999). A commodity chain refers to the whole range of activities involved in the design, production, and marketing of a product (see Gereffi and Korzeniewicz 1994 for an overview of this framework). Producer-driven commodity chains are those in which large, usually transnational, manufacturers play the central roles in coordinating production networks (including their backward and forward linkages). This is characteristic of capital- and technology-intensive industries such as automobiles, aircraft, computers, semiconductors, and heavy machinery. Buyer-driven commodity chains, on the other hand, refer to those industries in which large retailers, marketers, and branded manufacturers play the pivotal roles in setting up decentralized production networks in a variety of exporting countries, typically located in the third world. This pattern of trade-led industrialization has become common in labor-intensive, consumer goods industries such as garments, footwear, toys, handicrafts, and consumer electronics. Tiered networks of Third World contractors that make finished goods for foreign buyers carry out production. Large retailers or marketers that order the goods supply the specifications. Firms that fit the buyer-driven model, including retailers like Wal-Mart, Sears Roebuck, and J.C. Penney; athletic footwear companies like Nike and Reebok; and fashion-oriented apparel companies like Liz Claiborne, The Gap, and The Limited, generally design and/or marketbut do not makethe branded products they order. They are manufacturers without factories that separate the physical production of goods from the design and marketing stages of the production process. Profits in buyer-driven chains derive not from scale, volume, and technological advances as in producer-driven chains, but rather from unique combinations of high-value research, design, sales, marketing, and financial services that allow the retailers, designers, and marketers to act as strategic brokers in linking overseas factories and traders with evolving product niches in their main consumer markets (Gereffi 1994a). Profitability is greatest in the relatively concentrated segments of global commodity chains characterized by high barriers to the entry of new firms. In producer-driven chains, manufacturers making advanced products like aircraft, automobiles, and computers are the key economic agents not only in terms of their earnings, but also in their ability to exert control over backward linkages with raw material and component suppliers, and forward linkages into distribution and retailing.

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The lead firms in producer-driven chains usually belong to international oligopolies. Buyer-driven commodity chains, by contrast, are characterized by highly competitive and globally decentralized factory systems with low barriers to entry in production.2 The companies that develop and sell brand-named products exert substantial control over how, when, and where manufacturing will take place, and how much profit accrues at each stage of the chain. Thus, whereas producerdriven commodity chains are controlled by large manufacturers at the point of production, the main leverage in buyer-driven industries is exercised by marketers and merchandisers at the design and retail ends of the chain.3 The apparel industry is an ideal case for examining the dynamics of buyer-driven commodity chains. The relative ease of setting up apparel firms, coupled with the prevalence of developed country protectionism in this sector, has led to the unparalleled diversity of garment exporters in the Third World. Furthermore, the backward and forward linkages from garment production are extensive, and help to account for the large number of jobs associated with a flourishing apparel industry (see Appelbaum, Smith, and Christerson 1994). The apparel commodity chain is organized around five main segments: raw material supply, including natural and synthetic fibers; provision of components, such as yarns and fabrics manufactured by textile companies; production networks made up of garment factories, including their domestic and overseas subcontractors; export channels established by trade intermediaries; and marketing networks at the retail level (see Figure 1). Each of these segments in the apparel commodity chain encompasses a variety of differences in terms of factors such as geographical location, labor skills and conditions, technology, and scale and type of enterprises. These characteristics also affect the distribution of power and profits throughout the commodity chain. In the apparel commodity chain, entry barriers are low for most garment factories, although progressively higher as one moves upstream to textiles and fibers; brand names and stores are alternative competitive assets firms can use to generate significant economic rents. The lavish advertising budgets and promotional campaigns required to create and sustain global brands, and the sophisticated and costly information technologies employed by todays mega-retailers to develop quick response programs that increase revenues and lower risks by getting suppliers to manage inventory (Abernathy et al. 1999), illustrate recent techniques that have allowed retailers and marketers to displace traditional manufacturers as the leaders in many consumer goods industries.

In intermediate products where scale is critical, such as steel and cement, there are high barriers to entry in production. Because marketing tends to be relatively unimportant in these industries, firms generally are vertically integrated. Buyer-driven chains have also penetrated the computer industry. Dell Computer Corporation pioneered a new business model that radically substitutes pull for push in its production paradigm. Bypassing the small computer dealerships and discount or specialist retailers, Dell sells its personal computers directly to consumers. Dells Internet site, which accounts for up to half of its transactions, offers more than 10 million computer configurations (Gereffi 2001, 1632 and fn. 8).

Figure 1. The Apparel Commodity Chain TEXTILE COMPANIES


North America US Garment Factories (designing, cutting, sewing, buttonholing, ironing) Yarn (Spinning) Domestic and Mexican/Caribbean Basin Subcontractors Mass Merchandise Chains Asia Petrochemicals Synthetic Fibers Asian Garment Contractors Overseas Buying Offices Discount Chains (weaving, knitting, finishing) Fabric All Retail Outlets Department Stores

APPAREL MANUFACTURERS

RETAIL OUTLETS

Natural Fibers

Cotton, Wool, Silk, etc.

Brand-named Apparel Companies

Specialty Stores

Synthetic Fibers

Oil, Natural Gas

Domestic and Overseas Subcontractors

Trading Companies

All Retail Outlets

Off-Price, Factory Outlet, Mail Order Others

RAW MATERIAL NETWORKS

COMPONENT NETWORKS

PRODUCTION NETWORKS

EXPORT NETWORKS

MARKETING NETWORKS

Section I The Apparel Commodity Chain

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One of the major hypotheses of the global commodity chains approach is that development requires linking up with the most significant lead firms in an industry. These lead firms are not necessarily the traditional vertically integrated manufacturers, nor do they even need to be involved in making finished products. They can be located upstream or downstream from manufacturing (such as the fashion designers or private label retailers in apparel), or they can be involved in the supply of critical components (such as microprocessor companies like Intel and software firms like Microsoft in the computer industry). What distinguishes lead firms from their followers or subordinates is that they control access to major resources (such as product design, new technologies, brand names, or consumer demand) that generate the most profitable returns in the industry.

II.

Big Buyers and Global Sourcing

A fundamental restructuring is under way in the retail sector in the US and other developed economies. The global retailing industry is dominated by large organizations that are moving toward greater specialization by product (the rise of specialty stores that sell only one item, such as clothes, shoes, or office supplies) and price (the growth of high-volume, low-cost discount chains). Furthermore, the process of filling the distribution pipeline is leading these retailers to develop strong ties with global suppliers, particularly in low-cost countries (Management Horizons 1993). Nowhere are these changes more visible than in apparel, which is the top merchandise category for most consumer goods retailers. Between 1987 and 1991, the five largest softgoods chains in the US increased their share of the national apparel market from 35 to 45 percent (Dickerson 1995, 452). By 1995, the five largest US retailersWal-Mart, Sears, Kmart, Dayton Hudson,4 and JC Penneyaccounted for 68 percent of all apparel sales in publicly held retail outlets. The next top 24 retailers, all billion dollar corporations, represented an additional 30 percent of these sales (Finnie 1996, 22). The two top discount giants, Wal-Mart and Kmart, by themselves control one quarter of all apparel (by unit volume, not value) sold in the US. Although the degree of market power that is concentrated in large US retailers may be extreme, owing to the recent spate of mergers and acquisitions in this sector, a similar shift in power from manufacturers to retailers and marketers appears to be under way in most developed nations. Retailing across the European Union (EU) has been marked by substantial concentration in recent years. In Germany, the five largest clothing retailers (C&A, Quelle, Metro/Kaufhof, Kardstadt, and Otto) in 1992 accounted for 28 percent of the EUs largest national economy, while the United Kingdoms (UK) two top clothing retailers (Marks & Spencer and the Burton Group) controlled over 25 percent of the UK market in 1994 (OETH 1995, 11-13). Marks & Spencer, Britains largest and most successful retailing firm with over 260 stores in the UK plus stores

Dayton Hudson Corporation owns Target, Mervyns, Daytons, Hudsons, and Marshall Field.

Section II Big Buyers and Global Sourcing

in other parts of Canada and Europe, itself buys about 20 percent of all the clothing made in Britain (Dickerson 1995, 472). In both France and Italy, the role of independent retailers in the clothing market has declined since 1985, while the share of specialty chains, franchise networks, and hypermarkets is rising rapidly. In Japan, the 1992 revision of the Large Retail Store Law, which liberalized restrictions on the opening of new retail outlets, has caused a rapid increase in the number of large-volume retailers and suburban chain stores. The Japanese government predicts there will be 20 percent fewer retailers in Japan in the year 2000 than in 1985, mainly due to attrition among the small and medium retail stores (Japan Textile News 1996). From the vantage point of buyer-driven commodity chains, the major significance of growing retailer concentration is its tendency to augment global sourcing. As each type of organizational buyer in the apparel commodity chain has become more actively involved in offshore sourcing, the competition between retailers, marketers, and manufacturers has intensified, leading to a blurring of the traditional boundaries between these firms and a realignment of interests within the chain. Retailers. In the past, retailers were the apparel manufacturers main customers, but now they are increasingly becoming their competitors. As consumers demand better value, retailers have increasingly turned to imports. In 1975, only 12 percent of the apparel sold by US retailers was imported; by 1984, retail stores had doubled their use of imported garments (AAMA 1984). According to unpublished data from the US Customs Services Net Import File, retailers accounted for 48 percent of the total value of imports of the top 100 US apparel importers in 1993 (who collectively represent about one quarter of all 1993 apparel imports). US apparel marketers, which perform the design and marketing functions but contract out the actual production of apparel to foreign or domestic sources, represented 22 percent of the value of these imports; and domestic producers made up an additional 20 percent of the total5 (Jones 1995, 25-26). The picture in Europe is strikingly similar. European retailers account for fully one half of all apparel imports, and marketers or designers add roughly another 20 percent (Scheffer 1994, 11-12). In the 1980s, many retailers began to compete directly with the national brand names of apparel producers and marketers by expanding their sourcing of private label (or store-brand) merchandise. This is sold more cheaply than the national brands but it also is more profitable to the retailers since they eliminate some of the middlemen in the chain. Private label programs have led a growing number of merchants to take on the entrepreneurial functions of normal apparel manufacturers, such as product design, fabric selection and procurement, and garment production or sourcing. Private label goods, which constituted about 25 percent of the total US apparel market in 1993 (Dickerson 1995, 460), can curtail the business of both manufacturers and well-known designer lines.

These figures do not include the production sharing activities of US apparel firms in Mexico and in the Caribbean Basin, which also have been expanding very rapidly (USITC 1997).

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Branded Marketers. One of the most notable features of buyer-driven chains is the creation since the mid-1970s of prominent marketers whose brands are extremely well known, but that carry out no production whatsoever. These manufacturers without factories include companies like Liz Claiborne, Nike, and Reebok, which literally were born global since their sourcing has always been done overseas. As pioneers in global sourcing, branded marketers were instrumental in providing overseas suppliers with knowledge that later allowed them to upgrade their position in the apparel chain. In order to deal with the influx of new competition, branded marketers have adopted several strategic responses that will alter the content and scope of their global sourcing networks: they are discontinuing certain support functions (such as pattern grading, marker making, and sample making), and reassigning them to contractors. They are also instructing the contractors where to obtain needed components, thus reducing their own purchase and redistribution activities. They are shrinking their supply chains, using fewer but more capable manufacturers; are adopting more stringent vendor certification systems to improve performance; and are shifting the geography of their sourcing configuration from Asia to the western hemisphere. In essence, marketers now recognize that overseas contractors have the capability to manage all aspects of the production process, which restricts the competitive edge of marketers to designs and brands. Branded Manufacturers. Given that foreign production can often provide similar quantity, quality, and service as domestic producers, but at lower prices, apparel manufacturers in developed countries have been caught in a squeeze. They are responding in several different ways. In Europe and the US, an If you cant beat them, joint them attitude has evolved among many smaller and midsized apparel firms, who feel they cannot compete with the low cost of foreign-made goods and thus are defecting to the ranks of importers. The decision of many larger manufacturers in developed countries is no longer whether to engage in foreign production, but how to organize and manage it. These firms supply intermediate inputs (cut fabric, thread, buttons, and other trim) to extensive networks of offshore suppliers, typically located in neighboring countries with reciprocal trade agreements that allow goods assembled offshore to be re-imported with a tariff charged only on the value added by foreign labor. This kind of international subcontracting system exists in every region of the world. It is called the 807/9802 program or production sharing in the US (USITC 1997), where the sourcing networks of US manufacturers are predominantly located in the Caribbean, Central America, and Mexico. In Europe, this is known as outward processing trade (OPT), and the principal suppliers are located in North Africa and Eastern Europe (OETH 1995). In Asia, manufacturers from relatively high-wage economies like Hong Kong, China have outward processing arrangements (OPA) with the PRC and other low-wage nations (Birnbaum 1993). A significant countertrend is emerging among established apparel manufacturers, however, who are deemphasizing their production activities in favor of building up the marketing side of their operations by capitalizing on both brand names and retail outlets. Sara Lee Corporation, one of the largest apparel producers in the US, announced its plans to de-verticalize its consumer-

Section III The Asian Connection in the Apparel Commodity Chain

products divisions, a fundamental reshaping that would move it out of making the brand-name goods it sells (Miller 1997). Other well-known apparel manufacturers like Phillips-Van Heusen and Levi Strauss & Co. are also emphasizing the need to build global brands, frequently through acquisitions of related consumer products lines, while many of their production facilities are being closed or sold to offshore contractors.

III.

The Asian Connection in the Apparel Commodity Chain

The world textile and apparel industry has undergone several migrations of production since the 1950s and they all involve Asia. The first migration of the industry took place from North America and Western Europe to Japan in the 1950s and early 1960s, when Western textile and clothing production was displaced by a sharp rise in imports from Japan. The second supply shift was from Japan to the Big Three Asian apparel producers (Hong Kong, China; Taipei,China; and Korea), which permitted the latter group to dominate global textile and clothing exports in the 1970s and 1980s. During the past 10 to 15 years, there has been a third migration of productionthis time from the Asian Big Three to a number of other developing economies. In the 1980s, the principal shift was to the PRC, but it also encompassed several Southeast Asian nations and Sri Lanka. In the 1990s, the proliferation of new suppliers included South Asian and Latin American apparel exporters (Khanna 1993, Gereffi 1998). This most recent shift is seen in sharp relief in Table 1, which looks at apparel imports to the US, the worlds largest market, from 1983 to 1999. In 1983, the Asian Big Three plus the PRC were responsible for two thirds of US apparel imports; by 1999, this share had dropped to 30 percent. Table 1 highlights two main trends in US apparel imports: (i) a shift within Asia from the Big Three to the growing importance of successive waves of exporters: first the PRC, followed by Southeast Asia and then South Asia; and (ii) a growth in non-Asian sources of apparel supply, especially the importance of Central America and the Caribbean as a region (which nearly doubled its share of US apparel imports from 8 percent in 1990 to 15 percent in 1999) and, most notably, Mexico (which multiplied its share of US apparel imports nearly fivefold from 3 to 14 percent in the same period). How can we explain these trade shifts in the apparel commodity chain? Neoclassical economics has the simplest explanation: The most labor-intensive segments of the apparel commodity chain will be located in countries with the lowest wages. Both push and pull factors influence relocation decisions. The push factors in developed countries include relatively high labor costs, unionization, and strict environmental standards, especially for textile firms. The pull factors in many developing nations include substantial reserves of low-wage labor, weak or nonexistent unions, lax environmental standards, bureaucratic coordination, financial incentives, infrastructure, and political stability. A favorable transborder regulatory regime, such as US custom items 807/9802, also facilitates offshore shifts.

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Table 1. Trends in US Apparel Imports by Region and Country, 1983-1999


1983 Value Source Northeast Asia PRC Hong Kong, China Taipei,China Korea Macao Subtotal Southeast Asia Indonesia Philippines Thailand Malaysia Singapore Subtotal South Asia India Bangladesh Sri Lanka Pakistan Subtotal 1986 Value 1990 Value 1994 Value 1996 Value 1999 Value

US$mn Percent US$mn Percent US$mn Percent US$mn Percent US$mn Percent US$mn Percent

759 2,249 1,800 1,685 132 6,625 68

1,661 3,392 2,621 2,581 229 10,483 60

3,439 3,977 2,489 3,342 417 13,663 54

6,338 4,393 2,269 2,245 605 15,850 43

6,340 3,998 2,066 1,531 761 14,696 35

7,351 4,341 2,076 2,256 1,024 17,048 30

75 319 125 93 193 806 8

269 473 213 257 386 1,598 9

645 1,083 483 604 621 3,436 13

1,182 1,457 1,006 1,051 472 5,168 14

1,505 1,569 1,243 1,242 327 5,887 14

1,816 1,812 1,774 1,280 327 7,009 12

220 7 126 32 385 4

344 154 257 92 847 5

636 422 426 232 1,716 7

1,309 885 871 508 3,573 10

1,350 1,125 1,059 642 4,175 10

1,650 1,682 1,304 810 5,446 10

Central America and the Caribbean Dominican Republic 139 Honduras 20 El Salvador 7 Guatemala 4 Costa Rica 64 Jamaica 13 Other CBI 142 Subtotal Mexico All Other Countries GRAND TOTAL 389 199 1,328 9,731 4 2 14 100

287 32 11 20 142 99 207 797 331 3,283 17,341 5 2 19 100

723 113 54 192 384 235 284 1,985 709 4,009 25,518 8 3 16 100

1,600 650 398 600 686 454 151 4,538 1,889 5,859 36,878 12 5 16 100

1,773 1,241 721 809 706 505 321 6,076 3,850 6,996 41,679 15 9 17 100

2,355 2,198 1,328 1,244 828 344 591 8,349 7,845 10,679 56,376 15 14 19 100

Source: Compiled from official statistics of the US Department of Commerce, US imports for consumption, customs value.

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Section III The Asian Connection in the Apparel Commodity Chain

This account is supported by the sequential relocation of textile and apparel production from the US and Western Europe to the Asian Big Three, PRC, and Japan, , given that each new tier of entrants to the production hierarchy had significantly lower wage rates than their predecessors. The cheap-labor argument does not hold up as well, however, when we get to the proliferation of new Asian and Caribbean suppliers, whose US market share expanded even though their wage rates are often considerably higher than the PRCs. Furthermore, although the share of US apparel exports represented by the Asian Big Three has declined during the past decade, these NIEs still rank among Asias top apparel exporters to the US in 1997, despite having the highest apparel labor costs in the region, excluding Japan (see ILO 1995, 35-36). The statist perspective, which argues that government policies will play a major role in shaping the location of apparel export activities, helps to explain these discrepancies. A critical factor in the sharp decline of Taipei,Chinas and Koreas apparel exports in the late 1980s was not only their rising wage rates, but the sharp appreciation of their local currencies vis--vis the US dollar after the Plaza Agreement was signed in 1985. Between 1985 and 1987, the Japanese yen was revalued by close to 40 percent, the New Taiwan dollar by 28 percent, and from 1986 to 1988 the Korean won appreciated by 17 percent. The most important policies that shape US apparel imports from Asia, the Caribbean, and elsewhere, however, are quotas and preferential tariffs. Quotas on apparel and textiles items continue to be regulated by the Multifiber Arrangement (MFA) of the early 1970s. The MFA has been used by the Canada, various European nations, and the US to impose quantitative limits on imports in a wide variety of product categories. Although the clear intent of these policies was to protect developed-country firms from a flood of low-cost imports that threatened to disrupt major domestic industries, the result was exactly the opposite: protectionism heightened the competitive capabilities of developing country manufacturers, who learned to make sophisticated products that were more profitable than simple ones. Protectionism by core countries also diversified the scope of foreign competition, as an ever-widening circle of exporters was needed to meet booming North American and European demand. In recent years, the creation of the European Union and the North American Free Trade Agreement (NAFTA) has led to the imposition of preferential tariffs within regional markets, which has generated a major shift in the global sourcing dynamics of these regional markets. The ability of the East Asian NIEs to sustain their export success over several decades, and to develop a multilayered sourcing hierarchy within Asia, is only partially related to wage rates and state policies. From a commodity chain perspective, East Asia must be viewed as part of an interrelated regional economy (Gereffi 1998). The apparel export boom in the less developed southern tier of Asia has been driven to a significant extent by the industrial restructuring of the northern tier East Asian NIEs. As Northeast Asian firms began moving their production offshore, they devised ways to coordinate and control their sourcing networks. Ultimately, they focused on the more profitable design and marketing segments within the apparel commodity chain to sustain their competitive edge. This transformation can be conceptualized as a process of industrial upgrading, based in large measure on building various kinds of economic and social networks between buyers and sellers. This theme is further elaborated on in the fifth section.

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A.

Shifting Patterns of Asian Competitiveness: American, European, and Japanese Variations in Apparel Sourcing

During the 1990s, the Northeast Asian NIEs began to lose market share within their major export markets because of their high relative costs and limited quotas, along with the rapid incursion of new entrants into the apparel commodity chain. South and Southeast Asian apparel exporters became prominent participants in the global sourcing game. During this period, regional sourcing structures became more consolidated as neighboring countries to the European Union, Japan, and US began to take advantage of their geographical proximity (which cut transportation costs and lead time for deliveries) as well as their ability to move from assembly to the OEM or full-package model. These patterns can be illustrated by a series of concentric circle diagrams used to map imports. The US Market. Between 1990 and 1998, US apparel imports rose from $24.7 to $50.4 billion. Figure 2 is an import map that helps to identify trade shifts among the main suppliers to the US apparel market. Those nations in the innermost circle each account for 10 percent or more of the total value of US clothing imports in 1998, while each of those in the outer ring makes up only 1.0-1.9 percent of total imports. In other words, as we move from the inner rings to the outer ones in this import map, the relative importance of national apparel exporters decreases. Several key aspects of the direction and magnitude of change in US apparel trade are revealed in Figure 2. First, there are striking regional differences in the pattern of US apparel imports. The NIEs in Northeast Asia are becoming much less important in US apparel sourcing; South and Southeast Asia are growing slowly or not at all; and imports from PRC, Mexico, and to a lesser degree the Caribbean Basin are booming. Second, despite considerable mobility during the 1990s, there is a strong core-periphery pattern that dominates the geography of export activity in the US apparel sourcing matrix. Only four economies (PRC; Hong Kong, China; Korea; and Mexico) were core US suppliers during the past decade, and only the PRC and Mexico currently hold that distinction. There is a wide dispersion of 13 apparel suppliers in the outer two rings (indicating a 1 to 4 percent share of the US apparel market), with just six nations in the inner three rings. Third, while for most countries the degree of change from 1990 to 1998 has been relatively modest (they changed their position by one ring or not at all), only Mexico has improved its position substantially, moving from outside the circle (less than 1 percent of US apparel imports) in 1990 to the core (over 10 percent of US imports) in less than a decade. Nonetheless, inward shifts of even one ring may be quite significant for smaller economies, given the substantial overall growth of US apparel imports in the past decade. However, an important feature of US apparel sourcing is not revealed by this chart. There are two contending production systems reflected in US apparel sourcing: export-processing assembly (production sharing) and full-package supply (OEM production). The countries that have penetrated the US apparel market most deeply either have been experts at OEM supply (the Asian Big Three) or they are currently trying to develop full-package capabilities (the PRC and Mexico). All of the other countries on this list are relegated to simple assembly.

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Section III The Asian Connection in the Apparel Commodity Chain

Figure 2. Shifts in the Regional Structure of U.S. Apparel Imports from 1990 to 1998

North America (2)

5 Northeast Asia (4) Canada 3 Korea 2 Mexico Hong Kong, China 1 Dominican Republic 4

Central America and the Caribbean (2)

Costa Rica

PRC Taipei,China Philippines

Italy Indonesia Singapore Southeast Asia (5) Thailand Malaysia Bangladesh Sri Lanka India Turkey

Europe (2)

Pakistan
The rings indicate the share of total U.S. imports in U.S. dollars by partner country: 1. 10% + 4.2.0%3.9% 2. 6.0%9.9% 5.1.0%1.9% 3. 4.0%5.9% Total value of U.S. clothing imports was $24.7 billion in 1990 and $50.4 billion in 1998.

South Asia (4)

The 1998 position corresponds to the ring where the countrys name is located; the 1990 position, if different, is indicated by a small circle. The arrows represent the magnitude and direction of change over time. Source: World Trade Analyzer, based on United Nations data for SITC 84 (Article of apparel and clothing accessories).

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The European Union. Outward-processing trade (OPT) in the European clothing sector is the practice by which companies export fabrics, or parts of garments, to be further processed in a third country and then re-imported as finished garments in an EU country.6 OPT is analogous to the US production sharing system (known as 807 or 9802 trade) and similar outward-processing arrangements that cover a portion Hong Kong, Chinas trade regime in apparel with the PRC. OPT, which has been regulated within the EU since 1982, is widely recognized as accelerating the process of delocalization, or the shift of apparel production to low-wage countries. Trade policy discourages textile firms from delocalization, however. If non-EU fabrics are used in OPT, they are penalized by a tariff of 14 percent levied on their re-imports. The level of tariff duties offsets the advantage of lower production costs. The main lure of OPT is to reduce labor costs, which account for up to 60 percent of production costs in the clothing industry. In 1995, OPT accounted for 14 percent of total EU clothing imports. This is considerably less than the 80 to 90 percent of US imports from Mexico and the Caribbean Basin countries that qualify as production sharing or 9802 trade. However, the extent of OPT trade is much more significant than this overall figure of 14 percent might indicate. More than 80 percent of OPT imports in clothing are concentrated in only four member states of the EU: France, Germany, Italy, and UK. The share of OPT in total clothing imports is highest in Germany (21 percent), followed by Italy (17 percent), France (7 percent), and the UK (5 percent) (OETH 1996, 51-52). By 2000, it was predicted that through a combination of OPT garments and imported apparel secured by large volume retailers, imports will account for 70 percent of EU apparel consumption (Dickerson 1995, 188). If we examine the regional pattern of Europes apparel imports in the 1990s, we see a sourcing map that looks very similar in size and structure to that of the US. Figure 3 shows the shifts in European apparel imports from 1990 to 1998.7 The total value of European clothing imports was $24.6 billion in 1990 and $48.9 billion in 1998virtually identical to the values of US apparel imports in the same years (see Figure 2). Among the Asian suppliers, only the PRC and Hong Kong, China played central roles in 1998, with most of the Northeast and Southeast Asian economies losing European market share since 1990. However, three sets of additional countries now play prominent roles as apparel exporters to Europe: Morocco, Tunisia, and Turkey in North Africa; and a spate of Eastern European economies plus the former Soviet Union. All of these economies are geographically proximate to the European Union, but they have different kinds of capabilities. Turkey is a full-package supplier with a strong set of vertically integrated textile and apparel firms, whose strongest ties are to Germany. Tunisia and Morocco are outward-processing sites that mainly assemble apparel for firms located in France and Italy. Eastern Europe and the former Soviet Union also do outward processing of apparel for EU buyers, but as relatively mature industrialized economies, they are reliable full-package suppliers for
6 7

When foreign production or sourcing does not involve the temporary export of fabrics, then importation occurs under a regime of direct imports. Figure 3 excludes intra-European apparel trade among the original 12 member states of the European Union, as well as the three new member states (Austria, Finland, and Sweden).

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different types of apparel items. In addition, there probably is considerable interest among some of the more advanced East European apparel firms to embark on the transition from OEM to OBM production. Japan. The apparel import maps for Europe and the US contrast sharply, however, with that of Japan (see Figure 4). Unlike the relatively dense networks of 20-25 major apparel suppliers we saw in Figures 2 and 3, only 11 countries had at least a 1 percent share of the Japanese market in either 1990 or 1998. However, even this is deceiving because only three countries have played major roles as apparel suppliers to Japan. In 1990, Korea was the leader with 29 percent of Japans apparel imports, but by 1998 it had just over 6 percent of the market. Although Hong Kong, China had nearly 12 percent of Japanese apparel imports in 1998, the big winner was the PRC, whose import share soared from 19 percent to 55 percent between 1990 and 1998. Why is the Japanese apparel sourcing structure so different than that found in Europe and the US? The answer lies with the MFA system that has prevailed from the early 1970s through the mid-1990s in the multilateral trade regime. Japan does not employ the apparel and textile quotas permitted by the MFA under the General Agreement on Tariffs and Trade. However, when the World Trade Organization was established in 1995, it was agreed that the MFA preference scheme would be eliminated by 2005. Thus, the PRCs dominance in Japans apparel exports may be showing the rest of the world what the future will look like when MFA is phased out in several more years. The World Market. A closer look at the worlds leading apparel exporters in the 1980s and 1990s reveals both a broadening and deepening of global sourcing networks. If we take $1 billion of apparel exports as a threshold for major players in the global industry, Table 2 shows a striking stair-step pattern of market entry. In 1980, only PRC; Hong Kong, China; Korea; Taipei,China, and US were major global apparel exporters. By 1990, Indonesia, Malaysia, and Thailand in Southeast Asia were added to the list, along with India and Pakistan in South Asia, and Tunisia in North Africa (Ramaswamy and Gereffi 2000). The largest apparel newcomer in 1990 was Turkey, whose total of $3.4 billion in clothing exports placed in fifth in the world behind only the four Northeast Asian powerhouses. In 1998, new members of the billion-dollar club of apparel exporters included the Philippines and Viet Nam in Southeast Asia, Bangladesh and Sri Lanka in South Asia, Mauritius and Morocco in Africa, and four nations from Eastern Europe. Mexico had a meteoric rise from less than $0.1 billion in 1990 to $7 billion eight years later. The top four apparel exporters in 1998 were PRC ($31.4 billion); Hong Kong, China ($22.4 billion); Turkey ($7.3 billion); and Mexico ($7.0 billion). Notwithstanding these high absolute levels of apparel shipments, the worlds 25 leading apparel suppliers vary widely in the relative importance of apparel as an export item. The countries most reliant on apparel exports are Bangladesh (75 percent), Mauritius (57 percent), and Sri Lanka (52 percent). In the Dominican Republic and Tunisia, apparel represents more than 40 percent of total national exports, and clothing accounts for between a third and a quarter of all exports in Morocco, Romania, and Turkey (see Table 2).

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Figure 3. Shifts in the Regional Structure of European Apparel Imports from 1990 to 1998
Other Europe (2) Switzerland Eastern Europe and ex-USSR (7) Former Yugoslavia Hungary 2 Poland PRC 1 Turkey Hong Kong, China 3 4 5 Taipei,China

Northeast Asia (4)

Korea

Bulgaria Former USSR

Czech Republic

Romania

Indonesia Malaysia

Southeast Asia (4)

India Morocco

Thailand Viet Nam Bangladesh Sri Lanka Pakistan South Asia (4)

Tunisia US North American (1)

Mauritius Africa (3)


The rings indicate the share of total European imports in US dollars by partner country: 1. 10% 4.2%3.9% 2. 6.0%9.9% 5.1.0%1.9% 3. 4.0%5.9% Total value of European clothing imports was $24.6 billion in 1990 and $48.9 billion in 1998.

This chart excludes intra-European trade among the original 12 member states of European Union (Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and the United Kingdom), as well as the 3 new member states (Austria, Finland, and Sweden). Total apparel imports are for the entire European region, but exclude the former USSR. The 1998 position corresponds to the ring where the countrys name is located; the 1990 position, if different, is indicated by a small circle. The arrows represent the magnitude and direction of change over time. Source: World Trade Analyzer, based on United Nations data for SITC 84 (Article of Apparel and Clothing Accessories).

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Figure 4. Shifts in the Regional Structure of Japanese Apparel Imports from 1990 to 1998
5 Europe (3) France United Kingdom Italy 2 Hong Kong, China 1 PRC Korea 3 4 Taipei,China Northeast Asia (4)

Indonesia

US North America (1)

Thailand Southeast Asia (3)

Viet Nam

The rings indicate the share of total Japanese imports in US dollars by partner country 1. 25% + 4.2.0%3.9% 2. 10.0%24.9% 5.1.0%1.9% 3. 4.0%9.9% Total value of Japanese clothing imports was $8.6 billion in 1990 and $14.5 billion in 1998.

The 1998 position corresponds to the ring where the countrys name is located; the 1990 position, if different, is indicated by a small circle. The arrows represent the magnitude and direction of change over time. N.B.: From 1990 to 1998, Koreas share of Japans apparel imports fell from 29 to 6.4 percent, while the PRCs import share of the Japanese apparel market grew from 19.3 to 54.7 percent. Source: World Trade Analyzer, based on United Nations data for SITC 84 (Article of Apparel and Clothing Accessories).

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Table 2. Worlds 25 Leading Apparel Exporters, 1980-1998


Hourly apparel labor costs Apparel as % of (wages & total national fringe exports benefits) US$, 1980b 1990b 1998b 1998c

Region/Country

PopulaGNP GNP/ tion (US$ capita (millions) billions) (US$) 1998a 1998a 1998a

Total national exports (US$ billions) 1980b 1990b 1998b

Apparel exports to the world market (US$ billions) 1980b 1990b 1998b

Northeast Asia
PRC Hong Kong, China Korea Taipei,China Southeast Asia Indonesia Thailand Malaysia Philippines Vietnam South Asia India Bangladesh Sri Lanka Pakistan 1,239 7 46 22d 924 750 158 23,660 399 8,600 285d 13,200d 19 21 18 21 65 84 66 71 191 176 140 135 1.7 5.3 3.1 2.6 10.2 15.7 8.3 4.2 31.4 22.4 4.8 3.4 8.6 25.4 17.0 12.3 15.7 18.7 12.4 5.8 16.4 12.7 3.4 2.5 0.43 5.20 2.69 4.68

204 61 22 75 77

131 132 81 79 27

640 2,160 3,670 1,050 350

24 7 14 6 0

28 24 31 8 1

52 62 75 30 9

0.6 0.3 0.2 0.3 0.01

2.9 2.9 1.4 0.7 0.1

4.5 3.4 2.4 2.4 1.3

2.4 4.2 1.2 4.9 7.3

10.3 12.2 4.5 8.4 5.0

8.6 5.5 3.2 8.0 14.7

0.16 0.78 1.30 0.76 0.22

980 126 19 132

427 44 15 61

440 350 810 470

8 1 1 3

19 1 2 6

41 5 4 9

0.6 0.0 0.1 0.1

2.6 0.6 0.7 1.1

4.8 3.9 2.3 2.0

7.9 0.2 10.5 4.2

14.2 42.0 33.9 18.5

11.9 75.0 51.8 22.6

0.39 0.30 0.44 0.24

Central and Eastern Europe Turkey 63 Poland 39 Romania 23 Hungary 10 Czech Republic 10 Africa Tunisia Mauritius Morocco Caribbean Basin Dominican Rep. Costa Rica North America US Mexico World Totals

201 151 31 46 53

3,160 3,910 1,360 4,510 5,150

3 15 12 9 12

13 12 6 10 7

28 29 9 24 40

0.1 0.6 0.4 0.3 0.4

3.4 0.4 0.4 0.4 0.3

7.3 2.5 2.1 1.3 1.3

4.6 4.2 3.1 4.0 3.3

25.9 3.0 7.6 3.8 3.5

26.3 8.5 24.0 5.5 3.2

1.84 2.77 1.04 2.12 1.85

9 1 28

19 4 34

2,060 3,730 1,240

2 0 2

3 1 4

6 2 8

0.3 0.1 0.1

1.1 0.6 0.7

2.6 1.0 2.6

15.7 17.2 4.6

32.9 50.9 17.2

43.7 57.4 33.5

0.98e 1.03 1.36

8 4

15 10

1,770 2,770

1 1

2 2

5 6

0.0 0.02

0.8 0.1

2.4 0.7

0.0 1.9

35.7 3.7

48.0 12.2

1.48 2.52

270 96

7,903 29,240 368 3,840 4,890

240 16 2,014

418 29 3,471

727 125 5,692

1.3 0.1 39.6

2.7 0.1 110.6

9.4 7.0 198.3

0.1 0.3 2.0

0.6 0.4 3.2

1.3 5.6 3.5

10.12 1.51 na

5,897 28,835

aWorld Bank, World Development Report 1998/99 (World Bank 1999, 190-91). bWorld Trade Analyzer, based on United Nations trade data. Apparel is defined as SITC 84. cWerner International, Inc. d1997 data from Taiwan Statistical Data Book 1999, Council for Economic Planning and Development. e1996.

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Table 3 provides information on whether apparel has risen or fallen in rank among the leading export items (measured at the two-digit SITC level) of the worlds 25 biggest apparel exporters. In Northeast and Southeast Asia, apparel tends to have declined in relative importance, except in the PRC where it remains the top export item. However, in Africa, the Caribbean Basin, Central and Eastern Europe, and South Asia, apparel tends to be the leading export product, and largely has held that status for a decade or more.
Table 3. Position of Apparel Among Leading Export Items, 1980-1998
Top Export Item, 1998 Apparel Rankb Exporting Country Northeast Asia PRC Hong Kong, China Korea Taipei,China Southeast Asia Indonesia Thailand Malaysia Philippines Viet Nam South Asia India Bangladesh Sri Lanka Pakistan SITCa Description US$ billions % of total exports 1980 1990 1998 Trends in Apparel Ranking 1980-90 1990-98

84 89 77 75

Apparel Misc. manufactures Electrical machinery Office machines

31.3 22.8 25.0 25.1

16 13 18 19

4 1 1 1

1 1 1 5

1 2 9 9

Up Same Same Down

Same Down Down Down

33 75 77 77 85

Petroleum Office machines Electrical machinery Electrical machinery Footwear

4.4 9.2 18.7 15.1 1.6

8 15 25 50 17

6 8 9 6 4

4 1 6 1 5

4 4 6 4 3

Up Up Up Up Down

Same Down Same Down Up

66 84 84 65

Nonmetallic mineral mfg Apparel Apparel Textile yarn & fabrics

5.3 3.9 2.3 4.4

13 75 52 51

4 13 4 4

2 1 1 2

3 1 1 2

Up Up Up Up

Down Same Same Same

Central and Eastern Europe Turkey 84 Poland 84 Romania 84 Hungary 71 Czech Republic 78 Africa Tunisia Mauritius Morocco Caribbean Basin Dominican Rep. Costa Rica North America US Mexico World Totals

Apparel Apparel Apparel Power generating equip. Road vehicles

7.3 2.5 2.1 2.9 6.0

26 8 24 12 15

6 6 3 8 10

1 10 4 9 7

1 1 1 4 7

Up Down Down Down Up

Same Up Up Up Same

84 84 84

Apparel Apparel Apparel

2.6 1.0 2.6

44 57 33

2 2 7

1 1 1

1 1 1

Up Up Up

Same Same Same

84 05

Apparel Vegetables & fruit

2.4 1.1

46 20

34 9

1 7

1 3

Up Up

Same Up

77 78 78

Electrical machinery Road vehicles Road vehicles

79.4 20.8 524.0

11 17 9

38 27 15

37 35 9

19 6 8

Up Down Up

Up Up Up

aSITC refers to Standard International Trade Classification categories. bRankings are based on the position of apparel in each economys total world

exports, using two-digit SITC categories.

Source: World Trade Analyzer, based on United Nations trade data.

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IV.

Regional Divisions of Labor in Asia: A Commodity Chains Interpretation

There is a paucity of literature on regional divisions of labor in the East Asian context. Bernard and Ravenhill (1995) have written an important article that provides several salient critiques of the flying geese and product cycle approaches initially popularized by the Japanese and American economists, Kaname (1961) and Vernon (1971), respectively. The standard amalgam of Akamatsus and Vernons ideas claims that the development experience of Japan will be replicated in a series of economic sectors and countries throughout East Asia. Imports, domestic production, and exports are expected to follow one another in strict succession, as the product cycle is repeated for increasingly sophisticated goods. According to this state-centric view, the rise and fall of products mirrors the rise of national economies, which the flying geese model takes as the appropriate unit of analysis for understanding economic change. Product cycle theory, in turn, posits an essentially ahistoric flow of individual products in isolation from larger industrial structures. Consequently, it omits the backward and forward linkages involving diverse networks of firms within economic sectors, and it overlooks differences in company strategies that can be used to alter the dynamics of product cycles. Technological diffusion in East Asia has only been partial, at best, and is linked to ongoing Japanese innovation of components, machinery, and materials. Thus Korea and Taipei,China remain technologically dependent on Japan, which has never really exited the so-called mature industries. In key sectors like electronics and automobiles, Japan has revitalized core technologies and restricted exports of finished products from the East Asian NIEs back into Japan. Southeast Asia, unlike Korea and Taipei,China, lacked a substantial foundation of import-substituting industrialization, leading to a heavy dependence on transnational subsidiaries for their manufactured exports (Bernard and Ravenhill 1995, 196). Without an ISI base, indigenous capital goods sectors in Southeast Asia are weak, resulting in limited backward linkages and a foreigndominated export sector. From a commodity chains perspective, there are overlapping, and at times conflicting, networks involved in East Asias export-oriented development. Producer-driven and buyer-driven chains coexist in each of the tiers of the Asian regional division of labor. While all the nations in the region have pursued strategies of EOI, the timing, products, and linkages involved have varied across the region. (i) Japan was a significant exporter to the United States in buyer-driven commodity chains (BDCCs) such as apparel and footwear in the 1950s and 1960s, but then switched in the 1970s to producer-driven commodity chains (PDCCs) like automobiles, electrical machinery, and computers. Japan used its large trading companies (sogo shosha) to transfer BDCCs to the East Asian NIEs, while Japanese transnationals were the main mechanism employed in setting up and maintaining PDCCs in Southeast Asia. (ii) The East Asian NIEs became successful exporters in the late 1960s and 1970s primarily by mastering the dynamics of BDCCs. Apparel was a leading export sector for each of

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(iii)

(iv)

the four NIEs, toys for all but Singapore, footwear for Korea and Taipei,China, and so on. These countries moved quickly from assembly to OEM production in BDCCs. Unlike Southeast Asia, however, the East Asian NIEs (with the exception of Singapore) are making the transition to PDCCs on the basis of exports by domestically owned firms, not transnational companies. Southeast Asia launched a different form of EOI than that of the East Asian NIEs. Southeast Asias initial export industriesautomobiles and electronics (semiconductors, disk drives, and computers)were organized in the 1970s and early 1980s as PDCCs. The drivers in these chains were Japanese, European, and US transnationals. In the 1980s, a second generation of export industries was set up in Southeast Asia: these were the BDCCs (apparel, footwear, toys) that were no longer cost-competitive in the East Asian NIEs because of currency appreciation, rapid wage increases, and difficulty in hiring workers domestically for labor-intensive production, even at prevailing high wage rates. Instead of core country transnationals (as in PDCCs) or European and US buyers (as in the first-generation BDCCs set up in the NIEs), the main organizing agents in Southeast Asias buyer-driven chains were investors from the East Asian NIEs who set up triangle manufacturing networks in the region to take advantage of lower labor costs and, in the case of apparel, available quotas. The Peoples Republic of China has emerged as the regions dominant player in BDCCs in the 1990s, but it currently has only a minor role in PDCCs. The PRC is the worlds biggest volume exporter of a wide range of consumer goods, including clothes, shoes, toys, watches, bicycles, and so on. The PRCs presence as a leading exporter in these global commodity chains is vulnerable to economic and political shifts. These range from economic recession in the European and North American economies that are the major markets for the PRCs exports, to the possibility that the US government will fail to renew the PRCs most-favored-nation trade status. As a result, production in the PRC is likely to be increasingly directed at Asian and other nonquota markets in the latter half of the 1990s.

The interaction of producer-driven and buyer-driven commodity chains within East Asias regional political economy gives rise to overlapping and competing regional divisions of labor in East Asia that are based on different network structures. Producer-driven commodity chains transfer the hierachical relations between transnational core firms and their subsidiaries into vertical, investment-based networks within East Asia; conversely, the core commercial companies (retailers and designers) in buyer-driven commodity chains convert their specification contracting or OEM relationship with suppliers in Asia into horizontal, trade-based networks that establish a distinctive division of labor within and between global regions.

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V.

Industrial Upgrading in Asias Apparel Commodity Chain

Countries are connected to global commodity chains through the goods and services they supply in the world economy. These trade linkages can be conceptualized as a set of five major export roles: (i) primary product exports, including processed industrial commodities and nontraditional agricultural exports; (ii) the export-oriented assembly of traditional manufactured goods, such as apparel and electronics items, using imported components; (iii) the production of components for export in relatively advanced industries, such as automobiles and computers, using substantial local inputs; (iv) original equipment manufacturing (OEM), whereby contractors make goods to be sold under another companys brand name; and (v) original brand name manufacturing (OBM), whereby manufacturers make goods for export and sale under their own label (Gereffi 1994b, 222-4; 1995). These export roles are not mutually exclusive. In fact, most nations are tied to the world economy in multiple ways. The East Asian NIEs employed all five export roles from the 1960s to the mid-1990s, although they currently are focusing almost exclusively on component-supply manufacturing, OEM, and OBM. Most of the countries in Southeast Asia and Latin America are involved in the first three roles, the bulk of exports in South Asia and Sub-Saharan Africa fit the first two roles, and many nations from Africa and the Middle East only have primary product exports. The East Asian NIEs are generally taken as the archetype for industrial upgrading among developing countries. Hong Kong, China; Korea; Singapore; and Taipei,China appear to have moved smoothly and rapidly from assembly to component production to OEM to OBM. Each export role is progressively more difficult to establish because it implies a higher degree of domestic integration and local entrepreneurship; thus industrial upgrading is enhanced as countries move along this trajectory. However, a closer look at the experiences of the East Asian nations reveals considerable diversity in the sequences, content, and organizational dynamics of these export roles. The East Asian NIEs made a rapid transition from the initial assembly phase of export growth (typically utilizing export processing zones located near major ports) to a more generalized system of incentives that applied to all export-oriented factories in their economies (Chen 1994). The next stage for Hong Kong, China; Korea; Singapore; and Taipei,China was OEM production. Original equipment manufacturing, also known as specification contracting, has the following features: the supplying firm makes a product according to the design specified by the buyer; the product is sold under the buyers brand name; the supplier and buyer are separate firms; and the supplier lacks control over distribution. East Asian firms became full-range package suppliers for foreign buyers, and thereby forged an innovative entrepreneurial capability that involved the coordination of complex production, trade, and financial networks. The OEM export role has many advantages. It enhances the ability of local entrepreneurs to learn the preferences of foreign buyers, including international standards for the price, quality, and delivery of export merchandise. It also generates substantial backward linkages in the domestic

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economy because OEM contractors are expected to develop reliable sources of supply for many inputs. Moreover, expertise in OEM production increases over time and spreads across different types of activities. The OEM supplier learns much about the downstream and upstream segments of the apparel commodity chain from the buyer. This tacit knowledge can later become a powerful competitive weapon. Particular places such as the East Asian NIEs thus retain an enduring competitive edge in export-oriented development. However, East Asian producers confront intense competition from lower-cost exporters in various parts of the Third World, and the price of their exports to Western nations has been further elevated by sharp currency appreciations between 1985 to 1997. Under these circumstances, it is advantageous to establish forward linkages to developed-country markets, where the biggest profits are made in buyer-driven commodity chains. Therefore, a number of firms in the East Asian NIEs that pioneered OEM are now pushing beyond it to the OBM role by integrating their manufacturing expertise with the design and sale of their own branded merchandise. Korea is the most advanced of the East Asian NIEs in OBM production, with Korean brands of automobiles (Hyundai), electronic products (Samsung), and household appliances (Samsung and Goldstar), among other items, being sold in North America, Europe, and Japan. Companies in Taipei,China have pursued OBM in computers, bicycles, sporting equipment, and shoes, but not in apparel. In Hong Kong, China, clothing companies have been the most successful in making the shift from OEM to OBM. The womens clothing chain Episode, controlled by Hong Kong, Chinas Fang Brothers Group, one of the foremost OEM suppliers for Liz Claiborne in the 1970s and 1980s, has stores in 26 countries, only a third of which are in Asia. Giordano, Hong Kong, Chinas most famous clothing brand, has added to its initial base of garment factories some 200 stores in the PRC and Hong Kong, China, and another 300 retail outlets scattered across Korea and Southeast Asia. Hang Ten, a less-expensive line, has 200 stores in Taipei,China, making it the largest foreignclothing franchise on the island (Granitsas 1998).

A.

Triangle Manufacturing and the Internationalization of Asian Production Networks

To keep OEM profitable under conditions of intense wage competition among developing countries and protectionism in Western markets, East Asian NIE companies have set up elaborate offshore production networks. The key to profitability in OEM production for East Asian NIEs is manufacturing expertise (including substantial spending in research and development), and learning how to flexibly manage overseas production networks. This can be seen in Hong Kong, Chinas apparel manufacturers, Taipei,Chinas footwear companies, and Singapores computer firms. Network flexibility thus has become one of the major organizational assets utilized by the NIEs in their internationalization strategies. One of the most important mechanisms facilitating the shift to higher-value-added activities for mature export industries like apparel in East Asia is the process of triangle manufacturing

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(Gereffi 1999). The essence of triangle manufacturing, which was initiated by textile and apparel suppliers in the East Asian NIEs in the 1970s and 1980s, is that US (or other overseas) buyers place their orders with the NIE manufacturers they have sourced from in the past, who in turn shift some or all of the requested production to affiliated offshore factories in low-wage countries (e.g., PRC, Guatemala, or Indonesia). These offshore factories can be wholly owned subsidiaries of the NIE manufacturers, joint-venture partners, or simply independent overseas contractors. The triangle is completed when the finished goods are shipped directly to the overseas buyer under the US import quotas issued to the exporting nation. Triangle manufacturing thus changes the status of NIE manufacturers from established suppliers for US retailers and designers to middlemen in buyer-driven commodity chains that can include as many as 50 to 60 exporting countries. In the case of apparel, US buyers initially established direct OEM links with producers in Hong Kong, China; Korea; and Taipei,China. Eventually the PRC and the nations of Southeast and South Asia were incorporated into the chain as lower-cost Asian production sites, with Hong Kong, China and Taipei,China employing their cultural ties with the overseas Chinese business communities throughout the region to establish the three-tiered networks used in triangle manufacturing. The intermediary role of the NIEs continued to evolve. In addition to supplying a growing number of regional exporters with apparel orders, fibers, textiles, financing, and quota brokerage services, the NIEs moved from OEM to OBM by developing their own brands of clothing for production and sale within Asia. Apparel has now become a leading export sector for nations at lower levels in Asias regional production hierarchy, such as Bangladesh, PRC, Indonesia, Pakistan, Sri Lanka, and Thailand,. As new countries turn to apparel to launch their exportoriented development strategies, the regional hierarchy deepens. A stylized portrayal of the multifaceted pattern of industrial upgrading followed especially by East Asian nations in the apparel commodity chain is presented in Figure 5. The vertical axis represents the hierarchical networks established by Japan and the East Asian NIEs in order to expand the Asian supply base for the apparel commodity chain in the second half of the 20th century. New groups of countries became incorporated as garment exporters in successive decades. However, entry into the apparel commodity chain as a garment exporter is only the first step in the industrial upgrading process. As the search for cheap labor and increased quota drove European and US buyers to search for additional low-wage apparel export platforms, the original and more developed apparel exporters began to shift their emphasis from labor-intensive apparel production to the more capital-intensive phases of the commodity chain: textiles, fibers, and machinery. We will examine this upgrading process in two stages: first, we will look at the factors that led to the international expansion of textile and apparel production networks in Asia; and second, we will look at how Japan and the East Asian NIEs upgraded by moving their export production upstream from garments to textiles. In each of the East Asian NIEs, a combination of domestic supply side constraints (labor shortages, high wages, and high land prices) and external pressures (currency revaluation, tariffs, and quotas) led to the internationalization of the textile and apparel complex by the late 1980s

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Section V Industrial Upgrading in Asias Apparel Commodity Chain

and early 1990s. Typically, the internationalization of production was sparked first by quotas, but the process was greatly accelerated as supply-side factors became adverse. Quotas determined when the outward shift of production began, while preferential access to overseas markets and social networks determined where the firms from the East Asian NIEs went. In this international division of labor, skill-intensive activities were retained in East Asia8 and labor-intensive activities were relocated.
Figure 5. Stylized Model of Industrial Upgrading in the Asian Apparel Commodity Chain Countries
Japan Garments 1950s and early 1960s 1960s onward 1970s onward Hong Kong, China Korea Taipei,China

Segments of Apparel Commodity Chain


Textiles Fibers Machinery (spinning, weaving, cutting, sewing)

Level of Development

Garments Late 1960s, 1970s, and early 1980s

Textiles

Fibers

late 1980s and 1990s

PRC Indonesia Thailand India Pakistan

Garments Late 1980s

Textiles 1990s

Viet Nam Sri Lanka Bangladesh

Garments Mid-1990s Low Value-added High

Notes: Dotted arrows refer to the sequence of production and export capabilities within economies. Solid arrows refer to the direction of trade flows between economies. Dates refer to a countrys peak years for exports of specific products.
8

In the apparel sector, the activities associated with OEM production that tended to remain in the NIEs were jobs such as product design, sample making, quality control, packing, warehousing, transportation, quota transactions, and local financing through letters of credit. These provided relatively high gross margins or profits.

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The internationalization of Hong Kong, Chinas firms was triggered by textile import restrictions imposed by the UK in 1964, which led Hong Kong, China manufacturers in the late 1960s to shift production to Macau; Singapore; and Taipei,China. The Chinese population in these three countries had cultural and linguistic affinities with Hong Kong, China investors. In addition, Macau benefited from its proximity to Hong Kong, China while Singapore qualified for Commonwealth preferences for imports into the UK. In the early 1970s, Hong Kong, China apparel firms targeted Malaysia Mauritius, and Philippines. This second round of outward investments again was prompted by quota restrictions, coupled with specific host-country inducements including the provision of export processing zone facilities in Southeast Asia and elsewhere. For example, Mauritius established an export-processing zone in an effort to lure Hong Kong, China investors, particularly knitwear manufacturers who directed their exports to European markets that offered preferential access in terms of low tariffs. The greatest spur to the internationalization of Hong Kong, Chinas textile and apparel companies was the opening of the PRC economy in 1978. At first, production was subcontracted to state-owned factories, but eventually an elaborate outward-processing arrangement with the PRC was set up that relied on a broad assortment of manufacturing, financial, and commercial joint ventures. The relocation of industry to the PRC led to a hollowing out of Hong Kong, Chinas manufacturing sector during the late 1980s and early 1990s. In 1991, 47,000 factories in Hong Kong, China were employing 680,000 workers, a figure 25 percent below the peak of 907,000 manufacturing jobs recorded in 1980 (Khanna 1993, 19). The decline was particularly severe in textiles and apparel. Employment in the textile industry fell from 67,000 in 1984 to 36,000 in 1994a drop of 47 percent. Meanwhile, clothing jobs plummeted from 300,000 in 1984 to 137,000 in 1994a decrease of 56 percent in a single decade (De Coster 1996a, 65). In 1995, Hong Kong, China entrepreneurs operated more than 20,000 factories employing an estimated four-and-ahalf to five million workers in the Pearl River Delta alone in the neighboring Chinese province of Guangdong (De Coster 1996b, 96). Considering that total employment in Hong Kong, China had shrunk to 386,000 in 1995, or just over 15 percent of the workforce (Berger and Lester 1997, 9), manufacturers in effect increased their domestic labor force well over tenfold through their outward processing arrangement with the PRC. While manufacturing declined, trading activities in Hong Kong, China grew to encompass approximately 70,000 firms and 370,000 jobs in 1991, a fivefold increase in the number of firms and a fourfold increase in the number of workers in the trading sector compared to 1978 (Khanna 1993, 19). Thus, trading companies to a large extent have replaced factories as the key economic agent in Hong Kong, Chinas export-oriented growth. This extreme reliance of apparel manufacturers on low-cost Chinese labor has several sources of vulnerability that may undermine the viability of this model in the future (Berger and Lester 1997, 158-62). First, although Guangdong province was once a zone of low wages and an abundant workforce, both wages and land costs have been rising rapidly. As costs in Guangdong

26

Section V Industrial Upgrading in Asias Apparel Commodity Chain

go up, Hong Kong, China manufacturers who wish to retain this PRC-based production system will have to move their facilities deeper and deeper inland, where they will once again encounter bad roads, inadequate water and power systems, and lack of commercial infrastructure. Second, as production moves inland, it will be increasingly difficult to maintain an adequate supply of managers from Hong Kong, China. Rather than trying to replicate the Pearl River Delta pattern on a large scale further inland, it probably would be better to try to upgrade the operations in the Guangdong plants. Third, new low-cost apparel exporting nations are emerging in Asia India, Indonesia, Myanmar, Sri Lanka, Viet Nam, and otherswhile Mexico and the Caribbean Basin economies loom as cheap production sites with closer proximity to the large US market. Hong Kong, China has no special advantages in many of these locations, which suggests that it should avoid being locked into low-wage offshore manufacturing networks and instead take fuller advantage of the global trend toward service-enhanced manufacturing where Hong Kong, China retains a strong competitive edge. As in Hong Kong, China, the internationalization of Koreas and Taipei,Chinas apparel producers began as a response to quota restrictions. Korean garment firms lacking sufficient export quotas initially set up offshore production in quota-free locations like Saipan, a US territory in the Mariana Islands. More recent waves of internationalization have been motivated by the domestic constraints of rising wages and worker shortages. The low-wage regions that have attracted the greatest number of Korean companies are Latin America, and Southeast and South Asia. The preference of Korean firms for investment in Latin America (Dominican Republic, Guatemala, Honduras, etc.) is stimulated by its proximity to the US market and easy quota access. The pull of Asian nations such as Bangladesh, Indonesia, and Sri Lanka comes mainly from their wage rates, which are among the lowest in the world. When Taipei,China firms moved offshore in the early 1980s, they also confronted binding quotas. While Taipei,Chinas wages in the late 1970s and early 1980s were still relatively low, quota rents were high. Firms had to buy quotas (whose value in secondary markets fluctuated widely) in order to be able to expand exports, thereby causing a decrease in profitability for firms without sufficient quota (Appelbaum and Gereffi 1994). This led to a growing emphasis on nonquota markets by its textile and apparel exporters. Quota markets (Canada, the European Community, andthe US) accounted for over 50 percent of its textile and apparel exports in the mid-1980s, but this ratio declined to 43 percent in 1988 and fell further to 35 percent in 1991. The US, which had been Taipei,Chinas largest export market for years, claimed one quarter of textile and apparel exports in 1991, the European Community at 8 percent, and Canada just 2 percent. The main nonquota markets, which absorbed nearly two thirds of Taipei,Chinas textile and apparel exports in the early 1990s, were Hong Kong, China (30 percent); Japan (6 percent); and Singapore (3 percent) (Khanna 1993, 29-30). Hong Kong, China, now Taipei,Chinas leading export market, is mainly a conduit for shipping yarns, fabrics, and clothing to the PRC for further processing and re-export.

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B.

Upgrading Within the Chain: The Export Shift from Apparel to Textiles and Fibers

During the 1980s, the worldwide apparel exports of Korea and Taipei,China grew steadily, but slumped in the 1990s. Hong Kong, Chinas apparel exports also rose during the 1980s, but then expanded even more rapidly in the 1990s because Hong Kong, China had a more diversified set of export partners than did Korea and Taipei,China. However, the PRC was Asias star performer as an apparel exporter since 1989, topping $30 billion in export revenues in 1997 and 1998 (see Figure 6).The East Asian NIEs as well as Japan countered the slowdown in their worldwide apparel exports in the 1990s through the growth of textile and fiber exports, which accelerated sharply from the mid-1980s until 1997 (see Figure 7).
Figure 6. Apparel Exports to the World (SITC 84)
US$ millions
35,000

30,000

PRC

25,000

Hong Kong, China


20,000

15,000

10,000

5,000 0

Korea Taipei,China Japan


1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Japan

Korea

Taipei,China

Hong Kong, China

PRC

The increased emphasis on textile and fiber exports by Japan and the East Asian NIEs is an intrinsic part of triangle manufacturing throughout the region. Hong Kong, China; Korea; and Taipei,China perform several different tasks when they act as intermediaries in triangle manufacturing networks: they carry export orders and their specifications from European and US buyers to garment factories throughout Asia; they facilitate transportation logistics, export financing, and quality control monitoring; and they generally supply the other African, Asian, and Latin American apparel exporters with textiles that are used in their export production. Thus, revenues lost by the East Asian NIEs in declining apparel exports are compensated by the growth in higher value-added textile and fiber exports. Japan is also the major supplier of

28

Section V Industrial Upgrading in Asias Apparel Commodity Chain

sewing machines to apparel exporters throughout Asia and much of the developing world. Thus, Japan and the East Asian NIEs do not exit the apparel commodity chain, rather they upgrade their position within the chain in a variety of ways: the limited apparel exports they retain typically include the most expensive and profitable garments; they export relatively capital-intensive textiles and fibers to their partners in triangle manufacturing networks; and in the case of Japan, it is also a major machinery supplier for apparel factories.9
Figure 7. Fiber and Textile Exports to the World (SITC 26 and 65)
18,000 16,000 14,000 12,000 10,000 8,000

US$ millions

PRC Hong Kong, China Korea Taipei,China

Japan
6,000 4,000 2,000 0

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Japan

Korea

Taipei,China

Hong Kong, China

PRC

The trade-off between apparel versus textile and fiber exports can be seen in the following figures. In 1991, Koreas textile and fiber exports became greater than its worldwide apparel exports, while the crossover point for Taipei,China was several years earlier in 1988 (see Figures 8 and 9). The PRC shows the opposite pattern. It had been a traditional exporter of textile products since the early 1980s, but overseas apparel sales were at a very low level. Once the PRCs apparel exports took off in 1989, they quickly became the leading export item in the countrys textile and apparel sector.

Other developed countries are also important participants at the high-value end of the apparel commodity chain. The US is the primary manufacturer of laser cutting machines found in many advanced garment plants, Germany supplies the chemicals used in textile dyestuffs, Japan has some of the best finishing technology in the world, and of course Europe and the US are home to most of the leading fashion designers in the world.

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Figure 8. Korea: Apparel versus Fiber and Textile Exports


US$ millions
16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

Textiles and Fibers

Apparel

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Fibers and Textiles (SITC 26 & 65) Apparel (SITC 84)

Figure 9. Taipei,China: Apparel versus Fiber and Textile Exports


US$ millions
14,000 12,000 10,000 8,000 6,000 4,000

Textiles and Fibers

Apparel
2,000 0

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Fibers and Textiles (SITC 26 & 65) Apparel (SITC 84)

30

Section VI Conclusion

VI.

Conclusion

This report uses the global commodity chains framework to explain the transformations in production and trade networks, as well as corporate strategies, which have altered the global apparel industry over the past decades and changed the prospects for developing countries to enter and move up these chains. The apparel industry is identified as a buyer-driven commodity chain that contains three types of lead firms: retailers, marketers, and branded manufacturers. As apparel production became globally dispersed and competition between these firms intensified, each type of lead firm developed extensive global sourcing capabilities. While de-verticalizing out of production, they have fortified their activities in the high value-added design and marketing segments of the apparel chain. Industrial upgrading for apparel exporters is primarily associated with the shift from assembly to full-package production. Compared with the mere assembly of imported inputs, fullpackage production fundamentally changes the relationship between buyer and supplier in a direction that gives far more autonomy and learning potential for industrial upgrading to the supplying firm. Full-package production is needed because the retailers and marketers that order the garments do not know how to make them. Particular places such as the PRC and East Asian NIEs of Hong Kong, China; Korea; and Taipei,China have used the full-package role to create an enduring edge in export-oriented development. However, the North American Free Trade Agreement between the US and Mexico, along with a relative decline in the importance of East Asian apparel exports to the US, has now created favorable conditions for the extension of fullpackage production to the North American setting. Prominent apparel suppliers to Europe such as Turkey and several East European economies also appear to be adopting the full-package model. There has been a dramatic consolidation of the retailer segment of buyer-driven commodity chains in the US, and a growth in the strength of retailers versus apparel manufacturers in the European Union and Japan as well. While retailing and marketing are becoming more concentrated, manufacturing is splintering. Because they themselves do not have production experience, however, the retailers in buyer-driven chains are dependent upon the suppliers in their global sourcing networks. In Asia, some manufacturers are integrating forward from specification contracting (the OEM role) to developing and selling their own brands (the OBM role). How does the structure of buyer-driven commodity chains affect industrial upgrading in Asia? First, comparison of apparel imports to the EU and US reveals distinct regional patterns of sourcing. While both source heavily out of Asia, they each have nearby sourcing bases as well: the Caribbean, Central America, and Mexico for the US; and North Africa and East-Central Europe for the EU. More importantly, these different regional supply bases for apparel are organized in terms of different kinds of networks. Intra-Asian sourcing is done on the basis of direct imports and OEM production, while the Caribbean Basin and Mediterranean Basin sourcing patterns both utilize forms of international subcontracting where European and US textiles are sent to nearby low-wage countries for assembly into garments. The possibilities for integrated local

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industrial development are greater in the OEM model where Asian manufacturers have developed an important form of social capital in the guise of multifaceted and dense networks utilized in full-package supply. In the outward-processing or production-sharing assembly pattern, the production networks are anchored in low-cost countries and they do not foster the kinds of local linkages and knowledge transfers that are needed for successful upgrading strategies.

References
AAMA, 1984. Apparel Manufacturing Strategies. American Apparel Manufacturers Association, Arlington, VA. Abernathy, F., H., J. T. Dunlop, j. H. Hammond, and D. Weil, 1999. A Stitch in Time: Lean Retailing and the Transformation of ManufacturingLessons from the Apparel and Textile Industries. New York: Oxford University Press. Akamatsu, K., 1961. A Theory of Unbalanced Growth in the World Economy. Weltwirtschaftliches Archiv 86(2):196-217. Appelbaum, R. P., and G. Gereffi, 1994. Power and Profits in the Apparel Commodity Chain. In E. Bonacich et al., eds., Global Production: The Apparel Industry in the Pacific Rim. Philadelphia, PA: Temple University Press. Appelbaum, R., D. Smith, and B. Christerson, 1994. Commodity Chains and Industrial Restructuring in the Pacific Rim: Garment Trade and Manufacturing. In G. Gereffi and M. Korzeniewicz, eds., Commodity Chains and Global Capitalism. Westport, CT: Praeger. Berger, S., and R. K. Lester, 1997. Made By Hong Kong. New York: Oxford University Press. Bernard, M., and J. Ravenhill, 1995. Beyond Product Cycles and Flying Geese: Regionalization, Hierarchy, and the Industrialization of East Asia. World Politics 47(2, January):171-209. Birnbaum, D., 1993. Importing Garments through Hong Kong. Hong Kong: Third Horizon Press. Chen, X. M., 1994. The Changing Roles of Free Economic Zones in Development: A Comparative Analysis of Capitalist and Socialist Cases in East Asia. Studies in Comparative International Development 29(3, Fall):3-25. De Coster, J., 1996a. Hong Kong and China: The Joining of Two Giants in Textiles and Clothing. Textile Outlook International 68(November):63-79. , 1996b. Productivity: A Key Strategy of the Hong Kong Textile and Clothing Industry. Textile Outlook International 68(November):80-97. Dickerson, K. G., 1995. Textiles and Apparel in the Global Economy, 2nd ed. Englewood Cliffs, NJ: Prentice Hall. Finnie, T. A., 1996. Profile of Levi Strauss, Textile Outlook International 67(September):1037. Gereffi, G., 1994a. The Organization of Buyer-Driven Global Commodity Chains: How U.S. Retailers Shape Overseas Production Networks. In G. Gereffi and M. Korzeniewicz, eds., Commodity Chains and Global Capitalism. Westport, CT: Praeger.

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, 1994b. The International Economy and Economic Development. In N. J. Smelser and R. Swedberg, eds., The Handbook of Economic Sociology. Princeton, NJ: Princeton University Press. , 1995. Global Production Systems and Third World Development. In B. Stallings, ed., Global Change, Regional Response: The New International Context of Development. New York: Cambridge University Press. , 1998. Commodity Chains and Regional Divisions of Labor in East Asia. In E. M. Kim, ed., The Four Asian Tigers: Economic Development and the Global Political Economy. San Diego, CA: Academic Press. , 1999. International Trade and Industrial Upgrading in the Apparel Commodity Chain. Journal of International Economics 48(1, June):37-70. , 2001. Shifting Governance Structures in Global Commodity Chains, with Special Reference to the Internet. American Behavioral Scientist 44(10, June):1616-37. Gereffi, G., and M. Korzeniewicz, eds., 1994. Commodity Chains and Global Capitalism. Westport, CT: Praeger. Granitsas, A., 1998. Back in Fashion: Hong Kongs Leading Garment Makers Are Going Global Learning to Add Value and High Technology. Far Eastern Economic Review 21 May, pages 52-54. ILO, 1995. Recent Developments in the Clothing Industry, Report I. International Labor Organization, Geneva. Japan Textile News, 1996. Japans Distribution and Retail Industry. JTN Quarterly 2(2):1430. Jones, J., 1995. Forces Behind Restructuring in U.S. Apparel Retailing and Its Effect on the U.S. Apparel Industry. Industry, Trade, and Technology Review March:23-7. Khanna, S. R., 1993. Structural Changes in Asian Textiles and Clothing Industries: The Second Migration of Production. Textile Outlook International 49(September):11-32. Management Horizons, 1993. Global Retailing 2000. Columbus, OH: Management Horizons, Division of Price Waterhouse. Miller, J. P., 1997. Sara Lee Plans Fundamental Reshaping. Wall Street Journal 15 September, pages A3, A10. OETH, 1995. The EU Textile and Clothing Industry 1993/94. LObservatoire Europen du Textile et de lHabillement, Brussels. , 1996. The EU Textile and Clothing Industry 1995. LObservatoire Europen du Textile et de lHabillement, Brussels. Ramaswamy, K. V., and G. Gereffi, 2000. Indias Apparel Exports: The Challenge of Global Markets. The Developing Economies 38(2, June):186-210. Scheffer, M., 1994. The Changing Map of European Textiles: Production and Sourcing Strategies of Textile and Clothing Firms. LObservatoire Europen du Textile et de lHabillement, Brussels.

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USITC, 1997. Production Sharing: Use of U.S. Components and Materials in Foreign Assembly Operations, 1992-1995. USITC Publication 3032, United States International Trade Commission, Washington, D.C. USITC. Vernon, R., 1971. Sovereignty at Bay: The Multinational Spread of U.S. Enterprises. New York: Basic Books.

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Asian Footwear Exports to the World, 1990-1998


Value (000) 1990 70,251 100,713 767,448 81,121 600,274 2,147 15 10,219 2,080,970 4,299,569 2,599,417 29,344,690 30,560,152 34,542,364 37,087,784 39,662,904 2,324,091 1,782,600 1,321,058 1,056,703 920,414 43,182,856 3,765,772 3,116,955 2,178,740 1,557,523 1,251,223 2,443,867 4,324,658 5,281,872 5,712,282 6,321,485 13,536 17,718 25,941 37,811 25,813 59 546 15,003 46,424 7,044,628 915,052 835,361 45,331,456 7,425 35,425 164,081 337,036 569,596 923,711 1,027,316 1,354,714 1,690,251 1,881,412 2,048,457 2,244,956 118,297 120,637 146,042 175,880 154,630 174,044 901,645 981,413 1,062,096 1,485,063 2,108,335 1,279,505 1,070,717 172,861 1,557,163 1,434,978 7,686 57,286 8,440,734 618,352 798,355 45,987,640 109,274 122,981 117,565 116,066 107,550 109,126 91,310 86,459 87,879 88,644 90,086 124,167 171,618 168,393 1991 1992 1993 1994 1995 1996 1997 1998 100,531 68,966 894,556 151,487 1,245,152 1,553,106 1,238 54,586 8,413,217 492,153 580,788 42,852,972

85-Footwear

Singapore

Malaysia

Thailand

Philippines

Indonesia

Viet Nam

Lao PDR

Sri Lanka

PRC

Korea, Rep. of

Taipei,China

Total Market

Source: World Trade Analyzer.

35

Asian Footwear Exports to the World, 1980-1989


Value (000) 1980 27,890 25,748 61,652 66,918 3,398 589 1,759 265,368 1,226,614 1,570,311 12,614,094 12,860,705 13,891,462 15,308,648 18,644,308 4,291 286,287 1,617,670 2,387,990 4,255 383,437 2,172,295 3,138,746 6,795 840,579 3,776,579 3,649,604 21,278,204 23,347,734 14,380 21,573 89,316 41,643 10,267 1,284 17,678 23,670 121,485 33,085 13,869 939 49,485 51,121 368,770 46,345 94,358 1,313 1981 1982 1983 1984 1985 1986 1987 1988 1989

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36,442 44,258 18,440 72,410 2,599 2,247 73 227 200,510 929,693 1,509,395 12,284,173 12,118,450 40,107 33,699 45,054 76,400 4,764 897 87 670 264,470 1,058,727 1,502,407 20,522 19,437 76,414 57,125 3,935 1,068 41 2,059 263,594 1,273,344 1,874,509 17,753 20,127 86,886 47,938 5,651 2,545 227 5,055 259,457 1,386,460 2,236,622 35,899 35,985 228,455 61,626 30,628 1,025 6 6,059 537,595 2,864,430 3,250,093 54,747 71,326 511,215 93,519 231,543 4,508 7 7,325 1,170,738 3,590,362 3,316,239 24,712,252

Total Market

85-Footwear

OF

Singapore Malaysia Thailand Philippines Indonesia Viet Nam Lao PDR Sri Lanka PRC Korea, Rep. of Taipei,China

ASIAN ECONOMIES

Total Market

Source: World Trade Analyzer.

IN THE

APPAREL COMMODITY CHAIN

Asian Apparel Exports to the World, 1980-1989


Value (000) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

Total Market

84-Articles of apparel 449,621 166,013 289,406 301,133 559,459 13,278 763 117,119 1,668,701 3,131,928 2,588,770 39,621,244 40,958,688 40,534,432 40,260,256 45,979,564 48,475,848 61,719,896 78,316,056 478,643 169,421 358,749 363,667 539,986 7,633 122 157,470 2,156,216 3,994,850 2,952,478 480,633 191,128 400,294 329,045 600,230 9,333 398 177,338 2,423,137 3,999,981 3,081,540 487,759 224,377 424,890 332,111 618,998 11,710 154 208,787 2,674,648 3,819,838 3,083,658 564,379 300,840 569,398 256,974 825,467 5,433 19 301,799 2,601,203 4,606,743 3,865,885 560,433 348,086 610,715 283,842 916,227 9,558 64 297,217 2,091,780 4,679,101 3,711,103 707,999 436,926 875,652 310,258 1,224,812 16,377 11 346,563 3,187,987 5,786,021 4,486,549 1,025,049 636,673 1,560,247 1,026,840 1,548,496 18,364 975 440,109 3,999,214 7,828,907 5,200,450 1,251,092 850,819 1,971,109 450,572 1,803,501 12,888 1,322 438,849 6,834,082 9,027,099 4,953,923 87,092,096

Singapore Malaysia Thailand Philippines Indonesia Viet Nam Lao PDR Sri Lanka PRC Korea, Rep. of Taipei,China

1,430,169 1,111,016 2,541,611 1,413,960 2,282,740 40,354 2,235 485,977 6,508,606 9,545,183 5,003,225 95,594,592

Total Market

Source: World Trade Analyzer.

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Asian Apparel Exports to the World, 1990-1998


Value (000) 1991 1992 1993 1994 1995 1996 1997 1998

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1,629,830 1,368,369 2,913,992 707,499 2,877,551 70,268 6,061 669,028 10,171,138 8,267,355 4,157,777 110,603,840 123,308,736 142,272,176 144,334,544 155,618,016 169,421,280 177,353,440 194,489,920 1,775,437 1,577,536 3,767,524 732,749 3,495,153 141,593 23,837 1,098,615 13,323,887 7,711,115 4,775,267 1,847,190 1,944,983 3,892,924 876,553 4,536,456 353,801 37,176 1,236,082 17,507,480 7,053,023 4,252,373 1,574,616 2,012,754 4,306,425 890,027 4,762,825 509,704 57,835 1,390,611 19,285,610 6,376,972 3,858,928 1,514,352 2,076,408 4,542,371 924,794 4,474,366 663,892 69,125 1,484,394 23,813,792 5,694,152 3,669,574 1,468,076 2,281,224 5,091,695 1,097,184 4,850,029 872,334 87,898 1,143,135 24,291,622 5,002,794 3,510,034 1,432,537 2,464,673 3,892,040 2,493,329 5,377,239 1,153,714 120,362 1,928,273 26,314,076 4,357,567 3,401,981 1,515,182 2,398,762 3,806,448 1,235,549 4,880,421 1,335,708 108,984 2,165,102 32,925,922 4,289,479 3,603,811 1,457,920 2,378,842 3,439,952 2,425,825 4,471,542 1,310,541 108,408 2,270,185 31,362,714 4,784,791 3,441,438 198,275,472

84-Articles of apparel 1990

OF

Singapore Malaysia Thailand Philippines Indonesia Viet Nam Lao PDR Sri Lanka PRC Korea, Rep. of Taipei,China

ASIAN ECONOMIES

Total Market

Source: World Trade Analyzer.

IN THE

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Pacific Trade and Development Conference Seiji Naya, March 1983 A Survey of Empirical Studies on Demand for Electricity with Special Emphasis on Price Elasticity of Demand Wisarn Pupphavesa, June 1983 Determinants of Paddy Production in Indonesia: 1972-1981A Simultaneous Equation Model Approach T.K. Jayaraman, June 1983 The Philippine Economy: Economic Forecasts for 1983 and 1984 J.M. Dowling, E. Go, and C.N. Castillo, June 1983 Economic Forecast for Indonesia J.M. Dowling, H.Y. Kim, Y.K. Wang, and C.N. Castillo, June 1983 Relative External Debt Situation of Asian Developing Countries: An Application of Ranking Method Jungsoo Lee, June 1983 New Evidence on Yields, Fertilizer Application, and Prices in Asian Rice Production William James and Teresita Ramirez, July 1983 Inflationary Effects of Exchange Rate Changes in Nine Asian LDCs Pradumna B. Rana and J. Malcolm Dowling, Jr., December 1983 Effects of External Shocks on the Balance of Payments, Policy Responses, and Debt Problems of Asian Developing Countries Seiji Naya, December 1983 Changing Trade Patterns and Policy Issues: The Prospects for East and Southeast Asian Developing Countries Seiji Naya and Ulrich Hiemenz, February 1984 Small-Scale Industries in Asian Economic Development: Problems and Prospects Seiji Naya, February 1984 A Study on the External Debt Indicators Applying Logit Analysis Jungsoo Lee and Clarita Barretto, February 1984 Alternatives to Institutional Credit Programs in the Agricultural Sector of Low-Income Countries Jennifer Sour, March 1984 Economic Scene in Asia and Its Special Features Kedar N. Kohli, November 1984 The Effect of Terms of Trade Changes on the Balance of Payments and Real National Income of Asian Developing Countries Jungsoo Lee and Lutgarda Labios, January 1985 Cause and Effect in the World Sugar Market: Some Empirical Findings 1951-1982 Yoshihiro Iwasaki, February 1985 Sources of Balance of Payments Problem in the 1970s: The Asian Experience Pradumna Rana, February 1985 Indias Manufactured Exports: An Analysis of Supply Sectors Ifzal Ali, February 1985 Meeting Basic Human Needs in Asian Developing Countries Jungsoo Lee and Emma Banaria, March 1985 The Impact of Foreign Capital Inflow on Investment and Economic Growth in Developing Asia Evelyn Go, May 1985 The Climate for Energy Development in the Pacific and Asian Region: Priorities and Perspectives V.V. Desai, April 1986 Impact of Appreciation of the Yen on

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Developing Member Countries of the Bank Jungsoo Lee, Pradumna Rana, and Ifzal Ali, May 1986 Smuggling and Domestic Economic Policies in Developing Countries A.H.M.N. Chowdhury, October 1986 Public Investment Criteria: Economic Internal Rate of Return and Equalizing Discount Rate Ifzal Ali, November 1986 Review of the Theory of Neoclassical Political Economy: An Application to Trade Policies M.G. Quibria, December 1986 Factors Influencing the Choice of Location: Local and Foreign Firms in the Philippines E.M. Pernia and A.N. Herrin, February 1987 A Demographic Perspective on Developing Asia and Its Relevance to the Bank E.M. Pernia, May 1987 Emerging Issues in Asia and Social Cost Benefit Analysis I. Ali, September 1988 Shifting Revealed Comparative Advantage: Experiences of Asian and Pacific Developing Countries P.B. Rana, November 1988 Agricultural Price Policy in Asia: Issues and Areas of Reforms I. Ali, November 1988 Service Trade and Asian Developing Economies M.G. Quibria, October 1989 A Review of the Economic Analysis of Power Projects in Asia and Identification of Areas of Improvement I. Ali, November 1989 Growth Perspective and Challenges for Asia: Areas for Policy Review and Research I. Ali, November 1989 An Approach to Estimating the Poverty Alleviation Impact of an Agricultural Project I. Ali, January 1990 Economic Growth Performance of Indonesia, the Philippines, and Thailand: The Human Resource Dimension E.M. Pernia, January 1990 Foreign Exchange and Fiscal Impact of a Project: A Methodological Framework for Estimation I. Ali, February 1990 Public Investment Criteria: Financial and Economic Internal Rates of Return I. Ali, April 1990 Evaluation of Water Supply Projects: An Economic Framework Arlene M. Tadle, June 1990 Interrelationship Between Shadow Prices, Project Investment, and Policy Reforms: An Analytical Framework I. Ali, November 1990 Issues in Assessing the Impact of Project and Sector Adjustment Lending I. Ali, December 1990 Some Aspects of Urbanization and the Environment in Southeast Asia Ernesto M. Pernia, January 1991 Financial Sector and Economic Development: A Survey Jungsoo Lee, September 1991 A Framework for Justifying Bank-Assisted Education Projects in Asia: A Review of the Socioeconomic Analysis and Identification of Areas of Improvement Etienne Van De Walle, February 1992 Medium-term Growth-Stabilization Relationship in Asian Developing Countries and Some Policy Considerations

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Yun-Hwan Kim, February 1993 Urbanization, Population Distribution, and Economic Development in Asia Ernesto M. Pernia, February 1993 The Need for Fiscal Consolidation in Nepal: The Results of a Simulation Filippo di Mauro and Ronald Antonio Butiong, July 1993 A Computable General Equilibrium Model of Nepal Timothy Buehrer and Filippo di Mauro, October 1993 The Role of Government in Export Expansion in the Republic of Korea: A Revisit Yun-Hwan Kim, February 1994 Rural Reforms, Structural Change, and Agricultural Growth in the Peoples Republic of China

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Bo Lin, August 1994 Incentives and Regulation for Pollution Abatement with an Application to Waste Water Treatment Sudipto Mundle, U. Shankar, and Shekhar Mehta, October 1995 Saving Transitions in Southeast Asia Frank Harrigan, February 1996 Total Factor Productivity Growth in East Asia: A Critical Survey Jesus Felipe, September 1997 Foreign Direct Investment in Pakistan: Policy Issues and Operational Implications Ashfaque H. Khan and Yun-Hwan Kim, July 1999 Fiscal Policy, Income Distribution and Growth Sailesh K. Jha, November 1999

ECONOMIC STAFF PAPERS (ES)

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International Reserves: Factors Determining Needs and Adequacy Evelyn Go, May 1981 Domestic Savings in Selected Developing Asian Countries Basil Moore, assisted by A.H.M. Nuruddin Chowdhury, September 1981 Changes in Consumption, Imports and Exports of Oil Since 1973: A Preliminary Survey of the Developing Member Countries of the Asian Development Bank Dal Hyun Kim and Graham Abbott, September 1981 By-Passed Areas, Regional Inequalities, and Development Policies in Selected Southeast Asian Countries William James, October 1981 Asian Agriculture and Economic Development William James, March 1982 Inflation in Developing Member Countries: An Analysis of Recent Trends A.H.M. Nuruddin Chowdhury and J. Malcolm Dowling, March 1982 Industrial Growth and Employment in Developing Asian Countries: Issues and Perspectives for the Coming Decade Ulrich Hiemenz, March 1982 Petrodollar Recycling 1973-1980. Part 1: Regional Adjustments and the World Economy Burnham Campbell, April 1982 Developing Asia: The Importance of Domestic Policies Economics Office Staff under the direction of Seiji Naya, May 1982 Financial Development and Household Savings: Issues in Domestic Resource Mobilization in Asian Developing Countries Wan-Soon Kim, July 1982 Industrial Development: Role of Specialized Financial Institutions Kedar N. Kohli, August 1982 Petrodollar Recycling 1973-1980. Part II: Debt Problems and an Evaluation of Suggested Remedies Burnham Campbell, September 1982 Credit Rationing, Rural Savings, and Financial Policy in Developing Countries William James, September 1982

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Small and Medium-Scale Manufacturing Establishments in ASEAN Countries: Perspectives and Policy Issues Mathias Bruch and Ulrich Hiemenz, March 1983 Income Distribution and Economic Growth in Developing Asian Countries J. Malcolm Dowling and David Soo, March 1983 Long-Run Debt-Servicing Capacity of Asian Developing Countries: An Application of Critical Interest Rate Approach Jungsoo Lee, June 1983 External Shocks, Energy Policy, and Macroeconomic Performance of Asian Developing Countries: A Policy Analysis William James, July 1983 The Impact of the Current Exchange Rate System on Trade and Inflation of Selected Developing Member Countries Pradumna Rana, September 1983 Asian Agriculture in Transition: Key Policy Issues William James, September 1983 The Transition to an Industrial Economy in Monsoon Asia Harry T. Oshima, October 1983 The Significance of Off-Farm Employment and Incomes in Post-War East Asian Growth Harry T. Oshima, January 1984 Income Distribution and Poverty in Selected Asian Countries John Malcolm Dowling, Jr., November 1984 ASEAN Economies and ASEAN Economic Cooperation Narongchai Akrasanee, November 1984 Economic Analysis of Power Projects Nitin Desai, January 1985 Exports and Economic Growth in the Asian Region Pradumna Rana, February 1985 Patterns of External Financing of DMCs E. Go, May 1985 Industrial Technology Development the Republic of Korea S.Y. Lo, July 1985 Risk Analysis and Project Selection: A Review of Practical Issues J.K. Johnson, August 1985 Rice in Indonesia: Price Policy and Comparative Advantage I. Ali, January 1986 Effects of Foreign Capital Inflows

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on Developing Countries of Asia Jungsoo Lee, Pradumna B. Rana, and Yoshihiro Iwasaki, April 1986 Economic Analysis of the Environmental Impacts of Development Projects John A. Dixon et al., EAPI, East-West Center, August 1986 Science and Technology for Development: Role of the Bank Kedar N. Kohli and Ifzal Ali, November 1986 Satellite Remote Sensing in the Asian and Pacific Region Mohan Sundara Rajan, December 1986 Changes in the Export Patterns of Asian and Pacific Developing Countries: An Empirical Overview Pradumna B. Rana, January 1987 Agricultural Price Policy in Nepal Gerald C. Nelson, March 1987 Implications of Falling Primary Commodity Prices for Agricultural Strategy in the Philippines Ifzal Ali, September 1987 Determining Irrigation Charges: A Framework Prabhakar B. Ghate, October 1987 The Role of Fertilizer Subsidies in Agricultural Production: A Review of Select Issues M.G. Quibria, October 1987 Domestic Adjustment to External Shocks in Developing Asia Jungsoo Lee, October 1987 Improving Domestic Resource Mobilization through Financial Development: Indonesia Philip Erquiaga, November 1987 Recent Trends and Issues on Foreign Direct Investment in Asian and Pacific Developing Countries P.B. Rana, March 1988 Manufactured Exports from the Philippines: A Sector Profile and an Agenda for Reform I. Ali, September 1988 A Framework for Evaluating the Economic Benefits of Power Projects I. Ali, August 1989 Promotion of Manufactured Exports in Pakistan Jungsoo Lee and Yoshihiro Iwasaki, September 1989 Education and Labor Markets in Indonesia: A Sector Survey Ernesto M. Pernia and David N. Wilson, September 1989 Industrial Technology Capabilities and Policies in Selected ADCs

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Hiroshi Kakazu, June 1990 Designing Strategies and Policies for Managing Structural Change in Asia Ifzal Ali, June 1990 The Completion of the Single European CommuMarket in 1992: A Tentative Assessment of its Impact on Asian Developing Countries J.P. Verbiest and Min Tang, June 1991 Economic Analysis of Investment in Power Ifzal Ali, June 1991 External Finance and the Role of Multilateral Financial Institutions in South Asia: Changing Patterns, Prospects, and Challenges Jungsoo Lee, November 1991 The Gender and Poverty Nexus: Issues and Policies M.G. Quibria, November 1993 The Role of the State in Economic Development: Theory, the East Asian Experience, and the Malaysian Case Jason Brown, December 1993 The Economic Benefits of Potable Water Supply Projects to Households in Developing Countries Dale Whittington and Venkateswarlu Swarna, January 1994 Growth Triangles: Conceptual Issues and Operational Problems Min Tang and Myo Thant, February 1994 The Emerging Global Trading Environment and Developing Asia Arvind Panagariya, M.G. Quibria, and Narhari Rao, July 1996 Aspects of Urban Water and Sanitation in the Context of Rapid Urbanization in Developing Asia Ernesto M. Pernia and Stella LF. Alabastro, September 1997 Challenges for Asias Trade and Environment Douglas H. Brooks, January 1998 Economic Analysis of Health Sector ProjectsA Review of Issues, Methods, and Approaches Ramesh Adhikari, Paul Gertler, and Anneli Lagman, March 1999 The Asian Crisis: An Alternate View Rajiv Kumar and Bibek Debroy, July 1999 Social Consequences of the Financial Crisis in Asia James C. Knowles, Ernesto M. Pernia, and Mary Racelis, November 1999

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OCCASIONAL PAPERS (OP)


No. 1 Poverty in the Peoples Republic of China: Recent Developments and Scope for Bank Assistance K.H. Moinuddin, November 1992 The Eastern Islands of Indonesia: An Overview of Development Needs and Potential Brien K. Parkinson, January 1993 Rural Institutional Finance in Bangladesh and Nepal: Review and Agenda for Reforms A.H.M.N. Chowdhury and Marcelia C. Garcia, November 1993 Fiscal Deficits and Current Account Imbalances of the South Pacific Countries: A Case Study of Vanuatu T.K. Jayaraman, December 1993 No. 5 No. 6 Reforms in the Transitional Economies of Asia Pradumna B. Rana, December 1993 Environmental Challenges in the Peoples Republic of China and Scope for Bank Assistance Elisabetta Capannelli and Omkar L. Shrestha, December 1993 Sustainable Development Environment and Poverty Nexus K.F. Jalal, December 1993 Intermediate Services and Economic Development: The Malaysian Example Sutanu Behuria and Rahul Khullar, May 1994 Interest Rate Deregulation: A Brief Survey of the Policy Issues and the Asian Experience Carlos J. Glower, July 1994

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Some Aspects of Land Administration in Indonesia: Implications for Bank Operations Sutanu Behuria, July 1994 Demographic and Socioeconomic Determinants of Contraceptive Use among Urban Women in the Melanesian Countries in the South Pacific: A Case Study of Port Vila Town in Vanuatu T.K. Jayaraman, February 1995 Managing Development through Institution Building Hilton L. Root, October 1995 Growth, Structural Change, and Optimal Poverty Interventions Shiladitya Chatterjee, November 1995 Private Investment and Macroeconomic Environment in the South Pacific Island Countries: A Cross-Country Analysis T.K. Jayaraman, October 1996 The Rural-Urban Transition in Viet Nam: Some Selected Issues Sudipto Mundle and Brian Van Arkadie, October 1997 A New Approach to Setting the Future Transport Agenda

No. 17

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No. 22

Roger Allport, Geoff Key, and Charles Melhuish June 1998 Adjustment and Distribution: The Indian Experience Sudipto Mundle and V.B. Tulasidhar, June 1998 Tax Reforms in Viet Nam: A Selective Analysis Sudipto Mundle, December 1998 Surges and Volatility of Private Capital Flows to Asian Developing Countries: Implications for Multilateral Development Banks Pradumna B. Rana, December 1998 The Millennium Round and the Asian Economies: An Introduction Dilip K. Das, October 1999 Occupational Segregation and the Gender Earnings Gap Joseph E. Zveglich, Jr. and Yana van der Meulen Rodgers, December 1999 Information Technology: Next Locomotive of Growth? Dilip K. Das, June 2000

STATISTICAL REPORT SERIES (SR)


No. 1 Estimates of the Total External Debt of the Developing Member Countries of ADB: 1981-1983 I.P. David, September 1984 Multivariate Statistical and Graphical Classification Techniques Applied to the Problem of Grouping Countries I.P. David and D.S. Maligalig, March 1985 Gross National Product (GNP) Measurement Issues in South Pacific Developing Member Countries of ADB S.G. Tiwari, September 1985 Estimates of Comparable Savings in Selected DMCs Hananto Sigit, December 1985 Keeping Sample Survey Design and Analysis Simple I.P. David, December 1985 External Debt Situation in Asian Developing Countries I.P. David and Jungsoo Lee, March 1986 Study of GNP Measurement Issues in the South Pacific Developing Member Countries. Part I: Existing National Accounts of SPDMCsAnalysis of Methodology and Application of SNA Concepts P. Hodgkinson, October 1986 Study of GNP Measurement Issues in the South Pacific Developing Member Countries. Part II: Factors Affecting Intercountry Comparability of Per Capita GNP P. Hodgkinson, October 1986 Survey of the External Debt Situation in Asian Developing Countries, 1985 Jungsoo Lee and I.P. David, April 1987 A Survey of the External Debt Situation in Asian Developing Countries, 1986 Jungsoo Lee and I.P. David, April 1988 Changing Pattern of Financial Flows to Asian and Pacific Developing Countries Jungsoo Lee and I.P. David, March 1989 The State of Agricultural Statistics in Southeast Asia I.P. David, March 1989 A Survey of the External Debt Situation in Asian and Pacific Developing Countries: 1987-1988 Jungsoo Lee and I.P. David, July 1989 A Survey of the External Debt Situation in Asian and Pacific Developing Countries: 1988-1989 Jungsoo Lee, May 1990 A Survey of the External Debt Situation in Asian and Pacific Developing Countrie s: 1989-1992 Min Tang, June 1991 Recent Trends and Prospects of External Debt Situation and Financial Flows to Asian and Pacific Developing Countries Min Tang and Aludia Pardo, June 1992 Purchasing Power Parity in Asian Developing Countries: A Co-Integration Test Min Tang and Ronald Q. Butiong, April 1994 Capital Flows to Asian and Pacific Developing Countries: Recent Trends and Future Prospects Min Tang and James Villafuerte, October 1995

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SPECIAL STUDIES, COMPLIMENTARY (SSC) (Published in-house; Available through ADB Office of External Relations; Free of Charge)
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Improving Domestic Resource Mobilization Through Financial Development: Overview September 1985 Improving Domestic Resource Mobilization Through Financial Development: Bangladesh July 1986 Improving Domestic Resource Mobilization Through Financial Development: Sri Lanka April 1987 Improving Domestic Resource Mobilization Through Financial Development: India December 1987 Financing Public Sector Development Expenditure in Selected Countries: Overview January 1988 Study of Selected Industries: A Brief Report April 1988 Financing Public Sector Development Expenditure in Selected Countries: Bangladesh June 1988 Financing Public Sector Development Expenditure in Selected Countries: India June 1988 Financing Public Sector Development Expenditure in Selected Countries: Indonesia June 1988 Financing Public Sector Development Expenditure in Selected Countries: Nepal June 1988 Financing Public Sector Development Expenditure in Selected Countries: Pakistan June 1988 Financing Public Sector Development Expenditure in Selected Countries: Philippines June 1988 Financing Public Sector Development Expenditure in Selected Countries: Thailand June 1988 Towards Regional Cooperation in South Asia: ADB/EWC Symposium on Regional Cooperation in South Asia February 1988 Evaluating Rice Market Intervention Policies: Some Asian Examples April 1988 Improving Domestic Resource Mobilization Through Financial Development: Nepal November 1988 Foreign Trade Barriers and Export Growth September 1988 18. The Role of Small and Medium-Scale Industries in the Industrial Development of the Philippines April 1989 19. The Role of Small and Medium-Scale Manufacturing Industries in Industrial Development: The Experience of Selected Asian Countries January 1990 20. National Accounts of Vanuatu, 1983-1987 January 1990 21. National Accounts of Western Samoa, 1984-1986 February 1990 22. Human Resource Policy and Economic Development: Selected Country Studies July 1990 23. Export Finance: Some Asian Examples September 1990 24. National Accounts of the Cook Islands, 1982-1986 September 1990 25. Framework for the Economic and Financial Appraisal of Urban Development Sector Projects January 1994 26. Framework and Criteria for the Appraisal and Socioeconomic Justification of Education Projects January 1994 27. Guidelines for the Economic Analysis of Projects February 1997 28. Investing in Asia 1997 29. Guidelines for the Economic Analysis of Telecommunication Projects 1998 30. Guidelines for the Economic Analysis of Water Supply Projects 1999

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SPECIAL STUDIES, ADB (SS, ADB) (Published in-house; Available commercially through ADB Office of External Relations)
1. Rural Poverty in Developing Asia Edited by M.G. Quibria Vol. 1: Bangladesh, India, and Sri Lanka, 1994 $35.00 (paperback) Vol. 2: Indonesia, Republic of Korea, Philippines, and Thailand, 1996 $35.00 (paperback) External Shocks and Policy Adjustments: Lessons from the Gulf Crisis Edited by Naved Hamid and Shahid N. Zahid, 1995 $15.00 (paperback) Gender Indicators of Developing Asian and Pacific Countries Asian Development Bank, 1993 $25.00 (paperback) Urban Poverty in Asia: A Survey of Critical Issues Edited by Ernesto Pernia, 1994 $20.00 (paperback) Indonesia-Malaysia-Thailand Growth Triangle: Theory to Practice Edited by Myo Thant and Min Tang, 1996 $15.00 (paperback) Emerging Asia: Changes and Challenges Asian Development Bank, 1997 $30.00 (paperback) Asian Exports Edited by Dilip Das, 1999 $35.00 (paperback) $55.00 (hardbound) Mortgage-Backed Securities Markets in Asia Edited by S.Ghon Rhee & Yutaka Shimomoto, 1999 $35.00 (paperback) 9. Corporate Governance and Finance in East Asia: A Study of Indonesia, Republic of Korea, Malaysia, Philippines and Thailand J. Zhuang, David Edwards, D. Webb, & Ma. Virginita Capulong Vol. 1, 2000 $10.00 (paperback) Vol. 2, 2001 $15.00 (paperback) 10. Financial Management and Governance Issues Asian Development Bank, 2000 Cambodia $10.00 (paperback) Peoples Republic of China $10.00 (paperback) Mongolia $10.00 (paperback) Pakistan $10.00 (paperback) Papua New Guinea $10.00 (paperback) Uzbekistan $10.00 (paperback) Viet Nam $10.00 (paperback) Selected Developing Member Countries $10.00 (paperback) 11. Guidelines for the Economic Analysis of Projects Asian Development Bank, 1997 $10.00 (paperback) 12. Handbook for the Economic Analysis of Water Supply Projects Asian Development Bank, 1999 $15.00 (hardbound) 13. Handbook for the Economic Analysis of Health Sector Projects Asian Development Bank, 2000 $10.00 (paperback)

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Informal Finance: Some Findings from Asia Prabhu Ghate et. al., 1992 $15.00 (paperback) Mongolia: A Centrally Planned Economy in Transition Asian Development Bank, 1992 $15.00 (paperback) Rural Poverty in Asia, Priority Issues and Policy Options Edited by M.G. Quibria, 1994 $25.00 (paperback) Growth Triangles in Asia: A New Approach to Regional Economic Cooperation Edited by Myo Thant, Min Tang, and Hiroshi Kakazu 1st ed., 1994 $36.00 (hardbound) Revised ed., 1998 $55.00 (hardbound) Urban Poverty in Asia: A Survey of Critical Issues Edited by Ernesto Pernia, 1994 $18.00 (paperback) Critical Issues in Asian Development: Theories, Experiences, and Policies Edited by M.G. Quibria, 1995 $15.00 (paperback) $36.00 (hardbound) From Centrally Planned to Market Economies: The Asian Approach Edited by Pradumna B. Rana and Naved Hamid, 1995 Vol. 1: Overview $36.00 (hardbound) Vol. 2: Peoples Republic of China and Mongolia $50.00 (hardbound)

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