FAMILY TEXTILE FIRMS IN ASIA.   Term Paper ID:23558 Click to get this paper

Essay Subject: Small, family-run textile firms in Indonesia, Taiwan & China. Productivity, techniques, exports, incentives, role of govt.... More...

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Paper Abstract: Small, family-run textile firms in Indonesia, Taiwan & China. Productivity, techniques, exports, incentives, role of govt. Paper Introduction: Asian Textile Production by Small, Family-Run Enterprises This research examines the approach to textile production by small, family-run enterprises in Asian countries. Three countries provide the focus of this examination: Indonesia, Taiwan, and the People’s Republic of China (PRC). The situations in Indonesia and Taiwan are reviewed first, and the review of the situation in the PRC is presented in a separate discussion because of the socialist influence on economic organization in that country. Textiles and apparel are companion industries (Murray 62). The textiles industry produces base products such as threads, yarn, and cordage and woven fabrics, carpets, and rugs. By contrast, the apparel industry produces finished clothing products made from base fabrics. The apparel industry tends to be m Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Most of these factories are small, family-run enterprises.Indonesia imports the materials (cotton and so forth) used to producetextiles. Members of the association shareexperience in promoting brand image and establishing a group identity forpurposes of promoting their products. The defining characteristics of both EPZs and EPFs are similar(Amirahmadi and Wu 831). 1994): 58-57.Murray, L. "Unraveling Employment Trends in Textiles and Apparel." Monthly Labor Review 118 (Aug. "Income Distribution in East Asian Developing Countries." Asian-Pacific Economic Literature 8 (Feb. Rather, their participation is determinedby their residency and mandated by the community government. By contrast, the apparel industryproduces finished clothing products made from base fabrics. Textiles and apparel are companion industries (Murray 62). Nevertheless, the TVE represents anevolutionary change in the PRC. An EPZ can bedefined as an industrial enclave that engages in export manufacturing andreceives preferential benefits that generally are not available in otherareas of the country (Amirahmadi and Wu 829). Indonesia is a populous country-approximately 2 million in 1995,with a low per capital annual income (gross domestic product-GDP)-US$68 in1992 (Hunter 765). 1993: 62."It's Very Well Made in Taiwan." Nation's Business Jan. The family-runenterprises suffered the most because they had no substantial resources inreserve. Next, areas dyed with the first colorare waxed over, and wax will be scraped off areas to receive the secondcolor. The marketers of the output of the family-runenterprises were made eligible for government export subsidies, while thefamily-run enterprises were further protected through the imposition oftariffs on textiles imported into Indonesia. A Different Transition Path: Ownership, Performance, and Influence of Chinese Rural Industrial Enterprises. "Indonesia's Clothing and Textile Exports After the Petroleum Boom." Diss. When the cloth goes into itsfirst dye bath, all areas of the design that will not be that color arecovered with wax to resist the dye. New York: Garland, 1995. "The Rise of China As An Economic Power." National Institute Economic Review (Feb. The situations in Indonesia and Taiwan are reviewed first,and the review of the situation in the PRC is presented in a separatediscussion because of the socialist influence on economic organization inthat country. Martin's, 1996."Indonesia's Ripping Yarn." Economist 9 Jan. For Indonesia, the world's fourth-most populous country, boosting thetextile industry is a key part of a national economic strategy targetingaccelerated industrialization ("Indonesia's Ripping" 62). Another type of custom-free manufacturing that has been introduced isthe Export Processing Factory (EPF), or Custom Bonded Factory (CBF), whichproduces exports and receives preferential treatment irrespective oflocation within a country (Amirahmadi and Wu 829). A key to thecompetitive success of Indonesia's family-run textile enterprises is thelow level of labor costs in the country. The share of the TVE sector became second largestafter the state sector in the mid-198 s, and the remaining gap shrankrapidly. Works CitedAmirahmadi, H., and W. The fabric is made by a method of wax-resistantdyeing developed to the level of a high art in Indonesia over the past 4 years. The most prized designs use thousands of minute dots for detail.The second method, introduced in the mid-nineteenth century, uses a stamp-block known as a cap (pronounced chop), made of copper sheet and rod.Artisans dip the cap in a basin of melted wax, then apply the design overand over. Asian Textile Production by Small, Family-Run Enterprises This research examines the approach to textile production by small,family-run enterprises in Asian countries. Both EPZs and EPFs tend to be characterized by a high degree ofindustrial mono-culture, which means that most firms operating within anysingle EPZ or EPF most often will be participating in the same industry.Thus, in both Indonesia and Taiwan, EPZs and EPFs exist wherein almost allof the firms are textile operations. Indonesia is a traditional exporter of textile products (Hughes 88).Textile production in Indonesia has long been dominated by the small,family-run enterprise. While the EPF concepthas been introduced in both Indonesia and Taiwan, it is found morefrequently in Indonesia's sprawling islands. The apparelindustry tends to be more labor-intensive than does the textiles industry.These companion industries are treated as a single industry in thisresearch. In contrast, more flamboyantly colored patterns, with motifs ranging fromChinese dragons to Victorian-looking swans and peonies, derive from Java'snorth coast. The customs-free characteristic is important for family-run textile enterprises in both Indonesia and Taiwan, as otherwise theseenterprises would be required to pay tariffs on the imported yarns theyweave into textile fabrics. Official residency is enforcedby the household registration system. A TVE is a collectively-owned communalenterprise located in a township or a village (Goodhard and Xu 56). Between dyebaths, the cloth is soaked in a lye solution to set the color. The Republic of China (Taiwan) is an island nation with a populationof 21 million in 1995 and a relatively high per capital annual income (GDP)-US$1 , in 1992 (Hunter 369). Textiles are second only to oilas a foreign exchange earner for Indonesia ("Indonesia's Ripping" 62). Artists use a canting (pronounced chanting), a bamboo-handled tool with a small copper bowl to fill with melted wax. "Export Processing Zones in Asia." Asian Survey 35 (Sept. Three countries-Indonesia,Taiwan, and the PRC-provided the focus of this examination. The approach in the PRC necessarily was different from those ofIndonesia and Taiwan because that country's economy has been characterizedby state-owned enterprise (SOE) since 1949 (Goodhard and Xu 56). 1989): 1-8.Goodhart, C., and C. Weaving yarns are a leading import product in Indonesia, whiletextile fabrics and apparel are major export goods. "Chinese Township-Village Enterprise." (Translated). All of them seek to promote employment, promote exports, and,in the case of the EPZs, promote foreign investment. Indonesia's small, family-run textile enterprises are especiallysuited to the production of batik, the profusely patterned fabric that isidentified with Indonesia. The EPZ concept is used in bothIndonesia and Taiwan, and family-run textile enterprises are prominentamong the firms found in EPZs in each of these countries. The waxdrips out through one or multiple spouts to create the design in wax linesor dots. With the intensification of global competition, however,the export markets for Indonesian textiles grew smaller. When foreign textiles began to be imported into Indonesia, thesituation worsened for the family-run enterprise. National Centre for Development Studies, Australian National U, 1993.Xu, C. As a result, Taiwan textileenterprises generally cannot mount large advertising campaigns to promotetheir products. Weaving yarns are a leading import product in Taiwan, whiletextile fabrics and apparel are major export goods. Thistradition has influenced the development in Taiwan of textile firms that,"while dynamic and innovative, are small or medium-sized by most of theworld's standards" ("It's Very" 32). The first, called tulis, is more intricate, and the resultsare more expensive. Common grades arebiru (slightly coarse), prima (finer textured), and primissima (fine andsmooth-surfaced). The Export Processing Zone (EPZ) is perhaps the most common form inwhich this strategy has been implemented. Three countries provide thefocus of this examination: Indonesia, Taiwan, and the People's Republic ofChina (PRC). "Why Have East Asian Countries Led Economic Development?" Economic Record 71 (Mar. Xu. This characteristic also istypical of family-run textile enterprises in both Indonesia and Taiwan. The TVE has beenthe most important engine driving the unprecedented growth of the Chineseeconomy during the last 15 years. Eventually, however, theIndonesian government implemented an export-driven strategy that wasdesigned to make the family-run textile enterprises more competitive. This research examined the approach to textile production by small,family-run enterprises in Asian countries. For small colorareas, dye is sometimes painted on by hand. Most batik is cotton. A. The Statesman's Year-Book 1996-1997. Eachmajor color requires a separate step of waxing and dyeing. The property rightsof the TVE can only be exercised collectively through communityrepresentatives. 1995): 88-1 4.Hunter, B. Batik is produced in indigo blues, Ming yellows, creamy tans,earthy reds, and pretty pastels. 1995): 828-849.Chen, Y. Successes are being achieved in each country. The Indonesian government acted to provide protection for family-runtextile producers through the implementation of an import-substitutionprogram (Saad 93). Indonesia has more than 2, textile factories (Hunter768). Many of these factories are small, family-run enterprises.Taiwan imports the materials (cotton and so forth) used to producetextiles. The marketers of the output ofthe family-run enterprises were made eligible for government exportsubsidies, while the family-run enterprises were further protected throughthe imposition of tariffs on textiles imported into Indonesia. Each of thethree countries has moved toward systems that promote exports of textileproducts through the provision of incentives to family-run (village- orcommunity-run in the case of the PRC) enterprises engaged in textileproduction. The most frequent industrial activities found in EPZs and EPFs in bothIndonesia and Taiwan are in electronics and textiles (Amirahmadi and Wu837). Asmost TVEs are in the industrial sector, they are often treated assynonymous with rural industrial firms. In 1976, at the end of the Cultural Revolution,employment in this sector had risen to 17.9 million, with about 5 percentof gross social product (GSP), or 11.2 percent of the national income (NI)(Xu 95). Residency isdefined either by family ties, such as parental/marital relationship orother kinship, or by authorized migration. New York: St. The community is deeply involved in governing the TVE's operations(Goodhard and Xu 57). Sometimes, a dozen colors are applied to the fabric. Industry concentration rates intextile-dominant EPZs and EPFs typically approximate 8 percent.Industries located in EPZs and EPFs in both Indonesia and Taiwan tend to belabor-intensive (Amirahmadi and Wu 84 ). Producing atwo-square-yard piece of batik with an intricate multicolored design cantake a year or more. As also wastrue in Indonesia, however, eventually the Taiwanese government implementedan export-driven strategy that was designed to make the family-run textileenterprises more competitive. Both tulis and cap batiks are colored through similar processes. Wu. Regardless of the seemingly diffuse and unclearownership structure, TVEs have been enormously successful in the PRC.Their growth and performance are outstanding. (Ed.). Larger textile firms in Indonesia traditionally have handled themarketing of the output of the family-run textile producers in Indonesia(Krongkaew 58). MostEPZs and EPFs are spatial enclaves located next to major ports (Amirahmadiand Wu 831). Thus, theownership of the TVE is linked with the residency of the community(township or village). In a typical case, the collective owners do not have clearly definedshares as the term is normally understood (Goodhart and Hu 74).Participation in the TVE is not a decision made by the residentsvoluntarily and independently. All the residents of the townshipor village that has established the TVE own the firm. The phenomenal growth of TVEs wasneither planned nor expected by the Chinese central government (Chen 1).Before 1984, TVEs were known as collectively-owned commune-brigadeenterprises (CBEs), which were introduced in the "Great Leap forward."CBEs developed alongside the increasing power of local governments in the197 s and increased their share in the gross national product (GNP) byabout 1 percent annually. One problem faced by the family-run textile enterprises in Indonesiais that productivity in the Indonesian textile factories is lower than theproductivity of textile factories in Taiwan ("Indonesia's Ripping" 62).This lower productivity tends to offset the lower labor cost advantage ofthe Indonesian textile producers. 1996): 56-8 .Hughes, H. Zhongguo Xiangzhen Qiye (People's Republic of China) 9 (Sept. As a partof the economic reform program in the PRC, however, the governmentintroduced the township-village enterprise (TVE) system. Since the 196 s, many developing countries have implemented export-oriented growth strategies that provide for customs-free manufacturing topromote industrialization and to earn foreign exchange (Amirahmadi and Wu829). As the globalization of the international economyintensified, however, Indonesia found that its family-run textileproduction enterprises not only were encountering difficulties in theexport markets, but also were facing intensified competition from textilesbeing imported into Indonesia. 1995): 62-72.Saad, I. Chinese culture stresses individualism ("It's Very" 32). The TVE sector has been much more efficient than the statesector, as measured by total factor productivity. The TVE concept has been applied widely in the production of textilesin the PRC (Goodhart and Xu 57). This performance largelyaccounts for the difference between the growth rate for industry as a wholeand that of the SOEs. Batiks in the traditional style of central Java are mainly indigo blue-black and brown; secondary colors are deep red and brownish yellow.Designs tend to be geometric, even when they incorporate flowers and birds. Taiwan has hundreds of textile factories(Hunter 767). Thetextiles industry produces base products such as threads, yarn, and cordageand woven fabrics, carpets, and rugs. The two basic methods of applying designs in wax are by hand drawingand by stamp. Textile production operations account for21.4 percent of all TVEs in the PRC. Both are customs-free and export-orientedmanufacturing areas and are provided with preferential incentives andstreamlined administration and are equipped with better infrastructure andcheap utilities. In 1984, after the dissolution of the people's commune system,the CBEs were renamed township-village enterprises (TVEs). The EPF concept is especiallyuseful for Indonesia's family-run textile enterprises. As was true of Indonesia, the Taiwanese government acted to provideprotection for family-run textile producers through the implementation ofan import-substitution program (Saad 93). Leaving and joining a community means giving up andgaining ownership of the assets of the community's firms. Many of Taiwan's family-run textile firms, however, aretrying to meet this marketing challenge by joining under the umbrella of anindustry marketing association. Avoiding tariffs causes the output of thefamily-run textile enterprises based in EPZs and EPFs to be morecompetitively in export markets than otherwise would be the case. Primissima may be priced at double the price of biru.Silk batik may be priced up to six times more than cotton types. 1993: 29-34.Krongkaew, M. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.