Export Conditions of the Chinese Textile Industry: An Analysis in Comparison with Selected ASEAN Countries

Abstract

This paper provides a comprehensive and disaggregated set of elasticity estimates, to date, in the face of MFA abolishment. The estimates made here are at a detailed level of disaggregation and should provide researchers with opportunities for future analysis. We used the gravity model to estimate the trade elasticity of China’s apparel cottons in the US market for the period between 1989 and 2009. From the gravity model, two phenomena are observed. First, there exists a unique long-run equilibrium relationship among the import quantity demand, the import price and the US GDP per capita. Second, import price and income elasticity are significant with the expected signs, conditions of which are significant for performing trade—policy analyses.