Playing catch-up with China: challenges and strategies for smaller developing countries

Abstract

This paper considers how smaller developing countries can compete with China by examining the cases of two such countries; Mauritius and Morocco. In order to supplement their more traditional extractive and agro-based industries they have developed important textile and apparel sectors, supplying principally the EU. However, the textile industries in both countries have recently come under intense competitive pressure from China with its much lower production costs and huge capacity. This paper compares and contrasts the conditions under which Mauritius and Morocco have developed their textile industries as well as exploring the challenges they now face from China and the ways in which they have reacted to them. It also examines the wider industrial policy of both countries and the extent to which they have acquired the capability to meet the threats that now face them. Some specific strategies and actions are also described and evaluated with a view to providing advice and guidance for other smaller developing countries that face similar challenges in these and other industries.

Keywords:

• strategy
• competitive advantage
• textile and apparel industries
• technology
• leapfrogging
• Mauritius
• Morocco
• China

Notes

In this paper the generic term ‘textile industry’ is used. This refers to the manufacture of textiles and apparel that include fibre and fibre products, fabrics and finished fabric products such as clothing.