Empirical Analysis of the Textile Manufacturing Industry in Guangdong
Province Based on the Input-Output Method
Jingxuan Li and Qiong Long
Business school Beijing Institute of Fashion Technology Beijing, China
*
sxylqiong@bift.edu.cn
Keywords: Textile, Input-Output Method, Direct Consumption Coefficient, Complete Consumption Coefficient.
Abstract: Based on the latest input-output data of Guangdong Province in 2017, the article researches and analyses the
total output, industrial ripple effects and industrial structure of the textile industry in Guangdong Province.
The induction of the textile manufacturing industry in Guangdong Province is lower than the social average,
but its influence is higher than the social average, and it is more closely related to other industries; the analysis
of the intermediate input rate and the intermediate demand rate shows that the textile manufacturing industry
in Guangdong Province belongs to the intermediate product-based industrial sector, which has the nature of
a means of production and low value-added. In this regard, it is recommended that the textile manufacturing
industry in Guangdong Province undergoes digital industrial upgrading to increase the added value of the
industry.
1 INTRODUCTION
The global textile and apparel industry is undergoing
the fifth international transfer, a new round of
industrial transfer, under the constraints of developed
countries and the challenges of emerging developing
countries, China's textile and garment industry labor
cost advantage has gradually weakened (Lu, 2013).
The textile industry has always been a traditional
pillar industry in Guangdong Province, and it has
made outstanding contributions in various fields such
as market prosperity, employment expansion,
technological innovation, brand creation, etc., and is
the top priority of the high-quality economic
development of Guangdong Province. With the
development of Guangdong's textile industry, it has
also led to the exuberant development of other related
industries and the overall national economy.
However, with the continuous optimisation of the
industrial upgrading and value chain, China's textile
industry has gradually fallen into many difficulties
such as sloppy production methods, low value-added
rate, serious pollution and severe product
homogenisation. In order to better cope with the
environmental dilemma, empowering the whole chain
*
Corresponding author
of the textile industry with the digital economy,
accelerating the upgrading and transformation of the
textile industry, and achieving high-quality
development have become one of the hot issues
concerned by academics, the industry and even the
government (Li, 2018).
In this context, this paper uses the input-output
model, and based on the input-output table of
Guangdong Province in 2017, the quantitative
dependence of the input-output between the textile
manufacturing industry itself and other economic
sectors in Guangdong Province is in the economy of
Guangdong Province. The influence and spillover
effect in the analysis are carried out. This paper adopts
the methods of combining industrial economics and
input-output economics, combining qualitative
analysis and quantitative analysis, combining static
analysis and dynamic analysis, etc. to study the
development of textile manufacturing industry in
Guangdong Province. Finally, it is concluded that
Guangdong Province should strengthen the support of
the textile industry in terms of digital transformation,
R&D innovation, financial support, and speeding up
the construction of independent brands according to
the changes in the domestic and foreign economic
environment.
Li, J. and Long, Q.
Empirical Analysis of the Textile Manufacturing Industry in Guangdong Province Based on the Input-Output Method.
DOI: 10.5220/0012022500003620
In Proceedings of the 4th International Conference on Economic Management and Model Engineering (ICEMME 2022), pages 11-16
ISBN: 978-989-758-636-1
Copyright
c
2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)
11
2 DEFINITIONS
The textile industry studied in this paper refers to the
textile manufacturing industry, which specifically
includes cotton textile and dyeing finishing, wool
textile and dyeing finishing, hemp textile and dyeing
finishing, silk and silk textile and dyeing finishing,
chemical fibre weaving and dyeing finishing, knitting
or crochet fabric and its products manufacturing,
household textile manufactured products
manufacturing, industrial textile manufactured
products manufacturing, etc (Zhao, 2018). The
classification of textiles was collated according to the
rules for the preparation of input-output tables in
Guangdong Province and the industry classification
code table of the national economy, as shown in Table
1.
Table 1: Definition of textiles.
Code Sector
17027
Cotton, chemical fibre textiles and
d
y
ein
g
and finishin
g
p
roducts
17028
Woolen Textiles and Dyeing and
Finishin
g
Products
17029
Hemp and silk textiles and processed
p
roducts
17030
Knitting or crochet and articles
thereof
17031 Fabricated textile products
18032 Textile clothing and apparel
19033
Leather, fur, feathers and articles
thereof
19034 Shoes
The economist Vassily W. Leontief first proposed
the input-output analysis in the 1930s, which allowed
for a comprehensive analysis of the balance between
inputs and outputs of the various sectors of the
national economy and between them. Through the
study of the structure of the national economy,
Leontief and other economists proposed and
developed input-output tables based on previous
studies on the interdependence of economic activities,
and the input-output model (I-O model) was also
developed based on input-output tables. The I-O
model is also based on input-output tables.
The study and application of input-output analysis
can provide a useful scientific tool for building a
country's economy, and most countries update and
compile input-output tables every few years. As the
input-output table of Guangdong Province is not
updated and released every year, this paper uses the
latest updated input-output data of Guangdong
Province in 2017 to conduct empirical analysis of the
direct consumption coefficient, complete
consumption coefficient, intermediate demand rate,
intermediate input rate and other relevant indicators of
the textile and garment industry.
The total output of the textile manufacturing
industry in Guangdong Province reached 211.55
billion yuan in 2007, and 254.38 billion yuan in 2012,
representing a year-on-year increase of 16.8%; in
2017, the total output reached 316.25 billion yuan,
representing a year-on-year increase of 24.3%.
The total output of the textile manufacturing
industry in Guangdong Province has been increasing
year by year, indicating that the textile manufacturing
industry in Guangdong Province has formed a certain
scale and more complete industrial system, and has a
certain influence in the economic development of the
province.
3 METHODS
As the direct consumption coefficient helps to
understand the strength of the interdependence and
constraints among the various sectors of the national
economy, and also provides an important economic
parameter for the construction of input-output models,
the direct consumption coefficient is used in this paper
to illustrate the extent to which the textile
manufacturing industry in Guangdong Province
consumes products from other sectors in the
production process, in order to reflect the degree of
dependence of the textile manufacturing industry on
other industrial sectors.
The direct consumption coefficient of the textile
manufacturing industry in Guangdong Province
reflects the direct consumption of products in various
sectors of the textile manufacturing industry during
the production of a product, specifically the ratio of
the consumption of a certain product to the total output
of the textile manufacturing industry. Its calculation
formula is as follows.
𝑎
=
(i,j=1,2,…,n)
(1)
In this equation 𝑎
𝑖𝑗
is the direct consumption
coefficient; 𝑥
𝑖𝑗
is the direct consumption of a product
in sector j to sector i; 𝑥
𝑗
is the total input of sector j.
The direct consumption coefficient is an important
and fundamental coefficient for modelling and is
considered to be the core of the input-output model.
The coefficient of complete consumption of the
textile manufacturing industry in Guangdong
Province is the coefficient of all the textile
manufacturing industry's production of a product The
amount of products used in each industrial sector in
ICEMME 2022 - The International Conference on Economic Management and Model Engineering
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the chain, expressed as 𝑏
𝑖𝑗
. Its calculation formula is
as follows.
𝑏
=𝑎
+𝛴
𝑏
𝑎
(i,j=1,2,…,n)
(2)
The intermediate demand rate is expressed as the
ratio of intermediate demand in each industry sector
to final demand in that industry and is calculated as
shown in equation (3).
𝐺
=
(i,j=1,2,…,n)
(3)
In this equation 𝐺
𝑖
is the intermediate demand rate
of industry i; 𝑌𝑖 is the final demand component of
industry sector i.
The intermediate input rate is the ratio of
intermediate inputs to total inputs in the production of
an industrial sector in one year and is calculated as
shown in equation (4).
𝐹
=
(i,j=1,2,…,n)
(4)
In this equation 𝐹
𝑗
is the intermediate input rate of
industry j; 𝐷
𝑗
is the full depreciation cost of industry j
in 1 year; and 𝑁
𝑗
is the value created by industry j.
4 RESULTS & DISCUSSION
4.1 Analysis of the Direct and
Complete Consumption
Coefficients of Textiles in
Guangdong Province
Based on equation (1), the direct consumption
coefficient for the textile manufacturing industry in
Guangdong can be estimated, as shown in Table 2
(due to space constraints, only the top 10 industries are
listed in this paper).
In general, the larger the 𝑎𝑖𝑗, the greater the direct
dependence of sector j on sector i. Sectors with direct
consumption coefficients above 0.01 should be those
with higher consumption. Table 2 shows that the top
five industries closely linked to the textile
manufacturing industry in Guangdong Province are
textiles, chemical products, production and supply of
electricity and heat, wholesale and retail, and
agricultural, forestry and fishery products and
services. Among them, the direct consumption of the
financial sector ranks in the top ten, indicating that the
development of the textile manufacturing industry has
a certain demand-pull effect on capital and is an
industry with a strong financing nature.
Table 2: Top 10 direct textile consumption factors in
Guangdong Province.
Sector
Direct
consumption
factor
Ran
k
Textiles 0.452877 1
Chemical products 0.087286 2
Production and supply of
electricity and heat
0.05566 3
Wholesale and retail 0.049968 4
Agriculture, forestry and
fishery products
0.026881 5
Clothing, footwear, hats,
leather and down and their
p
roducts
0.018342 6
Transport, storage and postal
services
0.015812 7
Paper, printing, educational
and sporting goods
0.01518 8
Finance 0.009171 9
Coal mining products 0.008222 10
The complete consumption factor gives a more
complete The higher the coefficient, the closer the
techno-economic linkages.
As the coefficient of complete consumption
reveals the direct and indirect links between sectors, it
provides a more profound picture of the quantitative
relationships of intersectoral The coefficient of
complete consumption reveals the direct and indirect
linkages between sectors and provides a more
profound picture of the quantitative relationships of
intersectoral dependence, or it helps to provide a more
comprehensive picture of direct and indirect
consumption. From (2), the coefficient of complete
consumption of the textile manufacturing industry in
Guangdong Province can be estimated as shown in
Table 3 (due to space constraints, only the top 10
industries are listed in this paper), the coefficient of
direct consumption and the coefficient of complete
consumption of textile The textile manufacturing
industry is ranked 1st in both the direct and complete
consumption coefficients.
Table 3: Top 10 textile complete consumption factors in
Guangdong Province.
Sector
Complete
consumption
factor
Rank
Textiles 0.857798 1
Production and supply of
electricit
y
and heat
0.131212 2
Oil and Gas Extraction
Products
0.1248 3
Empirical Analysis of the Textile Manufacturing Industry in Guangdong Province Based on the Input-Output Method
13
Metal mining products 0.09827 4
Chemical products 0.07939 5
Petroleum, coking
products and processed
nuclear fuel products
0.052327 6
Gas production and
su
pp
l
y
0.051867 7
Metal smelting and
rolling products
0.04651 8
Agriculture, forestry and
fishery products and
services
0.044093 9
Non-metallic and other
minerals extracted
p
roducts
0.042991 10
4.2 Analysis of Textile Industry Types
in Guangdong Province
Industries can be classified into four categories based
on their intermediate demand and intermediate input
rates, which are intermediate product-based basic
industry sector, intermediate product-based industry
sector, final demand-based basic industry sector and
final demand-based industry sector.
The intermediate demand rate for textile
manufacturing in Guangdong Province in 2017 can be
estimated based on equation (3) (due to space
constraints, only the top 10 industries are listed in this
paper), as shown in Table 4.
Table 4: Top 10 intermediate demand rates in Guangdong
Province.
Sector
Intermediate
demand rate
Rank
Non-metallic and other
ore minin
g
p
roducts
0.933247754 1
Leasing and business
services
0.906543291 2
Metal smelting and
rolled products
0.837592937 3
Production and supply
of electricit
y
and heat
0.824753441 4
Non-metallic mineral
p
roducts
0.75383005 5
Products from oil and
gas extraction
0.749181401 6
Metal ore mining
p
roducts
0.73512476 7
Finance
0.680603731 8
Textiles
0.67978268 9
Trans
p
ortation
0.666471962 10
Table 4 shows that the textile manufacturing sector
has an intermediate demand rate of 0.68, ranking 9th
out of all sectors, indicating that more of the products
produced in the textile manufacturing sector are used
in the production of other sectors and that the textile
manufacturing sector is a raw material industry in
nature.
According to equation (4), the intermediate input
rate of textile manufacturing industry in Guangdong
Province in 2017 can be derived, as shown in Table 5.
Table 5: Top 10 intermediate input rates in Guangdong
Province.
Sector
Intermed
iate input
rate
Ran
k
Gas
p
roduction and su
pp
l
y
0.825905 1
Metal smelting and rolled
p
roducts
0.805583 2
Communications equipment,
computers and other electronic
equipment
0.802464 3
Construction
0.796504 4
Metal
p
roducts
0.792679 5
Textiles
0.791349 6
Transportation equipment
0.789385 7
Paper, printing, educational and
s
p
ortin
g
g
oods
0.787193 8
General equipment
0.78177 9
Chemical products
0.780915 10
The intermediate input rate indicator is used to
measure the amount of product that needs to be put
into other sectors to produce a unit of that sector's
goods, and since intermediate input + depreciation +
value added = total input to the industry, there exists
an equation of intermediate input rate + value added
rate = 1. The value added rate = 1. The higher the rate
of intermediate inputs, the lower the rate of value
added in an industry. Table 5 shows that the textile
manufacturing industry has an intermediate input rate
of 0.79, ranking 6th among all sectors, indicating that
the textile manufacturing industry in Guangdong
Province is an industry with a high intermediate input
rate and low value added. In the future, Guangdong
Province should increase its efforts in upgrading and
transforming the textile manufacturing industry, and
strive to improve the value-added industry. In the
future, Guangdong Province should make more
efforts to upgrade and transform the textile
manufacturing industry and strive to increase the
added value of the textile manufacturing industry.
According to the three-dimensional structure of
the industry, the textile and garment industry in
Guangdong Province is characterised by a high rate of
ICEMME 2022 - The International Conference on Economic Management and Model Engineering
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intermediate demand and a high rate of intermediate
inputs, and its structure is classified as an intermediate
product-based industry sector, which is highly driven
by the upstream industry and is also highly dependent
on the downstream enterprises. The textile
manufacturing industry in Guangdong Province is one
of the province's pillar industries and should be further
improved by increasing its interconnectivity with
other industries.
5 CONCLUSIONS
According to the above analysis, the total output of the
textile manufacturing industry in Guangdong
Province has been rising year by year, and the growth
rate has slowed down. However, it is still the pillar
industry of Guangdong Province. The textile
manufacturing industry in Guangdong Province has a
strong pull on the national economy of Guangdong
Province. It is a strong contributor to the national
economy. From the analysis of industry types, it can
be concluded that the textile manufacturing industry
in Guangdong Province is an intermediate product-
based industry sector, with the nature of a means of
production. It has the nature of a means of production
and has a low value-added rate (Ning, 2021).
From the overall trend of textile development in
Guangdong Province, structural upgrading of the
textile industry is the key to maintaining the
sustainable development of the industry. Based on the
position of the textile and garment industry in
Guangdong Province and China's textile and garment
industry in the global value chain, and also in the
context of the era of industrial reform in the digital
economy, the following suggestions are made in a
comprehensive manner.
Firstly, in the context of the current digital
economy, the textile and garment industry in
Guangdong Province should accelerate the process of
building a new digital infrastructure represented by
industrial interconnection and data centres, build an
information service platform for the entire textile
industry chain with the help of big data technology,
connect the data islands between the upper, middle
and lower reaches of the textile industry, activate the
value of data, realise the interconnection and mutual
sharing and integration of textile industry information
resources, and accelerate the promotion of the digital
The digital economy is embedded in the depth and
breadth of the textile industry chain in Guangdong
Province, helping to upgrade the textile industry in
Guangdong Province.
According to the changes in the domestic and
international economic environment, enhance the all-
round support for textile enterprises in terms of digital
transformation, R&D innovation, financial support,
platform support and speeding up the construction of
independent brands, and increase the general fiscal
expenditure on the digital transformation of the textile
industry. Continuously optimise the business
environment for the development of textiles and
garments in response to the different characteristics of
different segments of the industry and the different
degrees of development of the digital economy.
Relying on the effect of modern textile industry
clusters in Guangdong Province, the industry layout
will be further optimised and digital transformation
will be promoted by industry and by focus, such as
focusing on digital research and development, flexible
production, online and offline integrated sales,
intelligent supply and digital services, so as to realise
the all-round integration of the digital economy with
the textile industry.
From the perspective of the textile and garment
industry's relevance to other industrial sectors, the
structure of the upstream and downstream supply
chain industries will be optimised, thereby promoting
the upgrading of the textile and garment industry's
production capacity. For the wholesale and retail trade
industry, new media tools are vigorously implemented
so as to promote the textile and garment industry to
achieve a high level of e-commerce with coordinated
development online and offline; in the chemical
industry, textile fabric technology is comprehensively
implemented and corresponding research and
development teams are trained to enhance the
performance of garment products; for agriculture, the
current Internet thinking can be used to achieve a
situation where agriculture can better serve the textile
and garment industry, improve the supply structure
and Promote agriculture to achieve technology-based
planting, thus forming a tripartite integrated data
supply chain for factories, enterprises and the sales
end.
ACKNOWLEDGMENT
This research was sponsored by the Funding for
postgraduate dissertation projects in the Beijing
Institute of Fashion Technology of Business
(No.110501990112), the Beijing Social Science
Foundation Research Base Project (No.17JDGLB003)
and the "Light of Textile" China Textile Federation
Higher Education Teaching Reform Research Project
Empirical Analysis of the Textile Manufacturing Industry in Guangdong Province Based on the Input-Output Method
15
(No.2021BKJGLX095). The authors thank the
anonymous reviews for their insightful comments.
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