“Silk Road” of China – The Present and Future of Hangzhou Silk Industry

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Table of Contents

Introduction
Industry Background
Macro Economics
Hypotheses
Conclusion

Introduction

The origin of silkworms’ products such as silk is believed to have emanated from China as this was the first established niche for silkworms by way of introduction of the mulberry tree. Silk is a natural fibre that is generated by silkworms in their quest to build a cocoon. It occurs in single long strands that are released by the worms and can measure up to several hundred metres.

After the discovery of silk in china, this product was endemic to the Chinese communities but later it received global acceptance and thus the increasing demand for the silk products. Particular, the Asian market was very fond of silk garments thus, leading to the emergence of a trend that saw the popularization of silk products as trendy and luxurious because of silk’s high quality natural fibre.

Further, the increasing interest in silk made garments and the luxury attached to the silk products made the silk products popular than gold thus leading to the emergence of silk trade. This particular trade involved the exchange of products such as silver and gold for the luxuries silk fibre. This trade was majorly between the Westward and the East leading to the emergence of what was referred to as the silk route.

Hangzhou is China’s hometown of silk and silk industry and quite famous for its long history. It has long established itself as the home of silk production. It has approximately 300 silk production enterprises at present, leading the country in terms of the number of factories.

In the long course of historical development, it created a brilliant performance, and there were the golden era of prosperity；It produced a wealth of material products as well as valuable experience in production technology derived from a large number of spiritual wealth as well as cultural content.

Industry Background

The background of the silk industry can be traced back to the Romans who discovered the relevance of this fabric from their colonies. After the Romans discovered silk, the market and demand for silk made products in Rome escalated thus contributing to a scarce in silk.

Due to the value attached to the silk products, the Romans were adamant in trying to find out the source of silk or how it was produced thus necessitating the need to track down the silk traders in all the towns and the villages.

Unfortunately, the traders were not aware of the silk source as they were majorly merchants rather than the producers. Therefore, the traders were in no position to disclose details as it appertains to the production of silk.

Due to the Romans dire quest to find the source of the silk, Roman soldiers were sent for a mission of tracking down the silk sources and the people involved in the production of the same by following the silk route.

However, this mission was faced by a few setbacks as, some of the soldiers did not see through the completion of the task and those who managed to sail through the mission did not find a route through the desert that would direct them. Thus they did not find any relevant information with regards to the silk source or the people involved in the production of the fibre.

The Silk Road took caravans to the farthest extent of the Han Empire. To ensure the security and the continuation of the trade, it was relevant to secure the silk route. This led to the construction of a wall along the Gansu corridor thus propelling the silk trade and brings in some sense of habitation along the route. These saw the emergence of urbanization and construction of religious sites such as temples.

Further the urbanization led to the emergence of roads leading to and from the silk sources though with a greater extent of rugged terrain thus proving difficult to access the silk production areas.

Though the importance and value placed on silk and silk related products is still high, the demand of the product has consistently deteriorated until recently when the product use improved significantly thus necessitating the need to implement reforms in the silk industry.

Macro Economics

Of particular interest to this subject is Hangzhou which is the epitome of Zhejiang province by virtue that it’s a capital. Hangzhou is a commercial capital with a high number of industries and sceneries that are of interest to investors and tourists. A major investment industry that is highly regarded and ranked in Hangzhou is the light industry. Hangzhou is also home to a well renowned large flax textile industry.

Due to the fact that silk was first discovered in china, consequently, China is home to some of the largest produced quantities and most sophisticated quality silk products.

In recent years, Hangzhou silk in brand building, product quality, enterprise transformation, the profession competitive power, has been in a leading position in the country: the national 17 companies which won the Chinese silk association awarded high-end silk marks the first, among which five enterprises in Hangzhou were selected.

The first batch of Chinese famous brand product won the title five silk enterprises, Hangzhou accounted for two. In the 2008 Beijing Olympic licensed merchandise franchise, Hangzhou silk enterprises accounted for about three companies. The need to come up with a system that can stabilize the market price of silk and silk products is among the major concern among the major players in the silk production industry.

The improvement of silk and silk related demand is also key though the stake holders are adamant in believing that stabilization of the prices through a system is key in determining the demand of silk and silk products. Therefore, necessitating on the need to implement the reform policy that seeks to stabilize the markets and thus consequently the demand of the silk products both locally and globally.

However, the changing environmental conductions especially with reference to the changes in the climatic regimes and the mean temperatures have also been classified as one of the major impediments towards the production of cocoons by the silkworms.

However with the importance that most global leaders have placed on the need to deal and adapt to the changing climate, it is only a matter of time before a solution to this issue is arrived at.

National competitiveness

Hangzhou represents an economy that is flourishing and the success of its trade endeavours has been greatly attributed to globalization through opening up of new trade ventures and the actualization of reforms in the industry.

In recent years, Hangzhou government takes “To promote the silk product and develop women’s wear” as an important content in building the city of outstanding quality life and harmonious society and has made remarkable achievements.

Last year, the output of the silk and women’s wear industry reached 178.2 billion Yuan. Silk products’ development is valued by the municipal government and it has very good prospects. While not many consumers of modern time are familiar with silk products and even less take silk products as their choices.

Hangzhou infrastructure is highly developed especially the energy and water sectors which can adequately meet the needs of the people. Another sophisticated form of infrastructure that has immensely grown includes the transport sector.

Further, the media and communications industry has also grown over time adding to some of the major facets of the capital that have generated a lot of interest especially from tourists who are keen on visiting some of the rebranded tourism sites.

Comparison to sector in other countries-Italy and France

Given China’s history with the silk industry, it consequently follows that this is the hub of the silk industry and as such the largest in the world. For instance, throughout the 90s, China has been the major producer and supplier of silk and silk related products.

China silk supply to the world amounts to more than 71%. In comparison with a country like France which has also been a major contributor to the production of silk on a global scale China still dominates the production of silk. France though not a major producer in bulk is able to meet up to 70% of the domestic demand of the silk thus leading expanding markets for France made silk garments and fabrics.

Again while comparing China and Italy which is also a major player in the global silk industry, Italy still has a lot to invest in the silk industry in order to much the quantities produced in china. However, Italy has been able to capture the European silk market by meeting the customer demands thus strategically taking over more than 80 % of the European Silk market.

Hypotheses

If china continues with the trend of improving their silk industry, they are likely to increase their GDP and eventually their economy will grow tremendously in years to come.
If China improves on its silk production capacity, then China will remain the major supplier of silk and silk related products globally.

Conclusion

Local governments should continue with their effort to introduce new facilities that will bring in latest high-end silk manufacturing machinery that will elevate both the quality and the quantity of the silk being produced in China. The new facilities are likely to render significant revenue increases as a result of improved production and distribution capabilities.

In addition, the response to economic trends, e-commerce will be a help to expedite the development of traditional trades. Hangzhou has become a modern development and production base for communication products, making it a key destination for foreign investors in the IT field.

Many businesses already in the Hangzhou Silk City on Alibaba and Taobao, have set up their own e-shop, while the market is more in need for an overall unified online trading platform.

Silk City is in the planning of this web-based platform for all commodities to be traded through the network considering that the platform will enable the Industries which are not only the main contributor to Hangzhou’s GDP, but also the main source of its financial income, to make efficient sales for their commodities. The sector provides employment opportunities and a better income for Hangzhou residents as well.

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