Growing against the odds: government agency and strategic recoupling as sources of competitiveness in the garment industry of the Pearl River Delta

Despite pressures of rising production costs, China's garment industry has recently displayed continuous growth. We argue that this persisting strength is the result of 'strategic recoupling' through which former low-end exporters forge new links to the domestic market or supply higher value-added products to export markets while relocating parts of their operations to regions with lower production costs. Drawing on empirical data from clusters in the Pearl River Delta (PRD), it is analysed how local governments can act as agents in such processes. This is seen as one source of the ongoing attractiveness of the PRD as a hub for the garment industry.