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Home >> Business
UPDATED: 08:52, March 02, 2005
Measures to stop disorderly competition
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China's apparel and textile industry is expected to establish a mechanism with powerful measures to stop disorderly export competition, especially in terms of price.

A joint committee for textile export countermeasures has set out specific rules for the industry's self-discipline in exports, according to Wang Shenyang, chairman of the China Chamber of Commerce for the Import & Export of Textiles (CCCT).

The measures may include a minimum price for sensitive exports, with those exporting below the prices being placed on a customs' blacklist, which means they would be put under tight supervision, Wang said.

And some companies will even lose the right to trade, he said.

"The minimum price would be discussed by experts and traders. It does not mean a monopoly price, but the acceptable lowest price with normal costs and a reasonable profit," he added.

Apart from the chamber, the joint committee was attended by the China National Textile and Apparel Council (CNTAC), the China Association of Enterprises with Foreign Investment (CAEFI), the Hong Kong General Chamber of Textiles, the Textile Council of Hong Kong and officials from the Ministry of Commerce.

The 6,000 member companies of the CCCT account for 70 per cent of China's total textile exports. Along with another four industrial organizations, they represent virtually all textile exporters from both the Chinese mainland and Hong Kong.

The joint committee has held two meetings on January 31 and February 21 this year.

The Chinese Government and the nation's textile industry have moved to ease the concerns of foreign counterparts who fear Chinese textiles will swamp the world market in the quota-free era.

All textile quotas among World Trade Organization members have been removed since January 1 according to an agreement signed a decade ago.

Some foreign textile companies, not yet ready for the quota removal, pushed their governments to impose safeguards against Chinese textiles.

To address these concerns, especially from developing countries, China began to collect export duties on some textiles from January 1 this year, to quell export growth.

An automatic licence system for textile exports also took effect yesterday.

The automatic approval will step up the statistical analysis and monitoring of China's textile export, to release timely warnings to traders on textile exports.

These measures indicated China's responsible attitude as a major textile exporter and were expected to stimulate the export of quality Chinese textiles and readjust the growth pattern and the restructuring of the textile industry.

The licence system is actually part of the supporting measures of the joint committee's self-regulating rules, according to Wang.

When the licence system finds a drastic surge in one category and issues an alarm, the category will be identified as a sensitive product and its minimum price will be announced, Wang said.

China's textile and clothing exports totalled US$111.9 billion last year, with exports reaching US$95.1 billion, according to Wang.

By the end of last year, China may have secured 23 per cent of the world textile market, he said.

In the first two months of this year, China's textile exports enjoyed steady growth, but the growth rates to United States and European Union are high because of the lifting of the quotas, said Wang.

For example, the exports of trousers to United States saw an eight-fold increase year-on-year while the average price dropped by 30 per cent.

"It may be cited by foreign companies to support their worries but the growth is normal," Wang said.

China is a big exporter of trousers, but it suffered from unfair treatment in the quota period. The United States gave a quota of 5.5 million to China, compared to 7.82 million for Bangladesh and 10.18 million for Viet Nam.

Meanwhile, Chinese textile companies paid a lot to gain the limited quotas, with a value accounting for more than 30 per cent of the price of trousers, Wang said.

Wang said China will move in a responsible manner while foreign countries should be patient.

"The export increase would abate after an initial surge," he said.

Source: China Daily

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