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Manufacturers, Exporters, Wholesalers - Global trade starts here.
Increasing Competition Brings Trade Frictions

It is the growing competitiveness, rather than the low-quality excess of Chinese textiles and apparels, that has led to the country's frequent trade frictions with developed markets, an insider said recently.

Du Yuzhou, president of China National Textile and Apparel Council, told Xinhua News Agency on Tuesday that the trade frictions also indicate that the European Union and US markets are "retreating from free trade practices."

Since April this year, the EU and the US markets have both imposed special protection measures against specific Chinese textiles. To avoid trade frictions, China announced the raising of export tariffs on 74 categories of textiles starting June 1.

In mid-June, China and the EU reached an agreement on Chinese textile exports.

Two months later, however, more than 80 million pieces of China-made garments were found stockpiled at European ports as they exceeded the import quotas agreed on by both sides.

The September 5 agreement between Commerce Minister Bo Xilai and EU Trade Commissioner Peter Mandelson ended the impasse. Some of the garments held up would enter the EU and others be added to China's 2006 textile quota.

Du said it is unreasonable to say China's textile firms are excessive and growing too fast, or that China has compromised so much in negotiating with the two markets that it has hurt the domestic industry.

"The export barriers set by the developed markets indicate that China's textiles are improving in quality," he said. "If the products are poor in quality, foreign consumers would never think of buying them."

Last year, China's textiles and apparels registered 1.57 trillion yuan (US$193.8 billion) in sales revenue and US$97.4 billion in export volume, 16.4 percent of the country's total exports and at least a quarter of global exports.

Du said China's leading position in textile and apparel exports has been acquired through constant trade frictions.

In 1994, Europe and the United States began imposing across-the-board quotas on Chinese textiles, but the industry has continued to expand and surge in exports.

Du cited the Japanese free market where Chinese textiles make up 70 percent of Japan's total imports, saying this also testifies that Chinese textiles are competitive.

"When an emerging country tries to penetrate the world market, trade frictions are inevitable," Du said. "The more advanced the industry, the fiercer the trade frictions. There will not be trade frictions in outdated industries."

He said the special protection measures Europe and the United States have adopted are an abuse of the World Trade Organization's commitments.

Restrictive measures may save costs, Du said, but they are not the right way to deal with trade frictions in a globalized world.

Du urged Chinese textile firms to build up more proprietary brands and techniques to further enhance their competitiveness. Only in this way, he said, can they stand up against the various trade barriers ahead.

(China Daily September 22, 2005)

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