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Industry Outraged by US Textile Decision

Textile manufacturers and exporters in China said on Sunday that they were outraged by the "hasty and unwise" decision of the United States to re-impose quotas on imports of three types of Chinese clothing, warning that such a decision would hurt both sides badly.  

"The US decision is both hasty and unfair, as it was based on the controversial statistics from the American side, which only covered the first three months of the year," said Yang Weidong, general manager of Jifa Textile Group Co. Ltd., a leading textiles producer in east China's Shandong Province.


Although exports of his company to the US have increased by 30 percent in the past four months as against last year's figure, a large proportion of them were actually ordered last November and December, said Yang.


"I have received no orders from US importers since Washington launched investigation on China imports in April, and my US business partners even recalled orders worth more than US$3 million over the period," he complained.


The US Committee for the Implementation of Textile Agreements announced on Friday a 7.5-percent cap on the annual increase of imports of China-made cotton shirts, trousers and man-made fiber underwear, based on its observation that an import surge from China had "caused market disruption" in the US.


China's Ministry of Commerce immediately voiced its strong opposition to this decision, which it said had "run counter to World Trade Organization's agreements" and "set a very bad precedent."


The ministry recorded a 19.1 percent growth for China's textiles and clothing exports to the US in the first quarter this year, which was 5.6 percent lower than in the same period of last year.


"Actually, following a soaring momentum in the first two months, exports growth to the US has been declining since early March," said a source with the Beijing-based China Textile Industry Association.


Ning Jinyun, general manager of Tianjin Textile Import and Export Inc. in north China, said that the company, which sold textiles and clothing worth more than US$20 million to the US last year, was forced to accept small American orders only this year for "serious concerns about the risks."


"This is really abnormal and painful for a big company like us," said Ning, who was also deeply worried that other countries and regions might follow the example of the US and "make things harder for the Chinese manufacturers and exporters."


Yuan Zhongjian, general manager of the Shanghai-based Cliff Knitwear Co. Ltd., questioned if the US administration had made a wise decision by "re-imposing quota in the post-quota era under the WTO regime."


"They claimed that such a decision had defended thousands of American jobs, but couldn't they see that it would also make millions of Americans pay more for their clothing and affect billions of dollars in American business?" asked Yuan.


According to Yuan, when the old quota system was in place, the cost of every piece of exported Chinese textile products would be raised by at least 10 percent. "Now the nightmare is returning in just less than half a year," he said.


Hu Guocheng, a researcher with the Beijing-based Chinese Academy of Social Sciences, echoed Yuan's opinion, saying that the US ceiling on China imports will "induce more harm to US retailers and consumers than possible benefits to American textile manufacturers."


Industry insiders say that as a result of the hasty US decision, most Chinese textile manufacturers are not well prepared and the newly imposed quota might be used up in two to four months.


"By that time, they will have only two options: either to explore new markets or to stop production and even go bankruptcy," they predict.


Textile companies in Shandong, one of the country's leading textile manufacturing and export bases, are already considering major production cuts as well as a sharp cut in their cotton imports. Last year the province imported 465,000 tons of cotton, including 182,000 tons from the US.


(Xinhua News Agency May 16, 2005)

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