China’s textile exports next year will no longer be subject to quota restrictions

Ministry of Commerce recently announced that since January 1, 2009 will no longer be implemented from the U.S. textile exports and the number of permits and textile exports to the EU export license management. It also means that from next year China’s textile exports will no longer be subject to quota restrictions.

To avoid cut-throat competition

In 2005, according to WTO agreements, China’s textile exports are no longer subject to quota restrictions on textile products in a large number of customs red in the first half of the year. In order to effectively control the market, then China and the European Union and the United States signed a 2-year and three years of bilateral agreements. Earlier this year, with the EU agreement expires, in order to avoid the recurrence of Chong Guan, the two sides began to implement the “bilateral surveillance, exchange of information.” The Chinese side is responsible for the domestic textile and garment export enterprise quality management certificates issued, in line with the agreement of certain conditions, enterprises can produce, including shirts, trousers, including 8 kinds of sensitive goods and exports. At the same time, China presented no limit on the number of export licenses, enterprises can receive unlimited, but the number must get used up or face punishment. End performance of the domestic procedures, the domestic textile and garment enterprises will be sent to a permit issued by the Chinese foreign businesses from the other party to the Customs and Excise Department in exchange for an import license after the clearance.

Shanghai Foreign Economic and Trade Regulation of Trade and Deputy Director of Luozhi Song said that the abolition of the quality management, many were forced to close down the plant could resume production, “This industry self-regulation, or will be caused by vicious competition within the industry, driving down profit margins . ”

“Blowout” difficult to reproduce

FAN Min said that while Europe and the United States by the end of the abolition of all quotas will not lead to the previously expected “blowout” conditions, the impact on exports will not be too great. FAN Min believes that Europe and the United States next year on China’s textile and garment orders may drop 20% in the current domestic production costs increased, and this year’s textile quotas in 2005 has been a substantial increase. “The state’s textile and garment exports should pay more attention to, or cancellation of the quota may not pull the amount of foreign trade by one percentage point improvement.”

Golden State Securities analyst Zhang Bin textile industry believe that the quota is abolished export tax rebate rate is very high, in the past year may be very important, but due to financial crisis, the declining demand for Europe and the United States, which has now become the textile Industries most affected. According to Reuters, U.S. Trade Representative Susan Schwab said last Friday that the United States has urged China to abolish the textile industry for some government subsidies, or else the United States to the World Trade Organization (WTO) proceedings.

The industry believes that even if Europe and the United States in 2008 no longer continue to impose restrictions on China textile products, Europe and the United States and other developed countries and some developing countries, a variety of non-tariff barriers, anti-dumping and regional trade alliance system and other trade protection measures are still China’s textile industry to obstruct the normal development and exports. With the Sino-US textile agreement by the end of 2008 due one after another, China’s textile exports are likely to cause further price increments by the chaos, Europe and the United States for the use of special protection, such as anti-dumping restrictions on China’s means of providing an excuse. “In the next few years, China’s anti-dumping of textiles to face the greatest barriers to trade.”