Textile firms prepare for import restrictions
By Jiang Wei (China Daily)
Updated: 2005-04-16 05:51

GUANGZHOU: The industrial association of Chinese textile makers said on Friday it was helping enterprises prepare for possible safeguard measures from the United States and European Union.

"We have drafted a plan for quantity distribution in case the safeguard measures are launched," said Cao Xinyu, vice-chairman of the China Chamber of Commerce for the Import & Export of Textiles.

The distribution would be based on the exports of each company in the first quarter of this year, he said, adding that most textile manufacturers had agreed on the step.

"The safeguard measures against Chinese textiles may be inevitable, as an investigation was initiated by the US Government, which implies its determination," Cao said

In the scenario that safeguard measures are enforced by the United States andEuropean Commission one month from now, some enterprises, particularly small ones, are likely to resort to price slashing to stay ahead of the competition.

"They may hope to export as much as possible in a short period of time," Cao said. "But such bad practices may put enterprises in a sticky situation - they use up all their import quota within two to four months, and spend the rest of the year with no orders."

Enterprises are facing another imminent problem.

Guo Jiahong, a participant of the 97th China Export Commodities Fair which opened in the city on Friday, felt discouraged by the few US buyers visiting his company's booth - Shuaimei Garments from East China's Jiangsu Province.

"Although it is the first day of the event, we know that the number of US traders is much smaller than that of last spring," he said. "And we are not sure whether to accept the orders or not."

The textile association has suggested companies steer clear of large-sum and long-term deals to avoid landmines laid by the safeguard measures.

"They may try to grasp some smaller, repeat orders," Cao said.

China has made strenuous efforts to ease the concerns of import nations through dialogue and co-operation but have failed to offset talk of import restrictions.

The US Government decided last week to investigate three categories of textiles imported from China. Trade tensions intensified further when the European Commission launched similar inquiries into imports from China.

(China Daily 04/16/2005 page2)

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