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Rethinking the future

By Jiang Wei (China Daily)
Updated: 2008-05-12 14:29

Consequently, many Chinese exporters are now pessimistic about the US textile market in 2009 although the year marks a real "quota-free era" for China's textile exports to the US.

When textile quotas were removed globally in 2005, China, the world largest textile exporter, reached agreements with the US and the EU to extend the quota system on the country's textile exports to the two markets to the end of 2008 and the end of 2007 respectively.

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This year China and the EU are applying a "double checking system" to track the issuing of licenses for exports in China and the importation of goods into the economic bloc.

Cao with the Chamber of Commerce says China and the US may not take a similar measure when the agreement comes to an end because China's textile exports to the US are decreasing.

However, he says, Chinese textile exporters are still likely to encounter more protectionism in the US as US textile businesses that are squeezed by the economic trouble in their home market may push the US government to protect their interests.

"Countervailing and anti-dumping measures, which is being conducted simultaneously on a number of other Chinese-made products, may be taken against textile products" he adds.

Some US officials and experts believe that its consumer market is going to recover from the end of the third quarter this year as the government's measures to stimulate the economy take effect.

However, many Chinese textile exporters say they believe the US recession will last to at least the first half of next year and may not see a recovery until the second half in 2009.

Many US buyers are turning to other textile making countries, such as Vietnam and Indonesia, but some others are choosing to stay with their Chinese partners.

When asked of whether he will keep buying in China, Hochster says: "Sure. I think China still gives you opportunity to get good quality. "

He explains Chinese apparel makers are close to textile mills without having to ship fabric to other countries, which makes the shipping time less.

It takes about 20 days from China to the US, four weeks from Indonesia to the US and longer for some other countries.

However, Hochster says he is not only looking for new resources to buy garments in China but also looking for factories to make garments by themselves.

Ma Shiying, deputy general manager of Guangzhou Textile Holding Limited, who just returned from the United States, finds it "very hard to bargain for a better export price with US clients".

He and his sales team now have to make offers to their US buyers at an aftersight exchange rate, sometimes as low as 6.78 (the yuan closed at 6.99 to dollar on April 25).

"But, as some clients say it will be better next year as long as we pull ourselves through 2008," he says.

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