Bidding solution to textile quota conundrum
By Jiang Wei (China Daily)
Updated: 2005-09-14 06:03

China is likely to adopt a bidding method in allocating the textile quotas for the next year, in order to ensure fair play during the process, according to information from the China Chamber of Commerce for Import and Export of Textiles.

This move was made upon the request of many textile manufacturers in China. It will also help better manage exporters' performance.

Chinese workers sew up garments at a factory in Panjin, Northeast China's Liaoning Province September 5, 2005. [newsphoto]

Currently, China's allocation of textile quotas, particularly from the European Union (EU), was based on textile dealers' shipments in the previous year.

According to this method, a number of textile companies got only small figures, even several items or kilograms, and were not able to conduct exports at all. Many enterprises complained about the resource waste from such an allocation method.

A conference among major domestic textile exporters was held yesterday to discuss whether to adopt a new method for the country's textile exports.

"We hope all the quotas for the next year will be allocated through a bidding process, because it is fair and scientific," said an official with a Beijing-based textile producer, who declined to give her name.

"The government might accept the bidding method, but it is not clear whether the quotas will be allowed to circulate in the market," she said.

She added that enterprises hoped the final government decision would be published as soon as possible, so as to rule out the uncertainties for exporters, and enable them to sign contracts for next year with foreign buyers in October.

However, a source from the chamber said the government was likely to adopt this method on part of the quotas and leave others allocated in the original way.

"Thirty to 40 per cent might be taken for bidding," the source said adding that the proposal needs to be approved by the Ministry of Commerce.

Official information on the bidding method is not yet available.

The current quota allocation was governed by provisional management measures issued earlier July.

In the "vacuum period" before the measures took effect on July 20, most textile manufacturers worked hard to export as much as possible.

Such practices lead to chaos, with Chinese textiles' stockpiled at EU ports.

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