Businesses hail Sino-US textile trade accord
(Xinhua)
Updated: 2005-11-09 14:51

The textile trade accord clinched by the United States and China on Tuesday aroused a flurry of relief among Chinese textile and apparel enterprises, as it concluded their months-long anxiety against uncertainty on trade frictions.

After seven rounds of talks, the United States and China on Tuesday signed a three-year agreement on textile trade, imposing quotas on Chinese textile products but clearing a major obstacle to bilateral trade.

Chinese Commerce Minister Bo Xilai and US Trade Representative Rob Portman announced the deal at a joint news conference in London and hailed it as a success for both sides.

Describing the outcome as a "win-win result", the Ministry of Commerce said the agreement provides for a progressive increase inimports of major textile and apparel products from China -- by 10 to 15 percent in 2006, 12.5 to 16 percent in 2007, and 15 to 17 percent in 2008.

Imports from the previous year would be used as the base number to calculate the growth rate, the ministry said.

"The agreement gave our enterprises a relief,"said Jiang Hua, who is in charge of foreign trade with the provincial bureau of foreign trade and economic cooperation of east China's Jiangsu, aneconomic engine on the Yangtze River Delta.

"Trade dispute is just like the sword of Damocles hanging over Chinese textile and apparel enterprises and made them take a wait-and-see attitude, which has eroded the textile industry at large on the Yangtze River Delta,"Jiang Hua said.

Accounting for about half of China's total textile exports, theDelta boasts 35 out of the 55 major brandnames that are boosted bythe Ministry of Commerce. Meanwhile, Jiangsu has four companies ranked among the nation's top 10 textile and clothing exporters.

Over the past few months, however, textile enterprises on the Delta incurred huge losses due largely to blurred prospects on international markets. Many of them, which imported production equipment from Europe and the United States at the beginning of this year, dared not to accept orders, leaving the facilities in cold.

"We intended to buy a Benz to transport gold but end up with nogold to load," a manager of a textile business in east China's Zhejiang Province, also on the Yangtze River Delta, described the awkwardness in a metaphorical manner.

A textile import and export company in Suzhou, Jiangsu Province,lost orders of more than eight million US dollars worth, or 30 percent of its regular export volume, from the special safeguard measures the United States began to impose on China since May.

"The trade agreement reflected that the United States was able to realize the benefits that Chinese textiles, priced low and reliable, bring to the American people," said Jin Changyi, generalmanager of Hangzhou Jinqiu Textile Co., Ltd. based in the capital city of Zhejiang.

His company, mainly producing cotton and silk clothing, exportsapproximately 50,000 pieces of apparel every year to the United States. Its customers include such big name as Walmart.

Jin said, "China and the United States avoided a trade war through negotiations, which provided a stable market scenario for both traders and manufacturers and helped reduce losses enterprises might incur in a deteriorated trade environment."

"As for enterprises, the worst is uncertainty in policy. The Sino-US deal achieved acceptable results for Chinese producers andexporters in the major issues of base number and growth rate," said Yang Shuncheng, a senior official with Hongdou Group based inJiangsu Province.

Despite the appeasement of trade disputes for the time being, the demerits, or Achilles' heel, of China's textile sector, including low technological content and lack of independently-developed brandname products, should not be ignored,experts say.

"Chinese enterprises must abandon an exclusive growth mode, andthe Government should support development of value-added products and China's own brandnames," said Shen Anjing, vice president of the Shanghai Research Institute of Textile Science.

Calling the Sino-US textile trade agreement "not satisfactory" but "acceptable" to his company, Yuan Jianzhong, manager of Shanghai Shanyuan Knitting Co. Ltd., on the Yangtze River Delta, said that his company will focus on increasing the added value of products in the future.