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Textile exports face higher tariffs
(Shenzhen Daily/Agencies)
Updated: 2005-04-18 15:20

China is considering raising export tariffs on certain categories of textiles in the hope of slowing a rapid growth in shipments to the United States and Europe.

Gao Yong, deputy director of the China Textile Industry Association, said the idea was to raise the tariff on products that had sharply increased in export volume over the past two months, while maintaining or lowering the tariff on other items. A decision had not yet been taken on the extent of the rise, but Gao said he expected one within the next month.

Last December, China announced an export tariff worth 0.2 yuan (US$0.02) to 0.3 yuan per item or 0.5 yuan per kilogram to allay concerns in the United States and Europe that Chinese textile exports might surge following the expiry of a decades-old global quota system this year.

But the tariff appears to have had little effect. This month the US Commerce Department released preliminary data showing that Chinese cotton knit shirts and blouses imports rose 1,250 percent in the first quarter, while cotton trousers surged 1,500 percent over the same period.

It is investigating whether Chinese imports are disrupting the US market, a step expected to lead to the imposition of safeguards on certain Chinese-made garments. The European Commission is expected to decide April 25 whether to limit textile imports from China.

Garment industry executives in China said they had learned in the past few days that the government might raise export tariffs. They had heard the tariff could rise as high as 2 to 4 yuan per piece. They said Chinese factories were likely to suffer if a higher tariff were imposed, because prices for garment orders were fixed several months before shipment.

Liu Qiong, general manager of Shanghai Hejing Textile Export Co, said, as a result of fears that the US government would curb Chinese textile imports, the group's US customers were afraid of signing orders with Chinese concerns.

Competition for export orders was intense. "Everybody strives for export orders while ignoring profitability. The competition here is chaotic."

Analysis of data by trade economists reveals that the rise in Chinese textile and clothing exports to the United States in the first two months of this year has mainly come at the expense of other exporters.

In January and February, US textile imports rose 14 percent, and clothing imports 15 percent, from a year earlier.

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