Chinese Textile Exports Are Soaring

By Robert S. Reichard, Economics Editor

As expected, Chinese textile and apparel exports have risen sharply since China’s admission to the WTO this year — and the trend is likely to continue. Prior to China’s accession to the WTO January 1, its textile bilateral quota agreement with the United States provided for an average annual growth of about 1 percent

But when China joined the WTO, it was entitled to “catch up” on a seven-year quota phase-out enjoyed by other WTO members. A sampling of recently decontrolled categories demonstrates just how quickly and effectively China can move into quota-free markets. While U.S. imports from the world, including the major Asian suppliers, were down during the first quarter of this year, Chinese exports showed huge gains. In the case of infantwear, Chinese exports were up threefold, while exports from other Asian nations declined by as much as 50 percent. A similar pattern held true with luggage, brassieres, gloves, knit fabrics, robes, dresses and gowns. In some cases, the Chinese gains were made at the expense of Mexico, where many of the exports contain U.S.-made fabric and yarn.

Charles Bremer, international trade vice-president for the American Textile Manufacturers Institute (ATMI), expects the trend to continue and even increase during the second quarter. Bremer says the trade pattern demonstrates China can produce “any product in any quantity at any price.” That capability has aroused new concerns in the textile industry about what will happen when all textile quotas are eliminated January 1, 2005, and tariffs will be the only means of limiting import growth. The United States has so-called “safeguard” laws that permit it to impose quotas for three years where market disruption occurs, but in the past, that has been a time-consuming, expensive and often unsuccessful procedure.

July 2002