Free of quotas, China textiles flood USA market.


American manufacturing plants are being closed
and thousands of jobs are being lost.

Free of quotas, China textiles flood USA market
by David Barboza & Elizabeth Becker, New York Times, Mar 10, 2005

SHANGHAI, March 9 - In the first month after the end of all quotas on textiles and apparel around the world, imports to the United States from China jumped about 75 percent, according to trade figures released by the Chinese government. The statistics bear some of the first evidence that China's booming textile and apparel trade, unhampered by quotas, could be prepared to dominate the global textile trade and add to trade tensions around the world. The quotas came to an end on Dec. 31 as a result of an international agreement reached in 1993.

In January, the United States imported more than $1.2 billion in textiles and apparel from China, up from about $701 million a year ago. Imports of major apparel products from China jumped 546 percent. Last January, for example, China shipped 941,000 cotton knit shirts, which were limited by quotas; this January, it shipped 18.2 million, a 1,836 percent increase. Imports of cotton knit trousers were up 1,332 percent from a year ago. These figures may be understated because China ships a large part of its goods through Hong Kong, and those shipments are not included.

Fears that China is going to flood the world market with cheap textile exports have already inflamed tensions between Washington and Beijing because of worries about American manufacturing plants being closed and thousands of jobs being lost. Already, in January, the first month after global quotas were lifted, 12,200 jobs were lost in the United States apparel and textile industries, according to the Bureau of Labor Statistics. Some analysts have predicted that China could capture as much as 70 percent of the American market in the next two years. Before the end of quotas, about 16 percent of apparel sold in the United States came from China.

Last year, the United States trade deficit with China set a record of $162 billion, making it the largest trade imbalance ever recorded by the United States with a single country. To be sure, some textile importers say this phenomenon may be a one-time surge. Companies, for instance, may have put off shipping goods at the end of last year to avoid the quotas. "Nobody knows if it's going to last," said Andrew Grossman, who runs GAV, a company that designs and manufactures clothes for Calvin Klein and Emanuel Ungaro. "So you're not seeing it passed on to the consumer."

Because of uncertainty over currency fluctuations and the process of lifting quotas, apparel producers like GAV have not reduced their prices to retailers. Moreover, poor countries like Bangladesh, Cambodia and Sri Lanka are pressing Washington to pass legislation giving them lower tariffs to help support a crucial source of their livelihood. Some trade experts say that China has achieved its status over the years by providing questionable bank loans and subsidies to its industry.

Still, it is clear that efforts to move toward more open trade have freed China and other countries of many textile and apparel quotas and restrictions. And they have set the stage for China to become a global textile and apparel behemoth, lowering clothing prices for consumers around the world but upsetting and rewriting current trade balances. The January evidence showed blockbuster gains for Chinese textile and apparel makers - a surge that some textile experts had been predicting long before the quotas came to an end. The 25 countries that are part of the European Union also registered big increases, importing about $1.4 billion worth of textile and apparel goods from China, up from about $975 million a year ago, a jump of 46 percent. "This is not a surprise; it is not a revelation," said Donald Brasher, president of Global Trade Information Services in Columbia, S.C., which tracks and releases trade figures from around the world and was the first to publish China's official trade statistics. "We're going from a quota regime to a quota-free regime. And China's one of the most competitive producers. What do you expect?"...

US importers back China textiles (causing producers market disruption). BBC, Dec 2, 2004

CHINESE TAKE-OVER and 9.Keeping Masses Down and 6.Super-States and CORPORATE COMMUNISM

Jackie Jura
~ an independent researcher monitoring local, national and international events ~