China to raise export tariffs on 74 clothing categories
China will raise export tariffs on exports of 74 classes of clothing and textile products from June 1, the Ministry of Finance said on Friday, a gesture that might help to appease Western trading partners.
Products listed included trousers, T-shirts and underwear.
"The decision was approved by the State Council," the ministry said in its statement.
Under the approved adjustment, tariffs on three categories of clothing, including knitted women's underwears and cotton men's underwear, would be lowered from the current 0.20 yuan to 0.05 yuan per unit.
Also, tariffs on two categories of clothes accessories, now at 0.5 yuan per unit, could be abolished.
For other clothing items not included in adjustments, the export tariffs approved on January 1, 2005 will continue to apply, the statement said.
China had imposed tariffs of 0.2 to 0.3 yuan per item on 148 categories of
exports from January 1, 2005 -- just as a decades-long quota regime
limiting its textile exports came to an end.
Sun Huaibin, spokesman for the Council, said that the Council understood the decision of the government as "it is for the purpose of helping establish a new world textile trade order and ease the trade friction that the government has made the concession."
The American Chamber of Commerce in China welcomed China drastic hike of the export tariffs, calling it a "constructive approach" toward resolving trade differences.
However, Sun noted, the tariff hike would surely result in an increase of cost and decrease of profits for domestic companies. Some companies might sustain losses and textile workers might lose their jobs.
"This is what we don't want to see," said Sun.
Zhang Peisen, head of a policy research group of the State Administration of Taxation, said the move, though painful for Chinese manufacturers and workers, could also help the textile sector readjust their export strategies and introduce more advanced technology to increase the added value of their products.
But Zhang stressed that China's decision on the tariff hike "doesn't mean that the US and EU restrictions are justified."
"I still doubt the figures released by the United States on Chinese textile
imports during the past four months, and I think their moves are simply not fair
because they just go against the principle of free competition," he said.