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Firms taste fruit of China-EU agreement
Updated: 2005-06-19 11:05

One week since China and the European Union reached agreement on textile and garment trade, Chinese clothing firms have begun to see its rewards -- both orders and prices are on the rise.

The agreement cleared up the uncertainties that both importers and exporters worried about and brought new opportunities for Chinese textile producers and traders, analysts said.

"Over the past week, our orders have recovered quickly," said Li Lingmin, vice-president of the China National Textiles Imp. & Exp. Corp. during an interview with Xinhua Saturday. "The price is also on the rise. The gloomy days are now gone."

Gloom set in when the United States and the EU announced they would impose restrictive measures on imports of some categories of China's textile and garments earlier this year. The effects of the restrictions were quickly felt. Trade deals decreased at the China Import and Export Fair in Guangzhou last spring, compared with otherwise increasing trade, except in unusual times like 2003 when SARS broke out.

Though Li did not specify the figure of the growing orders and prices, many textile firms reached by Xinhua confirmed better business, including accepting orders and getting bank loans.

Chinese clothing firms have generally welcomed the agreement reached by Chinese Minister of Commerce Bo Xilai and EU Trade Commissioner Peter Mandelson in Shanghai last Saturday following a ten-hour closed-door consultation.

China's Ministry of Commerce announced last Wednesday that the country's growth rate for export of pullovers, trousers and blouses to the European Union will be limited to within 10 percent in 2006 and 2007, while that for sheets and table cloth will be restricted to 12.5 percent annually, citing the China-EU memorandum of understanding.

The European Union has agreed to stop investigations on 10 categories of textile products from China, including cotton cloth, T-shirts, pullovers, trousers, blouses, sheets, dresses, brassieres, table cloth and flax yarn. All the agreed maximum growth rates announced by the ministry are higher than the 7.5 percent previously proposed by the EU.

Chinese firms have said the agreement has created a stable environment for the manufacturing and exporting of textile and garments.

"It not only created a stable environment for exports of the ten categories, but also created favorable development conditions for exports of other categories," said Gao Yong, vice-chairman of the China National Textile and Apparel Council.

The China-EU agreement has been hailed as "win-win" for China, the EU and other developing countries, and has received warm reception in the EU.

Although critics have blamed the restriction of textile imports by the EU and the United States as "protectionism" as the textile quota regime ended worldwide since January 1, 2005, Chinese businessmen, like Li Lingmin, said the China-EU deal is a "pragmatic" and "good" agreement.

"It was the fruit of high wisdom," he said. "You cannot have expected there would be no barrier to textile trade after the abolition of the quota regime. So I think the deal is pragmatic and good for all."

He said his firm would shift its focus to exporting more hi-tech and high value-added categories of clothing, like suits, jackets and windbreakers.

Like Li, many Chinese manufacturers and traders of clothing have said they would restructure their production and trade by 2007, the date set by the China-EU deal.

Wu Baozong, general manager of the Beijing Jinggong Garments Import and Export Co Ltd, said his firms have decided to develop more high valued products and tried to establish a better market network in foreign countries.

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