China still poised to dominate textile markets despite restrictions - UBS - Forbes.com
AFX News Limited
China still poised to dominate textile markets despite restrictions - UBS
05.25.2005, 07:30 AM
HONG KONG (AFX) - China's textile industry still looks poised to dominate the global textile goods markets in the long term, with select companies well-positioned to overcome any further US safeguards, UBS Investment Bank said.
The US recently announced safeguard restrictions against China on seven product types of textile and apparel products, including trousers, shirts and blouses and cotton yarn after the US saw a surge of textile imports from China in the first three months of the year.
'While the safeguards, which limit export volume growth to 7.5 pct in 2005, will put pressure on China's textile stocks in the near term, they will have little impact on investment decisions as most manufacturers had already anticipated them and adopted a cautious stance,' UBS said in a media statement.
UBS said it expects the US to announce further safeguards in the near future to slow China's gain in market share.
'However, over the long-term China has the potential to dominate the textile goods chain with a global market share of between 60 to 70 pct. But in light of political pressure and trade remedies, this is likely to take time,' UBS Investment Bank researcher Erica Poon Werkun said.
She said UBS favors companies 'well-positioned for top-line growth and have the ability to sustain margins.'
The US imposed the restrictions almost five months ago after it lifted quotas on Chinese textiles.
Although the quotas have been abolished, UBS noted that there has been little change in the way Chinese manufacturers and buyers carried out their operations.
'The abolition of the textile quota system for China's textile industry is turning out to be more of a whimper than a bang,' she said.
leonora.walet@xfn.com
lw/net
China still poised to dominate textile markets despite restrictions - UBS - Forbes.com
China still poised to dominate textile markets despite restrictions - UBS
05.25.2005, 07:30 AM
HONG KONG (AFX) - China's textile industry still looks poised to dominate the global textile goods markets in the long term, with select companies well-positioned to overcome any further US safeguards, UBS Investment Bank said.
The US recently announced safeguard restrictions against China on seven product types of textile and apparel products, including trousers, shirts and blouses and cotton yarn after the US saw a surge of textile imports from China in the first three months of the year.
'While the safeguards, which limit export volume growth to 7.5 pct in 2005, will put pressure on China's textile stocks in the near term, they will have little impact on investment decisions as most manufacturers had already anticipated them and adopted a cautious stance,' UBS said in a media statement.
UBS said it expects the US to announce further safeguards in the near future to slow China's gain in market share.
'However, over the long-term China has the potential to dominate the textile goods chain with a global market share of between 60 to 70 pct. But in light of political pressure and trade remedies, this is likely to take time,' UBS Investment Bank researcher Erica Poon Werkun said.
She said UBS favors companies 'well-positioned for top-line growth and have the ability to sustain margins.'
The US imposed the restrictions almost five months ago after it lifted quotas on Chinese textiles.
Although the quotas have been abolished, UBS noted that there has been little change in the way Chinese manufacturers and buyers carried out their operations.
'The abolition of the textile quota system for China's textile industry is turning out to be more of a whimper than a bang,' she said.
leonora.walet@xfn.com
lw/net
China still poised to dominate textile markets despite restrictions - UBS - Forbes.com
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