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Title: There's No Holding Back China's Textile Tide.
Authors: Magnusson, Paul
Kripalani, Manjeet
Mangi, Naween A.
Roberts, Dexter
Brady, Rose
Source: Business Week; 5/9/2005 Issue 3932, p59, 2/3p, 1c
Document Type: Article
Subject Terms: *INDUSTRIAL productivity
*INTERNATIONAL trade
*TEXTILE industry
INDUSTRIES -- China
UNITED States -- Foreign economic relations
CHINA -- Economic conditions -- 2000-
CHINA -- Foreign economic relations
EUROPE -- Foreign economic relations
Geographic Terms: CHINA
EUROPE
UNITED States
Company/Entity: WORLD Trade Organization
NAICS/Industry Codes: 339999 All Other Miscellaneous Manufacturing
313 Textile Mills
People: MANDELSON, Peter
PORTMAN, Rob
Abstract: Focuses on the impact of Chinese textile exports on international trade. Views of U.S. Trade Representative Rob Portman and European Union Trade Commissioner Peter Mandelson on economic relations with China; Impact of the removal of quotas on the productivity of China's textile industries; Guidelines imposed on China's exports due to its membership in the World Trade Organization; Potential for other low-wage nations, including India and Pakistan, to increase the number of imported goods to Europe and the U.S.; Long term implications of the abolition of quotas.
Full Text Word Count: 602
ISSN: 0007-7135
Accession Number: 16894432
Persistent link to this record: https://libproxy1.nus.edu.sg/login?url=http://search.epnet.com.libproxy1.nus.edu.sg/login.aspx?direct=true&db=buh&an=16894432
Database: Business Source Premier
View Links: Check NUS Libraries holdings
* * *
Section: News: International Outlook There's No Holding Back China's Textile Tide
Contents
Waiting in the Wings
On both sides of the Atlantic, the rhetoric about trade with China is intensifying. In Washington, U.S. Trade Representative nominee Rob Portman promised Congress on Apr. 21 he will take "a tougher approach" with Beijing than his predecessors. European Union Trade Commissioner Peter Mandelson declared on Apr. 24 that Europe is facing "a ruinous surge" of Chinese imports. French President Jacques Chirac called on Apr. 26 for more regulation of trade with China.
The immediate issue: Booming Chinese sales of items such as underwear, trousers, blouses, and shirts in both markets. Since quotas on clothing and textiles were removed worldwide on Jan. 1 after a 10-year phase-out, Chinese textile and apparel exports to the U.S. increased 62.5% overall in the first quarter of 2005, vs. the first quarter of 2004, and in some categories by 1,500% in a single month. China now controls 17% of the U.S. clothing market, up from 12% in December. The EU says imports of Chinese textiles in the first quarter rose anywhere from 51% to 534%, depending on the item. The result is an outcry from U.S. and European manufacturers and a rush to reimpose quotas on Chinese textiles and clothing within months. France has asked for emergency curbs sooner.
The irony is that even if new quotas are imposed, they are unlikely to provide relief for the U.S. and European industries. According to rules that China agreed to when it joined the World Trade Organization in 2001, such "safeguard" measures can last only until the beginning of 2008. China would still be allowed to increase its textile exports to the U.S. and Europe during that period by 7.5% a year. Moreover, says Kenneth Chan, spokesman for the Federation of Hong Kong Garment Manufacturers, mainland makers could revert to their practice of skirting quotas by having third countries ship Chinese goods.
Even if China loses some of its new export business, that doesn't mean work will flow back to Europe and the U.S. That's because China's low-wage competitors are gearing up to grab orders if buyers shift from China. Textile production "will still leave the U.S. and go to India and Pakistan," says Cao Xinyu, vice-chairman of the China Chamber of Commerce for Import & Export of Textiles. Pakistan imported $2.2 billion in machinery over the last five years to modernize its textile industry.
Waiting in the Wings
Aziz Memon, chairman of Karachi-based King's Group, a big knitware exporter, expects Pakistan's post-quota textile exports to grow by $1 billion -- or 12% -- a year. "India and Pakistan will be the [main] gainers from China's losses," he says. In India, Rajesh Mandawewala, CEO of Welspun India Ltd., the nation's No. 3 textile maker, says new factories coming on line should boost Indian textile exports from $15 billion last year to $50 billion in 2010.
Wal-Mart Stores Inc., which buys an estimated $350 million in clothing from India every year, is expected to double its purchases in two years, Indian experts say. "Slapping quotas on China won't make the U.S. [clothing] industry more competitive," says Erik O. Autor, a trade lawyer with the National Retail Federation in Washington. No matter. The outcry over job losses in the U.S. and Europe makes action against China inevitable, however futile a gesture it proves.
The McGraw-Hill Companies, Copyright 2005
PHOTO (COLOR): CHEAP LABOR: Chinese exports are soaring
~~~~~~~~
By Paul Magnusson, in Washington
With Manjeet Kripalani, in Bombay; Naween A. Mangi, in Karachi and Dexter Roberts, in Beijing, and bureau reports; Edited By Rose Brady
--------------------------------------------------------------------------------
Copyright 2005 The McGraw-Hill Companies, Inc. Copyright of Business Week is the property of McGraw-Hill Companies, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.
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--------------------------------------------------------------------------------
Title: There's No Holding Back China's Textile Tide.
Authors: Magnusson, Paul
Kripalani, Manjeet
Mangi, Naween A.
Roberts, Dexter
Brady, Rose
Source: Business Week; 5/9/2005 Issue 3932, p59, 2/3p, 1c
Document Type: Article
Subject Terms: *INDUSTRIAL productivity
*INTERNATIONAL trade
*TEXTILE industry
INDUSTRIES -- China
UNITED States -- Foreign economic relations
CHINA -- Economic conditions -- 2000-
CHINA -- Foreign economic relations
EUROPE -- Foreign economic relations
Geographic Terms: CHINA
EUROPE
UNITED States
Company/Entity: WORLD Trade Organization
NAICS/Industry Codes: 339999 All Other Miscellaneous Manufacturing
313 Textile Mills
People: MANDELSON, Peter
PORTMAN, Rob
Abstract: Focuses on the impact of Chinese textile exports on international trade. Views of U.S. Trade Representative Rob Portman and European Union Trade Commissioner Peter Mandelson on economic relations with China; Impact of the removal of quotas on the productivity of China's textile industries; Guidelines imposed on China's exports due to its membership in the World Trade Organization; Potential for other low-wage nations, including India and Pakistan, to increase the number of imported goods to Europe and the U.S.; Long term implications of the abolition of quotas.
Full Text Word Count: 602
ISSN: 0007-7135
Accession Number: 16894432
Persistent link to this record: https://libproxy1.nus.edu.sg/login?url=http://search.epnet.com.libproxy1.nus.edu.sg/login.aspx?direct=true&db=buh&an=16894432
Database: Business Source Premier
View Links: Check NUS Libraries holdings
* * *
Section: News: International Outlook There's No Holding Back China's Textile Tide
Contents
Waiting in the Wings
On both sides of the Atlantic, the rhetoric about trade with China is intensifying. In Washington, U.S. Trade Representative nominee Rob Portman promised Congress on Apr. 21 he will take "a tougher approach" with Beijing than his predecessors. European Union Trade Commissioner Peter Mandelson declared on Apr. 24 that Europe is facing "a ruinous surge" of Chinese imports. French President Jacques Chirac called on Apr. 26 for more regulation of trade with China.
The immediate issue: Booming Chinese sales of items such as underwear, trousers, blouses, and shirts in both markets. Since quotas on clothing and textiles were removed worldwide on Jan. 1 after a 10-year phase-out, Chinese textile and apparel exports to the U.S. increased 62.5% overall in the first quarter of 2005, vs. the first quarter of 2004, and in some categories by 1,500% in a single month. China now controls 17% of the U.S. clothing market, up from 12% in December. The EU says imports of Chinese textiles in the first quarter rose anywhere from 51% to 534%, depending on the item. The result is an outcry from U.S. and European manufacturers and a rush to reimpose quotas on Chinese textiles and clothing within months. France has asked for emergency curbs sooner.
The irony is that even if new quotas are imposed, they are unlikely to provide relief for the U.S. and European industries. According to rules that China agreed to when it joined the World Trade Organization in 2001, such "safeguard" measures can last only until the beginning of 2008. China would still be allowed to increase its textile exports to the U.S. and Europe during that period by 7.5% a year. Moreover, says Kenneth Chan, spokesman for the Federation of Hong Kong Garment Manufacturers, mainland makers could revert to their practice of skirting quotas by having third countries ship Chinese goods.
Even if China loses some of its new export business, that doesn't mean work will flow back to Europe and the U.S. That's because China's low-wage competitors are gearing up to grab orders if buyers shift from China. Textile production "will still leave the U.S. and go to India and Pakistan," says Cao Xinyu, vice-chairman of the China Chamber of Commerce for Import & Export of Textiles. Pakistan imported $2.2 billion in machinery over the last five years to modernize its textile industry.
Waiting in the Wings
Aziz Memon, chairman of Karachi-based King's Group, a big knitware exporter, expects Pakistan's post-quota textile exports to grow by $1 billion -- or 12% -- a year. "India and Pakistan will be the [main] gainers from China's losses," he says. In India, Rajesh Mandawewala, CEO of Welspun India Ltd., the nation's No. 3 textile maker, says new factories coming on line should boost Indian textile exports from $15 billion last year to $50 billion in 2010.
Wal-Mart Stores Inc., which buys an estimated $350 million in clothing from India every year, is expected to double its purchases in two years, Indian experts say. "Slapping quotas on China won't make the U.S. [clothing] industry more competitive," says Erik O. Autor, a trade lawyer with the National Retail Federation in Washington. No matter. The outcry over job losses in the U.S. and Europe makes action against China inevitable, however futile a gesture it proves.
The McGraw-Hill Companies, Copyright 2005
PHOTO (COLOR): CHEAP LABOR: Chinese exports are soaring
~~~~~~~~
By Paul Magnusson, in Washington
With Manjeet Kripalani, in Bombay; Naween A. Mangi, in Karachi and Dexter Roberts, in Beijing, and bureau reports; Edited By Rose Brady
--------------------------------------------------------------------------------
Copyright 2005 The McGraw-Hill Companies, Inc. Copyright of Business Week is the property of McGraw-Hill Companies, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.
Top of Page
EBSCOhost
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