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Financial Times (London, England)
August 24, 2005 Wednesday
London Edition 3
SECTION: INTERNATIONAL ECONOMY; Pg. 5
LENGTH: 532 words
HEADLINE: Limits force Chinese clothing makers to tighten their belts
BYLINE: By ALEXANDRA HARNEY
DATELINE: HONG KONG
BODY:
Wang Yongjun has a message for European Union negotiators as they head into talks with Chinese officials over the dispute that has stranded millions of pullovers at European ports this summer.
"It's no good limiting (the export of) Chinese goods. Nobody benefits - neither retailers nor consumers," says the general manager of Shenzhen Yiqingxiang Industrial Development, a children's clothing manufacturer that is based in the southern Chinese city of Shenzhen.
Mr Wang is not alone in his discontent. Some Chinese manufacturers have been as inconvenienced as European retailers by the EU's decision to prevent any goods shipped after mid-July from entering the bloc. Not all of the manufacturers whose goods have been stranded in Europe have been paid.
While many were able to ship their goods early enough to avoid the delay, it has forced some Chinese producers to reconsider their strategy.
In June, China agreed to limit its exports in 10 textile categories to the EU for the next three years. When the quota for pullovers and trousers filled, the EU stopped issuing import licences, though more garments were en route from China.
The question of how the export quotas will affect domestic industry is foremost in the mind of Chinese negotiators. China's textile sector comprises about 22,000 companies, employing an estimated 19m people.
Willy Lin, vice-chairman of the Hong Kong Textile Council, said many companies had shifted production to countries such as Thailand, India, Pakistan and Sri Lanka as a result of the restraints on China.
"Since last year, the textile council has been telling manufacturers: don't give up your offshore manufacturing yet." But he added some of these countries' textile factories were "extremely unreliable".
Easyknit International Holdings, a Hong Kong company, moved production of ladies' clothing from China to Malaysia and Vietnam months before goods began getting stuck at European ports.
"I knew sooner or later (shipments to Europe) would be embargoed," said Koon Wing-yee, president and chief executive.
The move to south-east Asia has raised his costs 2-3 per cent.
Not all Chinese manufacturers can afford to invest in factories abroad. Mr Wang of Shenzhen Yiqingxiang says he is mulling a move overseas. For now, he plans to increase production of clothes for children under the age of two because this category has not been affected by the textile trade dispute.
Other Chinese producers have been forced to look closer to home. Run Xing Fa Garment has very few orders from Europe these days, as its customers have turned to suppliers in Vietnam, Cambodia and elsewhere.
Although exports generate 50 per cent of the group's revenues, Ma Wenguang, the general manager, says he will be focusing on the Chinese market from now on.
Not all Chinese textile makers have as many options. Guangzhou Panyu Jieyi Garment, whose products include jackets and casual wear, shipped its products to Europe early enough to avoid the embargo, but because all of its customers were in eastern Europe, it was forced to halt production earlier this month.
"Now, I have nothing to do," said a company official. "It might be another two or three weeks before I get busy again."
LOAD-DATE: August 23, 2005
August 24, 2005 Wednesday
London Edition 3
SECTION: INTERNATIONAL ECONOMY; Pg. 5
LENGTH: 532 words
HEADLINE: Limits force Chinese clothing makers to tighten their belts
BYLINE: By ALEXANDRA HARNEY
DATELINE: HONG KONG
BODY:
Wang Yongjun has a message for European Union negotiators as they head into talks with Chinese officials over the dispute that has stranded millions of pullovers at European ports this summer.
"It's no good limiting (the export of) Chinese goods. Nobody benefits - neither retailers nor consumers," says the general manager of Shenzhen Yiqingxiang Industrial Development, a children's clothing manufacturer that is based in the southern Chinese city of Shenzhen.
Mr Wang is not alone in his discontent. Some Chinese manufacturers have been as inconvenienced as European retailers by the EU's decision to prevent any goods shipped after mid-July from entering the bloc. Not all of the manufacturers whose goods have been stranded in Europe have been paid.
While many were able to ship their goods early enough to avoid the delay, it has forced some Chinese producers to reconsider their strategy.
In June, China agreed to limit its exports in 10 textile categories to the EU for the next three years. When the quota for pullovers and trousers filled, the EU stopped issuing import licences, though more garments were en route from China.
The question of how the export quotas will affect domestic industry is foremost in the mind of Chinese negotiators. China's textile sector comprises about 22,000 companies, employing an estimated 19m people.
Willy Lin, vice-chairman of the Hong Kong Textile Council, said many companies had shifted production to countries such as Thailand, India, Pakistan and Sri Lanka as a result of the restraints on China.
"Since last year, the textile council has been telling manufacturers: don't give up your offshore manufacturing yet." But he added some of these countries' textile factories were "extremely unreliable".
Easyknit International Holdings, a Hong Kong company, moved production of ladies' clothing from China to Malaysia and Vietnam months before goods began getting stuck at European ports.
"I knew sooner or later (shipments to Europe) would be embargoed," said Koon Wing-yee, president and chief executive.
The move to south-east Asia has raised his costs 2-3 per cent.
Not all Chinese manufacturers can afford to invest in factories abroad. Mr Wang of Shenzhen Yiqingxiang says he is mulling a move overseas. For now, he plans to increase production of clothes for children under the age of two because this category has not been affected by the textile trade dispute.
Other Chinese producers have been forced to look closer to home. Run Xing Fa Garment has very few orders from Europe these days, as its customers have turned to suppliers in Vietnam, Cambodia and elsewhere.
Although exports generate 50 per cent of the group's revenues, Ma Wenguang, the general manager, says he will be focusing on the Chinese market from now on.
Not all Chinese textile makers have as many options. Guangzhou Panyu Jieyi Garment, whose products include jackets and casual wear, shipped its products to Europe early enough to avoid the embargo, but because all of its customers were in eastern Europe, it was forced to halt production earlier this month.
"Now, I have nothing to do," said a company official. "It might be another two or three weeks before I get busy again."
LOAD-DATE: August 23, 2005
posted by Eastlaw at 12:04 AM
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