Ministry of Commerce spokesperson Chong Quan announced Sunday that export duties will be imposed on certain textile products.

It came in response to concern from trading partners over the effects of lifting their quotas on Chinese imports in the new year.

The duty will be collected on the basis of quantity rather than value, so as to encourage higher quality goods, said Chong.

The move is one of eight measures being taken by the ministry to ensure a smooth transition to a quota-free environment.

Textile exporting information will also be released in a timely manner, and enterprises will be encouraged by government to export in an orderly and self-disciplined way.

"We will encourage Chinese enterprises to invest abroad, and provide them with policy support in their foreign investment," Chong said.

All quotas restricting textile and clothing trade between World Trade Organization (WTO) members are to be eliminated by December 31 in line with the Agreement on Textiles and Clothing.

Some have predicted that Chinese textile goods, supported by cheap labor costs, will swamp the world market and force others out. About 72 textile and apparel groups from 36 countries signed the Istanbul Declaration urging the WTO to extend quotas to the end of 2007.

Pressure has also been put on the government to cap textile exports. Grant Aldonas, the US Commerce Department's undersecretary for international trade, visited China in September to seek an agreement on voluntary caps.

The EU urged Premier Wen Jiabao to exercise "moderation" from January once quotas are lifted. Wen met with officials during his EU trip last week.

The US and EU are expected to abolish quotas on a further 126 items by 2005, which will account for 60-61 percent of their total textile imports.

Liang Xing, president of the Shandong Weiqiao Textile Company, said the export duties are welcomed, noting that it will reduce disputes and encourage better value goods.

"I prefer a steady growth rate rather than the fear of uncertainty because of a dispute," he said.

At a closed-door meeting on the post-quota period in October, it is reported that 70-80 percent of the 400 company representatives present supported stricter industry management.

The WTO rules allow members to limit imports on the grounds that their local markets would otherwise be disrupted, and many expect this provision to be used against Chinese imports once quotas have been removed.

The US agreed to consider applications made in November by members of its textile industry to impose safeguard measures on imports of Chinese-made cotton pants, shirts and sheets. Chinese officials believe that this would be an abuse of the WTO regulations.

(China Daily December 13, 2004)