China took decisive action to ease rising concern from trading
partners by hiking textile tariffs on more than 70 products by 400
percent.
The rise on 74 Chinese-made textile products will come into
force from June 1, China's Ministry of Finance announced on
Friday.
The rise sent panic through the country's textile and garment
industry. Some have predicted factory closures and job losses.
The Ministry of Finance said in a statement on its website
tariffs would rise from 0.2 yuan (2.4 US cents) to 1 yuan (12 US
cents) per unit. The largest tariff increase would be from 0.3 yuan
(3.6 US cents) to 4 yuan (48 US cents) per unit. And a new tariff
of 3 yuan (36 US cents) per kilogram will be imposed on exports of
flax yarn.
According to spokesperson for the Ministry of Commerce Chong
Quan, the decision is aimed to further promote the upgrading of the
Chinese textile industry and safeguard the rights of enterprises
that deserve to benefit from the integration of the textile
trade.
"It shows the Chinese government's priority is to ensure steady
growth of the international textile trade," Chong said.
"We had hoped that the increase margin would be smaller and a
two or three-month period would be left for the companies to digest
such hikes," a textile industry insider told China Daily
yesterday.
The source said the measures would impose a great threat to
textile and garment producers, particularly some small-sized
factories.
Shell-shocked manufacturers
Some Chinese textile manufacturers said they were shell-shocked
after the announcement and claimed the rise will drastically slash
their profit margin.
"Our profit will be squeezed as we currently only earn 1 yuan
(12 US cents) to 2 yuan (24 US cents) from each shirt," said Guo
Jiahong, an official of Yangzhou Shuaimeisi Garments Ltd.
He said he was worried the government's decision might make it
more difficult for the company to honor current four-month
orders.
Guo said earlier protective measures initiated by the United
States had practically shut the door to the US market for his
company which produces cotton shirts.
Some entrepreneurs predicted that a number of textile
manufactures would go bankrupt by August or September.
Sun Huaibin, spokesman for the China Textile Industry Council,
was quoted by the Xinhua News Agency as saying his council
understood the decision .
He said China, as a responsible country, made the concession in
a bid to establish a stable trade order and ease current trade
frictions. However, he said, Chinese companies would have to make
sacrifices.
The hike was welcomed by China's trade partners. "We are
encouraged by this move," said Charlie Martin, president of the
American Chamber of Commerce in China.
He said this voluntary step by Beijing demonstrated China was
adopting a constructive approach and was sensitive to the hardships
which the removal of quotas has brought for some American
workers.
The Ministry of Commerce on Friday also called for observation
of free trade principles and rules of the World Trade
Organization.
100,000 job losses
The US Department of Commerce and the European Union launched an
investigation into certain categories of textile products to
consider whether to re-impose quotas on these commodities last
month.
The US government announced initiated safeguard measures against
three categories of textile products earlier this month; similar
measures were imposed on another four categories last Thursday.
As a result, analysts predicted, about 100,000 Chinese workers
in this sector might lose their jobs.
(
China Daily May 21, 2005)
