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China warns against textile quotas as exports struggle

Published 01/21/2009, 10:09 PM
Updated 01/21/2009, 10:16 PM

BEIJING, Jan 22 (Reuters) - China opposes any return to the quotas that capped its textile exports to the United States and Europe and will seek steady growth in those exports despite dim prospects in 2009, a senior Chinese official said.

Washington and Brussels set the quotas to restrict Chinese-made textiles and garments in 2005, claiming the lapse of previous global restrictions was giving way to a surge of cheap products from China that threatened their own manufacturers.

Those schemes agreed with China lapsed at the end of 2008. And squeezed by the global economic slowdown, some U.S. and EU industry groups have called for fresh limits.

But a senior Chinese Ministry of Commerce official told an official newspaper on Thursday that his country's textile firms were in enough trouble already but would exercise voluntary discipline to avoid any export surge.

"We believe that after 2008, textile trade should abide by the principles of free trade and importing countries should not erect more trade barriers," the unnamed official told the International Business Daily, an official paper of the Commerce Ministry.

The new Obama administration in Washington has said that China's trade surplus is unacceptable and it wants Beijing to help balance flows. Brussels also faces pressure from recession-hit manufacturers.

But the Chinese commerce official said his country's textile firms were also struggling and their exports were likely to slow in 2009, following a fall in growth in 2008.

Last year, the official said, China's textile and garment exports were worth $185 billion. This was 8.2 percent more than in 2007, but a fall of 10.7 percentage points on growth that year. In November 2008, China's textile exports fell 3.8 percent year-on-year to less than $5 billion, the official Xinhua news agency reported last month.

Growth in 2009 looks worse, the official said, blaming rising labour costs, the rising value of China's yuan currency, and weakened export demand. But with some 20 million jobs in the textile sector, China wants "stable growth" in exports this year.

"At the same time, we must beware of international trade protectionism rearing its head," the official said.

"Strengthen industry coordination and self-discipline, with orderly exports that avoid excessively fast growth in exports of certain products." (Reporting by Chris Buckley; Editing by Nick Macfie)

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