Quotas on textile and clothing exports, used by the US and European Union for four decades to protect domestic producers, will be abolished next year under a WTO agreement dating from 1994. Experts say it will certainly increase China's world market shares in the textiles and clothing sector in the future.
However, Chinese textile manufacturers should prepare themsleves to cope with new challenges brought by the cancellation of the quotas. CRI reporter Zhou Yun takes a closer look.
Zhao Hanyu, the chairman of the board of the Tianlong Import & Export Company Limited, says quota restriction is one of his headaches, since it forces the company to buy quota allowances from brokers to export textile products.
"The export of our products has been restricted by quotas in the U.S. and the European Union. And our export prices have to include prices for both cost and quota allowance, which has definitely affected our profits."
Actually, the quota restrictions, created by industrialized nations in the 1960s to protect domestic textile manufacturers from cheap overseas imports, has seriously affected many of China's textile exporters.
However, according to the World Trade Organization Agreement on Textile and Clothing, the quota on textile products and clothing would be cancelled in four stages starting from 1995. The aim of this agreement was to finally realize free trade for WTO members. And from January 1st of next year, all quota restrictions will be abolished.
It is expected that the removal of restrictions will make China the world's leading manufacturer of textiles and clothing by next year. In fact, the World Trade Organization predicts that China alone will account for more than half of the worldwide textile market by then.
Yang Zhimin is an economic expert with the Chinese Academy of Social Sciences. He says not only China, but the whole world, will benefit from the abolition.
"Not only will many developing countries, who are the main sources of textile exports, achieve more profits; consumers of developed countries will also be able to get more diversified types of textile products at cheaper prices."
However, experts warn that after the quota barring the free flow of textiles is eliminated next year, a mechanism should be set up to prevent possible malicious price competition amongst Chinese textile companies, which will merely invite anti-dumping accusations and increase international trade friction.
Yang Zhimin says after the elimination of the quota restriction, the most important thing for Chinese textile exports is not to eagerly grab more market share, but to improve its own market competitiveness.
"We should pay more attention to the quality of our exports instead of merely chasing its quantity by offering lower prices. Large amounts of exports to developed countries will arouse anti-dumping accusations. I think the proper way is to adopt more advanced technology to increase added-value of our products and also to create our own famous brands."
Zhao Hanyu, the chairman of the board of the Tianlong Import & Export Company Limited, says quota restriction is one of his headaches, since it forces the company to buy quota allowances from brokers to export textile products.
"The export of our products has been restricted by quotas in the U.S. and the European Union. And our export prices have to include prices for both cost and quota allowance, which has definitely affected our profits."
Actually, the quota restrictions, created by industrialized nations in the 1960s to protect domestic textile manufacturers from cheap overseas imports, has seriously affected many of China's textile exporters.
However, according to the World Trade Organization Agreement on Textile and Clothing, the quota on textile products and clothing would be cancelled in four stages starting from 1995. The aim of this agreement was to finally realize free trade for WTO members. And from January 1st of next year, all quota restrictions will be abolished.
It is expected that the removal of restrictions will make China the world's leading manufacturer of textiles and clothing by next year. In fact, the World Trade Organization predicts that China alone will account for more than half of the worldwide textile market by then.
Yang Zhimin is an economic expert with the Chinese Academy of Social Sciences. He says not only China, but the whole world, will benefit from the abolition.
"Not only will many developing countries, who are the main sources of textile exports, achieve more profits; consumers of developed countries will also be able to get more diversified types of textile products at cheaper prices."
However, experts warn that after the quota barring the free flow of textiles is eliminated next year, a mechanism should be set up to prevent possible malicious price competition amongst Chinese textile companies, which will merely invite anti-dumping accusations and increase international trade friction.
Yang Zhimin says after the elimination of the quota restriction, the most important thing for Chinese textile exports is not to eagerly grab more market share, but to improve its own market competitiveness.
"We should pay more attention to the quality of our exports instead of merely chasing its quantity by offering lower prices. Large amounts of exports to developed countries will arouse anti-dumping accusations. I think the proper way is to adopt more advanced technology to increase added-value of our products and also to create our own famous brands."
