BEIJING, (AFP) - China's textile sector is looking to shift some production offshore as it braces for the announcement this week of more limits on its exports to the United States, industry insiders said.
A ruling by Washington on safeguards against five categories of Chinese clothing is set to add new urgency to the strategic rethink underway among mainland textile makers.
Edward Cheung, an analyst with Hong Kong-based Tai Fook Research, said major Chinese manufacturers are considering moving part of their operations to other countries to combat further restrictions against their trade in US markets.
"Everybody is expecting such quotas to be imposed and now they are trying to shift their production someplace outside of China, trying to shift more to quota-free countries," he said.
Liang Jiesheng, public relations manager with socks and underwear maker Langsha, confirmed the company's future production and export strategies will be partly decided by developments in China's trade row with the United States.
"We are considering setting up a plant on US soil through the takeover of local textile makers if the US continues to set limits on Chinese socks and other textile products," he said, without giving details of takeover targets.
Shenzhou International Group Holdings, a knitwear manufacturer based in the eastern Chinese city of Ningbo, is looking to produce textiles in Cambodia for export to the United States and Europe, according to Cheung.
"They're trying to set up offshore," he said of China's larger industry players. "But of course some less competitive, smaller ones may not have the capacity to do so."
Washington has imposed restrictions on imports of about 10 types of Chinese apparel and fabrics in the wake of the scrapping of a global quota system on January 1.
US textile trade associations argue a flood of China-made textile imports has disrupted local markets.
They cite year-to-date data in July showing, for instance, an 879 percent surge in China's cotton and man-made fiber skirt exports to US markets.
In response to their petitions, Washington said in August it would consider limiting imports of five extra categories of Chinese textiles, ranging from socks to pajamas.
The US Department of Commerce confirmed that the US Committee for the Implementation of Textile Agreement (CITA) was due to make a determination on the products by November 1.
The CITA deadline for a decision on whether to accept for consideration an industry request for further limits on cotton terry and other pile towels from China also falls on the same date, it added.
Rulings on earlier industry petitions have been postponed in recent months as the US and China tried to broker a broad agreement on their textile trade.
But Beijing's hopes of further reprieves are likely to have dimmed after the last round of negotiations with Washington on the issue ended prematurely and inconclusively in the Chinese capital in October.
At the end of the talks, neither side set a date for further negotiations, despite earlier commitments to seek a comprehensive deal to limit annual growth in Chinese textile exports to the US to levels acceptable to both sides.
"I'm not as optimistic (of agreement being reached) as before, since the last round of talks ended early," Cheung said. "They might need more time to sit down and try to resolve the problem."
