At the beginning of 2005, the quota system for textile imports expired for World Trade Organization members. In that year, Chinese textile exports recorded unprecedented growth. But not all textile producers were making money.
"That year, price competition was severe. Domestic textile exporters all lowered their prices to get more overseas orders."
Yan Lei is the vice manager of China Textile Resources Corporation.
"The profitability in the textile industry dropped sharply in that year. Take our company for example, the number of overseas orders we received reduced by 20-30 percent. That amounted to a loss of around three million US dollars."
Given such a situation, some of China's foreign trade partners adopted new protectionist measures. Starting in June 2005, the EU imposed temporary quotas on 10 categories of Chinese textile products, including trousers and T-shirts, which exerted another blow to Chinese textile producers.
Fortunately, the two sides finally came to an agreement last month. Starting next year, China and the EU will adopt a year-long double checking system on 8 categories of textile products.
Sun Huaibin is the spokesman for China National Textile and Apparel Council.
"For Chinese textile exporters, they need to acquire licenses before exporting. The 'double checking system' will track the issuance of licenses for export in China and the importation of goods into the EU. The general goal is to build a healthy and active environment for textile trade between China and the EU."
In fact, the textile quota that the EU imposed on China has been increasing steadily in the past few years, which is regarded as a foundation for a smooth transition to free trade in textiles.
Yan Lei says although competition will still be there, they don't have to worry about history repeating.
"With the appreciation of the Renminbi and the lowering of export rebate rate, Chinese textile exporters didn't stock up their products as they did before 2005."
Yan Lei from China Textile Resources Corporation says he believes the removal of the quota benefits domestic textile exporters.
"Costs are lowered, procedures are simplified and a level playing field is guaranteed for all domestic textile manufacturers, no matter big or small."
The EU has always been a popular destination for Chinese textile exports. Last year, China exported over 22 billion US dollars worth of textile products to the EU.
European consumers also speak highly of these products.
"I think the quality, the originality and the creativity of these clothes are going better and better."
"I like their styles of clothes and I don't care that much if they're made in China or Germany. As long as they look good, and I'll pick them. I like them."
That's Anne Valerie from France and Alexandra Müller from Germany.
What they said coincides with the belief held by Joergy Wuttke, president of the EU Chamber of Commerce in China. A supporter of free trade, Wuttke said the lifting of the quota would be great for European consumers.
"Chinese products are good, especially the textile products. They'll get cheaper and with good quality. It will create more jobs in China, which translates to they'll have more demand in textile machinery, which mostly comes from Germany. So I think this lifting of quota is a good thing for both sides."
Indeed, the increase of trade volume benefits both sides. In the first eight months of this year, China bought 1.5 billion US dollars worth of textile machinery from the EU, a growth of nearly 30 percent over the same period of last year.
