30-Year Reform and Opening up - Export Review

The forth Phase(2005 – 2008) : Post-quota Era

Gain or Lose

The Declaration was made  out  in  a  funk,  not  in  the mood  of  reason. China's  export  in  the  following  years  in  post-quota  time  did  not  appear "monopolistic "or "disastrous" as underlined in their urgent call to WTO, nor was the case that "China's massive growth has come at the expense of virtually  all  other  participants  in  the market."

The  hard  fact  is  that many developing countries have partaken gains  at  annual  growth  rate  on  the 4-year  average  in US  imports  in  a shinny contrast  to a gloomy picture of  post-quota  era  for  developing countries as deliberately depicted in Istanbul Declaration.The EU-Extra  import  from  2004 to  2007 also  shows a satisfying growth from  some  developing countries,  some  of which were performing  quite well  in  annual growth on average. 

Turkey still remains the second largest supplier in export value to EU market  after China,  also  the second strongest supporter  and signatory  in  Istanbul Declaration after USA. Will Turkey continue to play the  second  violin  to China  in the global orchestra when  the new music  of  quota-free  composition starts to play next year?

2005, a Year to Remember

When the dawn broke to welcome the new year  in, the quota-free  year  of  2005 moved  into  hard  times  for China, even  though  the  first  few months  saw  a  rapid  growth of  textile  and  clothing  export. Export  has  ballooned  ever since  the frst  year of  the past Tenth Five-Year Plan period (2001-2005)to  fly  up  to US$117.535  billion  in  2005(notice: this export  value  is  a  bit  higher  than  the  figure  given  in the  following  table  according  to CNTAC' s  statistics),  up  by 121.6% on value terms against $53.044 billion in 2001.  

To US market, Chinese  textile  and  apparel  shipment amounted  to  $19.576  billion  in  2005,  66.09%  higher  than 2004, Of  this  total,  textile  shipment  comes  up  to  $6.01 billion,47.38%  up  the  previous  year while  apparel  rises  by 76% for a wrap- up with $13.566 billion.

To EU market, China shipped  its  textile and clothing  for $18.863 billion in 2005, a rise by 55.3% vs. 2004, with $5.3 billion  for  textiles,  up  by  35.17%,  and  $13.563  billion  for clothing, 63.76% higher than that of 2004.
 
To Japan, Chinese shipment to this traditional destination assumes  a moderate  growth  to  arrive  at  $18.103  billion  in 2005,  a  slight  step-up by 5.54%. The  totality breaks down into  $3.448  billion  for  textiles,  11.17%  up,  and  $14.654 billion  for  apparel,  4.29%  over  2004. Apart  from  the  long-troubled  political  disputes &  diplomatic  apathy between these  two  countries  as  a  result  of  Japanese PM  Junichiro Koizumi's  visits  to Yasukuni Shrine  that  has memorial tablets  to  class-A war  criminals,  the  bilateral  trade  seems uninfected with  this  ailing;  Japan  still  remains  the  largest venue for apparel shipment from China.

To Hong  Kong,  the  Chinese mainland  shipment  to  this  former British  colony was on  a  continuous drop  by  14.59%  to  finish  $14.843 billion, with  $8.059  billion  for textiles, 5.3% up, and $6.784 billion for apparel, surprisingly 30.24% down as  impacted  by  global  textile quota stoppage.  Pressure was mounting while fear was  growing  that China might corner a monopolistic market share to drive out all the other participants in EU market,  the  local  textile  and clothing manufacturers urged EU to do something to stop the trend.

In  fact,  since  the  longstanding system  of  textile  quotas  expired  at the  beginning  of  2005, European textile producers had been lobbying for  a  new  form  of  limits  on what they claimed to be a "food of cheap Chinese garments." Under pressure from  domestic manufacturers, the  European Commission,  the executive  arm of  the 25-nation EU, sought a deal with China  in June  in Shanghai to reimpose restraints  on 10 categories of textile goods.

After marathon  negotiations between  Chinese  Commerce Minister Bo Xilai and visiting EU  Trade  Commissioner  Peter Mandelson,  China  and  the  EU entered  a  deal  on  a  very  late  night of  June  10  and  agreed  that  the annual  growth  rates  of  exports  to the European market  for  the  ten lines  of Chinese  products would be  controlled  between  8  and  12.5 percent  from  June 11, 2005  to  the end of 2007.

The  likely  deal was  also  struck in  London  on November 8 in  the same year between China and USA to cap 21 categories in a  bilateral arrangement. The Sino-US and Sino-EU textile agreements cover almost the same  range of  textile products. Al though  the  Sino-US textile agreement  covers  21  categories of  products,  in  fact,  the US  side divides  one  category  into  several kinds. In spite of all the inconveniences and  restrictive measures  on  trade, US textile safeguard deal with China is  due  to  expire  at  the  end  of  this year. With all of  the  uncertainties and concerns expressed in different countries about what  free  trade in  textiles  and  clothing would mean,  something might be done, which is growing more  obviously evident  as  the National Council  of Textile Organizations  (NCTO),  a US textile manufacturers'  body,  has been  campaigning  hard  against the  perceived  dangers  of  a  surge in Chinese  exports  to  the United States  after  quotas  end  on Dec.  31.  It has  been  rallying foreign  governments  and textile bodies (17 countries in Asia, Africa, North and South America)  to  pressure  the United States, seeking various ways to impede Chinese trade.