China: Beijing may raise textile tariffs to curb exports(export tariff?)

Financial Times ^ | 04/15/05 | Alexandra Harney,Geoff Dyer,Alan Beattie

[TigerLikesRooster]

Beijing may raise textile tariffs to curb exports

By Alexandra Harney in Hong Kong, Geoff Dyer in Shanghai, and,Alan Beattie in London
Published: April 15 2005 03:00 | Last updated: April 15 2005 03:00

China is considering raising export tariffs on certain categories of textiles in the hope of slowing a rapid growth in shipments to the US and Europe since the beginning of the year.

Gao Yong, deputy director of the China Textile Industry Association, said the idea was to raise the tariff on products that had sharply increased in export volume over the past two months, while maintaining or lowering the tariff on other items. A decision had not yet been taken on the extent of the rise, but Mr Gao said he expected one within the next month.

Last December, China announced an export tariff worth Rmb0.2-Rmb0.3 per item or Rmb0.5 per kilogramme to allay concerns in the US and Europe that Chinese textile exports might surge following the expiry of a decades-old global quota system this year.

But the tariff appears to have had little effect. This month the US Commerce Department released preliminary data showing that imports of cotton knit shirts and blouses from China rose 1,250 per cent in the first quarter, while cotton trousers surged 1,500 per cent over the same period.

It is investigating whether Chinese imports are disrupting the US market, a step expected to lead to the imposition of safeguards on certain Chinese-made garments. The European Commission is expected to decide on April 25 whether to limit textile imports from China.

Garment industry executives in Hong Kong and mainland China said they had learned in the past few days that Beijing might raise export tariffs. They had heard the tariff could rise as high as Rmb2-Rmb4 per piece. They said Chinese factories were likely to suffer if a higher tariff were imposed, because prices for garment orders were fixed several months before shipment.

If a high tariff were imposed, "all manufacturers will go up and bang on Beijing's door and say this is ridiculous", said Willy Lin, vice-chairman of the Textile Council of Hong Kong.

Liu Qiong, general manager of Shanghai Hejing Textile Export Company, said that, as a result of fears that the US government would curb Chinese textile imports, the group's US customers were afraid of signing orders with Chinese concerns.

Competition for export orders was intense. "Everybody strives for export orders while ignoring if the business is profitable or not. The competition here is chaotic."

Analysis of data by trade economists reveals that the rise in Chinese textile and clothing exports to the US in the first two months of this year has mainly come at the expense of other exporters.

In January and February, US textile imports rose 14 per cent, and clothing imports 15 per cent, from a year earlier.

But that compared with total imports rising by 17 per cent. While US textile imports from China increased by 40 per cent and garment imports by 70 per cent, the increase in imports from elsewhere slowed sharply to compensate.

[TigerLikesRooster]

It seems that China is worried.

[TigerLikesRooster]

Ping!

[wk4bush2004]

China needs to learn to play by the rules and let the yuan float.

The US should impose severe quotas on Chinese imports and keep them until China lets the yuan float.

[kellynla]

I still have my Converse & New Balance sneakers, Levis jeans & Polo shirts that were made here in the good ol' USA that I wear and still in good condition.

[TigerLikesRooster]

Re #3

I know that Congress Republicans are readying various spanking packages just in case China does not play the ball.

[libs_kma]

"I know that Congress Republicans are readying various spanking packages just in case China does not play the ball."

I hope they bring out those spanking packages pretty soon. It's a problem all right, but China still needs the US more than the US needs a $7.49 golf shirt thats thinner than tissue paper.

[Paul Ross]

You know, they aren't really tariffs when they are assessed against exports. They are then purely-and-simply a sales tax.

ANyways, their wage advantage is proving too huge. I guess we should go ahead and tariff them then.

Great, I say.

Maybe this will teach the loser-tarians who have invested their fortunes into trashing the U.S.'s industry.

China is not about "free trade" or "economic efficiency" or "liberty". It has always been about politics...and power.

I hope the China Export lobby...loses their shirt.