Beijing moves against Mandelson's textile import caps
Source: Asia Business Date: 2007-02-05
A Chinese worker inspects spools in a textile company in east China's Anhui province
The Chinese government is fighting back against import caps imposed by Peter Mandelson, the EU Trade Commissioner, with a state-backed fund to boost productivity across the country's textiles industry.
Beijing is to use revenues from textile export tariffs to establish a $170m fund that will develop and promote technical innovation among Chinese textiles exporters.
The money will also be invested in developing more efficient fibres and in a programme to reduce the industry's environmental impact at a time when China is under increasing international pressure to minimise the impact of its breakneck economic growth.
The Chinese state news agency, Xinhua, said the creation of the fund had been confirmed by Zhang Li, an official with the Bureau of Economic Operation, which is run under the auspices of the powerful National Development and Reform Commission in Beijing.
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A number of Chinese and Hong Kong-based footwear manufacturers are understood to be taking legal action against the European Union over its imposition of the tariffs last October. They were introduced amid concerted pressure from EU members such as Italy and Portugal, who complained that the flood of imports from Asia was undermining the viability of their textiles industries.
The EU anti-dumping duties, which were imposed for two years at levels of 16.5pc for China and 10pc for Vietnam, another fast-growing textiles exporter, attracted complaints from other EU members that fair competition in the market was being prevented.
The textiles industry has become an increasingly important ingredient in China's economic surge, now accounting for around 15pc of the country's total exports. Chinese textile exports are understood to have risen by more than 25pc last year, according to Xinhua.
However, the industry's growth has brought with it serious environmental consequences, with frequent reports in China of pollutants used by textiles factories contaminating local water supplies.
