Vice Minister Gao answers questions on textile trade
Source: MOFCOM Date: 2007-12-06
Q: China has currently become the world biggest textile exporter. Would you please make a briefing on China’s current textile trade?
A: China’s Textile industry is a key traditional industry. At present, China has become the biggest textile exporter in the world. China’s textile export keeps increasing steadily since 2006. It has a large amount of export with steady growth that the export in 2006 amounted to 143.99 billion USD, up by 25.2% y-o-y, accounting for 25% of world textile trade, ranking first. In the first 8 months of 2007, China remains the biggest exporter with stable export growth. The export totaled 108.98 billion USD, up by 19.2%. China slows down export to major market and the market share gradually expands. As optimizing product structure, the price improved steadily.
With the development of China’s textile industry, the market is opened to all regions and brings them opportunity. China’s textile development leads to importing of raw material and textile machines, drives import of apparel, encourages foreign investment as well. According to MOFCOM’s statistics, by the end of 2006, foreign invested textile enterprises totaled 39,929, with 4.31 billion contractual investments. According to China’s Custom, by the end of 2006, export by foreign enterprises reached to 46.99 billion USD, up by 19.1% y-o-y, which accounted for 32.6% of China’s export textile, with 5 percentage points’ increase than that in 2005.
Q：World textile trade system changed in 2005, China’s textile export was menaced by trade protection. But why it develops fast free from impact?
A: Since the integration of world textile trade, growth potential of some China’s textile product released in a short time by abolishing textile quota. Some regions like Europe and USA worried about China’s huge export potential, so that carried out frequently series of trade remedy measures targeting on China’s textile, which not only causing big difficulty on China’s whole textile export, but also effecting trading environment after integration. Under such hard situation, China and Europe took the lead in signing memorandum of understanding on textile trade through arduous negotiation in 2005, which in turn settled down textile trade friction, eased other developing countries’ attention on textile issue, as well as set up a successful model for solving textile problem between China and major textile import country and region. China and USA reached to a consensus and signed MOU later. These MOUs created a stable foreseeable trading environment for enterprises and contributed to the steady transition of world textile trade integration.
Generally speaking, China has benefited from the integration, although MOU restrains export quantity of some textile product.
During the enforcement of MOU, China’s textile export to Europe and USA steadily grows, product structure keeps optimizing and its share and price in export market improves step by step. China’s export to EU amounted to 18.32 billion USD in 2005, and jumped to 22.31 billion USD in 2006, up by 21.8%. China’s market share reached 33% in EU import market, 12 percentage points higher than that in quota time, out of which ten products in the MOU took 23% share, 15 percentage points higher than before. It proves that few textiles’ stable development under MOU provides a steady foreseeable growing environment for China’s whole textile export. It takes account the interest of all sides and brings a favorable effect to China-EU textile’s healthy growth.
Q： China is not the only country benefited from textile trade liberation. Does China’s increasing textile export harm the other country?
A: China is not the only beneficiary from textile trade liberation and China’s textile export growth does not rely on occupying shares of other country. Textile trade liberation benefits world textile trade development and major textile export countries all enjoyed such benefit. According to WTO’s statistics, among top 15 countries and regions of textile export in 2005, 14 has achieved growth (4-21%) in different degree. As textile import grows in developed countries, it own industry develops good after adapting to the integration. EU’s textile export increased 6% in 2006. Major EU members taking textile industry as the supporting industry obtains steady growth. China’s textile industry’s development drives import of fabric, cotton and textile machine. China imported 18.1 billion USD of textile and apparel in 2006, up by 6% y-o-y and imported 4 billion USD of textile machine, up by 52.3%. Importer, wholesaler and retailer, named brand owner and logistics industry are all benefited from China’s textile export growth. Furthermore, fine cheap textile goods are provided to consumers in developed country, especially to low and medium income family.
On the whole, textile trade liberation brings benefit to long term development of textile. All regions enjoy the international division of work. It makes for the proper world resource allocation and brings mutual beneficial and win-win situation to all countries.
Q：According to Sino-EU MOU on Textiles, bilateral textile quantity control keeps effective till the end of 2007. Domestic textile export enterprises are all concern about the measures that if MOFCOM will take to stable the export to EU by that time.
A: I understand that high attention is paid to such issue. According to the MOU signed in July 2005, the bilateral quantity control will be ended by the end of 2007. Starting from this year, with the aim of soliciting opinions, MOFCOM holds series’ of symposiums on the mentioned issue with textile enterprises, experts and scholars and relative departments. Many of them suggest us to take monitoring measures initiatively during the transition period in 2008, so as to maintain stable export to Europe.
On the 22nd session of China-EU economic and trade mixed committee held in Jul 2007, the two parties expressed definitely to scrupulously abide by the MOU, so that bilateral textile trade liberalization could be achieved in time. The two parties should keep dialogue and cooperation in such field and jointly maintain stable trade. In term of the consensus reached on the committee, on September 28, China and EU agree to set up bilateral monitoring system. Based on abolishing all quantity control for export to EU, 8 textile products under MOU catalogue were put into the monitoring system. We shall give export permission to these textile products for one year without quantity control, and take the enterprises operation quality entrance mechanism. The specific quality standard and enterprises coordinated with it will be put forward by textile intermediary institutions.
Textile trade plays the key role in China-EU economic and trade ties. It is significant to maintain the stable trade so as to promote long-term, healthy and sustained development. I hope all textile export enterprises could vigorously respond to the requirement on keeping operation order, regulating export operation, improving export product quality, optimizing export product structure, and jointly keep the stable export in 2008.
Q： What is the challenge confronted by China’s textile export and do you have some suggestions？
A: Today’s economy goes globalization. The quantity is no longer the goal pursued by China’s textile export. We target our developing direction as seizing the opportunity of integration and achieving sustained trade. Though China’s textile has gained certain achievement, to be frankly, some weakness shows under the fast development. The product has low additional value and few China’s brands. The export market is too concentrative to remain in EU, USA and Japan, which accounts for over 40% of China’s textile export. The advantages of labor resource weaken down. We should attach high attention to all these problems and settle down properly.
The goal for China’s textile industry is to realize the transition from the big textile country to the strong one in future. In order to reach the goal, all textile enterprises should strengthen industry structure adjustment, foster their own brand with international influence, vigorously boost internationalized operation, enhance exchange and cooperation with foreign country, and promote quality of human resources.
Textile institutions should fully exert its role as a bridge; vigorously carry out industrial coordination like self-discipline and mutual supervision, which in turn keep the stable and sustained export.
I believe that, under the joint effort takes by enterprises, industrial institutions and government, China’s textile export will see a complete, harmonized and sustained development.
