Overseas Trend Of China'S Spun Apparel Export

In 2005, the mainland of China agreed with the United States and the European Union to set up a quota of protection for textiles and clothing exported from the mainland to the two markets.

The agreement with the United States covers 34 categories (21 products) and will be terminated in December 31, 2008.

The EU agreement covers 10 categories of products, which ended at the end of 2007.

To sum up, the quota restrictions imposed by the US on imported textiles and clothing from the mainland of China basically have little effect on the protection of local manufacturers.

Us importers have shifted some restricted products orders to other suppliers, especially in Asia, showing that the quota restrictions do not bring any benefits.

After the quota is terminated, the regulatory trend will continue to affect the US market outlook after 2008.

If imports surge, the US government is under pressure from the domestic industry to adopt trade remedy measures to reduce the impact of the surge in imports.

It is possible for the United States to take expedient measures to implement the current anti-dumping supervision plan against Vietnam as well as to the mainland of China, and will undertake to initiate anti-dumping actions on behalf of the US textile companies if there is evidence that the mainland's products suffer from damaging dumping.

Generally speaking, the position of the mainland China as the preferred supplier should be able to withstand the increasingly severe challenges of the production environment and further consolidate and enhance. Nevertheless, American importers will continue to purchase products from different locations.

In 2008 and beyond, the number of procurement sites for us importers may be further reduced, but we believe that a certain number will still be maintained, especially in Asia.

EU's textile guarantee quotas expired at the end of 2007.

After that, the EU has established bilateral mechanisms with the mainland of China to monitor the import of textiles and clothing in the mainland.

This dual monitoring mechanism will operate for 1 years, involving 8 categories of the original 10 categories of restrictions, so as to maintain bilateral supervision of trade.

After the expiration of the EU's quota and the introduction of a monitoring mechanism, the mainland's export of textiles and clothing to the EU has increased ideally this year.

On the face of it, this increase has not yet caused an excessive impact on the European Union's production, because the increase in the number of member states in the central, Eastern and southern parts of the EU has helped to ease the decline in the EU's developed member countries.

Nevertheless, if China's export growth momentum continues to be even stronger, the EU may take various defensive measures, such as anti-dumping actions, to restrict imports from the mainland.

It is expected that in 2008 and beyond, the EU's importers of textiles and clothing will continue to pfer orders steadily to Asian suppliers.

Besides the mainland of China, Vietnam and other countries will also do well.

Turkey and other regional suppliers are expected to compete with the mainland and other suppliers in Asia in the coming years by using duty-free access, being close to the EU market, and having links with EU textile producers in production.

At the same time, Hongkong will gradually reduce its outward processing arrangements with the mainland.

In the absence of a quota restricted trading environment, the outward processing arrangements between Hongkong and the mainland, which are currently established in the European and American markets, will not be reused. However, if the EU and the us take trade remedy measures to the mainland of China, this cooperative production mode will be reactivated.

In view of the uncertainty in the post quota period, Hongkong exporters should pay close attention to the trend of overseas regulation and take appropriate action.

The northward shift of production activities by Hongkong textile and garment manufacturers will certainly help to enhance their competitive edge and profitability. However, we should also consider diversifying production bases instead of concentrating production activities only in the mainland.

In addition, Hong Kong businessmen should further strengthen their relations with overseas buyers, expand to advanced and high value-added businesses, especially focus on design and brand creation, and adopt innovative technology to promote high value-added production business.

In view of the high protectionism and fierce competition in Europe and the United States, Hongkong exporters should seek diversified development and look for potential new markets around the world, especially the huge domestic market in the mainland.