An automatic license system that will improve the statistical analysis and monitoring of China's textile exports went into effect on Tuesday. The system will help to release timely warnings to traders.

When the system detects a surge in one category and issues an alarm, the category will be identified as a sensitive product and its minimum price will be announced, said Wang Shenyang, chairman of the China Chamber of Commerce for the Import & Export of Textiles (CCCT).

The license system is just one of the measures specified by a textile industry committee to ensure fair competition in the global textile trade, according to Wang.

Proposed measures include a minimum price for sensitive exports, with companies exporting below the set price being placed on a customs blacklist for increased supervision. Some companies could even lose the right to trade, said Wang.

Apart from the CCCT, whose 6,000 member companies account for 70 percent of China's total textile exports, the industry committee includes representation from the China National Textile and Apparel Council (CNTAC), the China Association of Enterprises with Foreign Investment (CAEFI), the Hong Kong General Chamber of Textiles, the Textile Council of Hong Kong and officials from the Ministry of Commerce. Together, they represent virtually all textile exporters from both the mainland and Hong Kong.

The committee has held two meetings so far this year, on January 31 and February 21.

The government and the textile industry are both working to ease the concerns of foreign counterparts who fear Chinese textiles will swamp the world market in the quota-free era. All textile quotas among World Trade Organization members were removed on January 1 according to an agreement signed a decade ago.

Some foreign textile companies, not yet ready for the quota removal, have pushed their governments to impose safeguards against Chinese textiles. To address these concerns, especially from developing countries, China began to collect export duties on some textiles from January 1 this year.

Nevertheless, in the first two months of this year China's textile exports continued to rise, although strong growth in shipments to the US and EU was expected because of the lifting of the quotas, said Wang.

For example, trouser exports to the US jumped eightfold from the same period in the preceding year, while the average price dropped 30 percent. China believes it was treated unfairly in the quota period, with the US limiting China's exports to 5.5 million compared with 7.8 million for Bangladesh and 10.2 million for Vietnam.

"The export increase will abate after an initial surge," said Wang.

China's textile and clothing exports totaled US$111.9 billion last year, according to Wang. By the end of last year, China may have secured 23 percent of the world textile market.

(China Daily March 2, 2005)