Chinese textile manufacturers started to export to the EU under provisional quota allocation measures yesterday.

According to management measures published by the Ministry of Commerce (MOFCOM), quotas in 10 categories of textile products now apply to around 5,700 enterprises across China.

Shanghai Municipality and the provinces of Zhejiang, Jiangsu, Shangdong and Guangdong, more advanced in the textile industry, were allocated more than 85 percent of the total.

The quantity granted to each company was calculated according to their shipments in the past 12 months and aims to encourage them to improve the quality of their products, said experts.

The measures had not been implemented until yesterday because it took MOFCOM a lot of time to coordinate with customs and other agencies.

As textile exporters took advantage of the "vacuum period" between June 11 and June 20, when they could export to the EU with no restrictions, the quotas left for the allocation were not large.

For example, according to EU figures, Chinese enterprises had used up 88.1 percent of quotas for sweaters by July 19, and 40.7 and 37.2 percent of those for pants and blouses respectively.

A number of companies merely got quotas of several pieces or less than 10 kilograms in each category, according to MOFCOM's website.

"We are not satisfied with the allocation," said Jiang Yi, manager at Beijing-based Smart Garment Co Ltd, in response to their quota allocation of 7,000 pairs of trousers on July 8.

Jiang said this would not meet the demand of one order, saying they usually called for at least 20,000 pairs. "Fortunately, we have completed most of our orders," he said. "But we still have some 12,000 pieces left in hand."

This means Smart will have to ask its customers to cancel their orders or it will have to export through an agent with a quota allocation, but Jiang said neither method would help them win a greater allocation for next year.

A source close to MOFCOM admitted the method of allocation resulted in great waste although the government hoped to allocate quotas fairly.

A number of enterprises said they expected some changes would be made to the provisional measures, and some have suggested the government adopt a bidding method in allocating quotas for next year.

(China Daily July 21, 2005)