China Reins in Rapid Growth of Textile, Clothing Export

China's exports of textiles, clothing and accessories in January grew 18.55 percent year-on-year, but the growth rate was much lower than in previous months.

It was 12.3 percentage points lower than the growth rate in November, 12.2 percentage points lower than that in December and 6.7 percentage points lower than that of last year, according to statistics of China's General Administration of Customs.

According to the statistics, China's textile exports reached 4 billion US dollars in January, up 11.6 percent year-on-year. Clothing and accessories exports totaled 8.14 billion US dollars, up 22.3 percent.

Chinese textile and clothing companies enjoyed sustained rapid export growth following its accession to the World Trade Organization (WTO) in 2001.

However, Chinese textile and clothing exports have encountered criticism from Europe, the United States and some African countries.

The US government filed a complaint with the WTO in early February, alleging that China is using export subsidies to help its companies, including those in the clothing sector, to compete in world markets.

The United States, the largest destination of China's textile and clothing exports, could impose a 27.5 percent tariff on China's clothing exports if negotiations and discussions on the issue produce no results.

Chinese industrial insiders say in this market environment, growth of China's textile and clothing exports are likely to subside further.

According to the China Chamber of Commerce for Import and Export of Textiles (CCCIET), China's direct textiles and attire exports to the United States reached 21.9 billion US dollars in 2006, making up 15.24 percent of the United States market, a drop of 1.42 percentage points from the previous year.

The Chinese government began lowering export rebates for textiles last year. The CCCIET and other relevant institutions have established a mechanism to monitor exports of certain commodities to control the growth rate.

China's textile and clothing exports to the United States posted a year-on-year rise of 18.1 percent in 2006, compared with 66.09 percent for the previous year.

Growth of textile and clothing exports to the United States in January was lower than that in previous two months.

China Textile Industry Body Grants Credit Ratings to Members

An industry body has given credit ratings to dozens of Chinese textile enterprises, the first time that textile companies have been given such designations.

Other industries in China already conduct such credit assessments.

The move, by the China Chamber of Commerce for the Import and Export of Textiles, is being described as an effort to support companies in the sector amid difficult global credit conditions.

As a result of the chamber's assessment, 128 textile firms received the top "AAA" rating, while another 14 got "AA" ratings, it was announced on Wednesday at the ongoing Canton Fair here.

Credit ratings were recognized in the global market and would promote industry self-discipline and ensure a fair trading environment, said vice commerce minister Gao Hucheng on Wednesday.

"It is vital to accelerate the establishment of a credit rating system consistent with international practices so as to slash transaction costs and trade risk," Gao said.

The assessments included an analysis of the financial health of a company and its social responsibility.

The textile industry, one of China's largest industries with more than 50,000 companies engaged in foreign trade, faces challenges posed by the stronger yuan, rising labor and material costs and a shrinking export market.

Companies with good ratings will get recommendations from the chambers of commerce or trade associations and enjoy preferential policies from government regulators and financial institutions, Gao said.