Sudhanshu Ranade

Chennai, March 30

CHINESE Customs data show a 65 per cent increase in value terms for textiles and clothing exports to the US for January over the level achieved in January 2004.

The US is China's biggest market for textiles and clothing. Meanwhile, exports to Germany, China's 4th largest market after Japan and Hong Kong, are reported to have risen by 46 per cent in January , as compared to the same month in 2004.

The rise in value has been accompanied by a drop in prices averaging 25 per cent, with a price drop of 45 per cent in some items. So, the increase in quantity terms has been higher. Textile and garment manufacturers in the US have stepped up their protests at the deluge of imports from China, which they say could cost the US hundreds of thousands of jobs in the manufacturing sector.

Apart from open and implicit subsidies given by the Chinese Government to its producers, they are concerned about the artificially low rate of exchange between the Chinese currency and the dollar.

China has been letting its currency fall apace with the dollar over the past few years, thus giving its exports a large cost advantage vis-a-vis exports to the US from most other countries.

The reported spurt in exports follows the lifting of quota restrictions on textiles and clothing imports into the US and the EU.

Data on gains made by India from the switch over to the free export regime were not immediately available. The news, put out by the China Textile Economy Information Website run by the China Textile Industry Association, has being widely reported in the international media, among others by the AFP. It has also been posted on the China Economic Net (en.ce.cn)

However, a report put out by the Foreign Trade Division of the US Census Bureau puts the rise in textile and apparel imports from China somewhat lower, at about 40 per cent, for January 2005, the first full month after lifting of quotas, as compared to January 2004; from $1.4 billion to $1.9 billion.

(This article was published in the Business Line print edition dated March 31, 2005)
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