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Chinese count the costs
By Sam Ng
HONG KONG - While officials are
reluctant to admit it, China's textile industry has been
hard hit by the on-going SARS (severe acute respiratory
syndrome) crisis. Since April, many countries have cut
back on imports from China, with SARS in effect becoming
a new trade barrier to China's textile products.
However, the domestic media tell a different
story, saying that China's total trading amount in
textiles and apparel products in the first four months
of this year actually increased 24.6 percent in
comparison to the same period last year and that the
industry continues its fast growth. However, according
to industry sources, the first quarter's data do not
illustrate real losses because there's a time line that
postpones the effect to coming quarters. Figures for the
second and third quarters, therefore, could tell a
different tale.
Guangdong province is China's
biggest textile and apparel products exporter. In 2002,
these amounted to US$10.06 billion, a net increase of
$1.38 billion and 24.45 percent of the national total.
China is the world's largest exporter of textiles with a
32 percent world share. Guangdong textile exports in the
same year grew by 19.8 percent to $3.24 billion. The
province's trade surplus in apparel and textile products
is $5.62 billion, which is 70.8 percent of the
provincial total.
But now the province's
international orders have plummeted by as much as 20
percent, according to preliminary estimates. Many
companies have no orders at all, and as many as a half
of them have suspended production.
SARS hit
Guangdong's textile industry suddenly and heavily. With
exports hindered, companies began to focus on domestic
markets in a bid to survive, increasing the number of
their agents and directly dispatching salesmen to
contact buyers. But this scheme fell victim to SARS, as
before the World Health Organization (WHO) lifted its
travel warning on Guangdong, activities between
Guangdong and outside provinces were almost frozen.
Drivers from Guangdong carrying products to other
provinces had to wait 14 days in quarantine at the
border, while drivers returning from Guangdong also had
to go into quarantine for two weeks.
Although
the WHO has clearly announced that there's no positive
connection between SARS transmission and product
imports, and that the disease should not be used as an
excuse for setting trade barriers, the United States has
cut off its relationship with Chinese producers in
famous brand apparel processing since the end of April,
and some textiles imported from China have been sealed
off in foreign ports for a month. Some European
countries have even made it clear that they will not
consider importing any kind of textile products from
China in the foreseeable future. For those already sent,
some countries just refuse to accept them, return the
goods or charge high compulsory quarantine fees.
Spanish authorities have gone a step further to
demand that all textile imports from SARS-affected areas
"mainland China, Hong Kong, Taiwan, Vietnam, Singapore
and Canada" submit official certificate of disinfection
and insect-killing issued by the health department of
the country or territory of origin". Goods without
certificates will simply be destroyed. Textile exports
to the Middle East, meanwhile, are subject to a $3,000
charge per container, which wipes out China's price
competitiveness.
(Copyright 2003 Asia Times
Online Co, Ltd. All rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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