The China Threat
The China Threat
The Chinese government has declared textiles and apparel to be a "pillar industry of the nation" and has spent tens of billions of dollars to create an industrial sector that no nation on earth can compete in. This government intervention takes the form of currency undervaluation, handouts from government banks (loan forgiveness), subsidized utility, land and shipping costs, export tax rebates, tax holidays, direct industrial subsidization and many more etc. The intense collaboration between the Chinese government and its textile and apparel sector enables Chinese exporters to underprice its other competitors, including countries like Bangladesh and India which have lower wage rates. According to United Nations data, China exports apparel products worldwide at average prices 58 percent below those of other countries. And in countries where quotas have not been used, China has taken between 60 and 85 percent of the apparel market. See the studies and analyses listed below for more information. NCTO is a part of the Global Alliance for Fair Trade in Textiles (GAFTT), a coalition of 96 trade groups from 52 countries which are committed to ensuring that fair play and free markets govern world trade in textiles and apparel. GAFTT strongly opposes the Chinese government’s effort to monopolize world textile and apparel trade. Up to 30 million jobs around the world, mostly from developing and least developed countries, could be lost if China succeeds. China’s mercantilist and predatory behavior also poses real questions for U.S. policymakers. These include: 1) Is it good for this country to tolerate an enormous economic power such as China that uses its government organs to undermine what we consider free market principles? 2) It is proper to let the Chinese government wreak havoc in our markets and our workers because its government has decided that it will do whatever its takes for its exporters to win the textile and apparel game? 3) Should millions of workers around the globe - and potentially hundreds of thousands in the US - be put out of their jobs because the Chinese government makes it impossible for their companies to thrive and prosper? Should Bangladesh, Indonesia, the Philippines, Turkey, Mexico and Caribbean nations lose billions of dollars in export earnings because their governments believe in free markets and China does not? The long term consequences of the emergence of CHINA Inc - this intense collaboration of government and industry - should trouble anyone that believes in the free market and also that fair competition should be the ultimate arbiter of the marketplace.
TRTEX NEWS
ozgur@trtex.com