China scraps idea of raised export tariffs for textiles

LEONARD NEILL A LIFELINE extended to South African textile operations by the Chinese treasury ministry a month ago has been snapped. Now everything depends on the outcome of talks between US and European Union officials and the Chinese government during the next few weeks. The finance ministry announced last month that it would raise export tariffs on textiles in an effort to avoiding US and EU limits on shipments of certain Chinese goods to those countries. The Chinese move would have benefited the South African industry as well. But China’s Commerce Minister Bo Xilal won’t have any part of it. Export tariffs must be removed in their entirety to protect 19 million Chinese manufacturing jobs, he announced recently. The tariffs, which the finance ministry had decided to impose last month, were five times higher than previous taxes. This gave new hope to the textile industry worldwide that Chinese competition, which had intensified since the World Trade Organisation’s four year old restrictions on China were scrapped in January this year, would be diluted. US and EU officials are now heading for Beijing for talks on the matter – and South Africa’s textile industry will be waiting for the outcome with bated breath.