Rising Cost Of Production Factor And Dilution Of Foreign Trade Profits

China is a big country in textile production and export, textile and clothing.

In the past ten years, the overall trade situation of textile and apparel in Central Europe has been stable.

In the three years before the accession to the WTO, China's exports to the European Union (15 countries) showed steady growth in exports of textiles and clothing. In 1999, it was 4 billion 152 million US dollars, in 2000 it was US $4 billion 991 million, and in 2001 it was US $5 billion 187 million. In 2002, one year after entering WTO, the growth rate was very obvious, rising to 6 billion 417 million US dollars. At that time, the EU ranked fourth in the main market of textile exports.

Since 2007, the European Union has become the largest economy of textiles and clothing exports in China.

In 2010, China exported 45 billion 813 million US dollars to the European Union (27 countries), up 23.59% from the same period last year, accounting for 21.61% of the total export volume of textiles and clothing in China.

If the number of years before joining the WTO is still stable, the textile trade between China and Europe has entered a "very special period" since 2004.

In May 1, 2004, the EU Eastward Expansion became a popular word. The accession of Poland and Czech increased the EU from 15 countries to 25 countries.

In 2007, it also absorbed Romania and Bulgaria to join as an economy with 27 member states.

With the expansion of Member States, its market capacity has also expanded.

However, most of the countries joining the European Union were developing countries, with lower labor costs and more abundant resources. The textile industry is one of the main industries in these countries.

The eastern enlargement of the EU has produced many trade effects, such as trade creation and trade diversion, and also brought about a continuous adjustment of the textile industry's economic and trade pattern around the EU market.

Over the next few years, the issue of quotas has become the "eventful autumn" of textile trade between China and Europe. Various trade frictions and disputes between China and the EU have aroused frequent attention from China and the EU in two aspects.

In the face of disputes, the EU did not directly resort to WTO, but tended to solve problems through dialogue and cooperation.

This is also an important prerequisite for the steady growth of textile trade between China and Europe.

For the quota issue, the two sides finally reached a consensus: since January 1, 2008, the EU has fully opened up the market for Chinese textiles and clothing.

After 3 years of efforts, China and the EU textile industry has entered the era of quotas.

But "quota free" does not mean that the trade between China and Europe has become more and more smooth. Since 2008, the EU has been resisting "made in China" in the form of anti-dumping and technical barriers to trade.

Not long ago, the European Parliament voted to adopt the European Union's textile origin identification agreement second reader, the agreement as a mandatory legislation for the export of European textiles set up a new trade barrier.

In the future, the EU is still the most important overseas market for China's textiles and clothing. Under the economic situation of the rising cost of domestic production factors and the dilution of foreign trade profits, it has also put forward a severe test of China's foreign trade in textiles and clothing. We need to think more deeply about how to do well in the European Union market.

Playback in key years - 2005

The ten years of trade between China and the EU can not be bypassed in any case in 2005. Quotas have been the key words of textile trade between China and Europe. The quota was abolished in this year, but it also stirred up waves of thousands of waves, causing the waves of textiles between China and Europe. Next, with a few key words and points, let's look back at the key nodes -- the textile trade between China and Europe in 2005.

Quota cancellation

The agreement on textiles and clothing (ATC) stipulates that in the ten years since 1995, the quota restrictions on textiles and clothing have been abolished in four stages among WTO members to achieve free trade.

January 1, 2005 is the final stage, and all quota restrictions have been abolished.

The "quota" system, which dominated the world textile and clothing trade for 40 years, ended. Although it is a good opportunity to expand the market for the textile industry in developing countries, the developed countries such as Europe and the United States will not give up the protection of the local textile industry lightly, and the Chinese textile will continue to face many barriers in the EU market.

Last minute agreement

Referring to the textile and garment trade between China and the European Union, many people in the industry will frequently mention the "war without smoke" in 2005.

The abolition of quotas at the beginning of this year should be a good news for China EU textile and garment trade, though the trade barriers after the quota have long been expected, and this time the EU's "bombardment" of Chinese textiles is somewhat beyond the imagination of China.

Due to the lifting of quotas, the capacity that has been constrained for many years has been reasonably released through more convenient channels.

Looking back at the export data from 1 to February in 2005, the monthly export growth of textile and clothing showed a sharp increase of 30% in contrast with that in 2004, which caused panic in the EU industry and strongly urged the European Commission to impose restrictions on some Chinese textiles.

Since February 23, 2005, the EU has revealed that China may adopt a special safeguard mechanism for China's textile exports. Some special investigations on Chinese textiles have been launched, and trade disputes between China and Europe have been upgraded.

In order to prevent further deterioration of the frictions, Mandelson, European Trade Commissioner, flew to Shanghai in June 10th, and Bo Xilai, then China's minister of Commerce, held consultations on the matter.

At 23:59 PM that evening, the EU talked about 10 hours before the arrival of the 15 day "special safeguard period" for the textile trade in China. Bo Xilai and Mandelson jointly announced that the two sides had reached a "last minute agreement" on textile trade.

According to the two sides' agreement, China will ensure a smooth pition in textile exports to Europe by the end of 2007; the EU has promised to no longer restrict Chinese textiles by 2008, but will only impose restrictions on the growth of 10 kinds of Chinese textiles by the end of 2007.

European port of card pass

On the day of June 11, 2005, China and Europe also signed the memorandum of understanding between China and the European Commission on China's partial export of European textiles, but there was more than a month of "management gap" between the June 11th agreement and the implementation of the regulation in July 20th.

As a result of the volume regulation implemented by the two traders, the export of three categories of products such as pullovers, trousers and women's shirts has led to a surge in exports of these three commodities to Europe.

At the same time, only more than 70 days after the entry into force of the Sino EU textile agreement, the quotas covering the ten categories of textiles covered by the agreement were basically exhausted in August. A large number of Chinese textiles and garments were left behind by customs in Europe.

Once such a large-scale "card pass" occurs, it means that a large number of retail retailers in Europe can not sell.

The matter quickly attracted the attention of China and the European Union. Bo Xilai and Mandelson met again. After two days and a night of consultations, an agreement was reached: 80 million pieces of Chinese textiles squeezed in the European ports were adopted to take the responsibility of "55 parts". EU's new quota increased by 40 million, and the remaining 40 million pieces will be misappropriated by the Chinese quota next year and the adjustment of different categories of product quotas.