The weekend trade deal struck in Shanghai between China and the European Union has driven away the clouds that have been hanging over the nation's textile producers for months, industry executives said yesterday.
Sun huaibin, spokesman for the China Textile Industry Council, said the agreement will help ensure "a relatively stable trade environment" for Chinese textile exports to Europe.
The china Chamber of Commerce for the Import and Export of Textiles said the deal sets a good precedent and indicates that any future disputes would be settled through consultations.
The agreement ended the threat that the European Union would reimpose quotas on some categories of Chinese textiles. A trade dispute with Europe, and Washington, has been simmering for months, as Chinese exports to those markets surged following the expiration of global textile quotas on January 1.
Washington has already reinstated quotas on some of Chinese textiles, and Europe was preparing to do so as well.
The agreement, reached early Saturday by Chinese Minister of Commerce Bo Xilai and EU Trade Commissioner Peter Mandelson, forestalled European sanctions.
Under the deal, the EU has agreed to stop investigations on 10 categories of Chinese textile products.
China and the EU also reached consensus on the annual growth of exports to the European market for those 10 product groups through the end of 2007, limiting increases to between 8 percent and 12.5 percent during the period, according to sources in the Chinese Ministry of Commerce.
The products are cotton cloth, T-shirts, pullovers, trousers, blouses, sheets, dresses, bras, tablecloth and flax yarn.
Many chinese textile executives said they felt great relief when they heard an accord had been reached.
Xiao yugui, president of Shanghai Textile (Group) Co Ltd, said the deal will "mitigate the risk of uncertainties for the textile trade."
One of the leading textiles exporters in China, the company shipped out US$2 billion worth of textile products last year, one-fourth of which were sold in Europe.
Qian feng, vice president of the Shanghai-based Huayuan Textiles Group, said the accord is good news for manufacturers who have been living in the shadows of the trade row for months.
Qian said his group had been afraid to take new orders during the period and that most foreign clients were reluctant to place new orders.
Ning jinyuan, general manager of Tianjin Textile Group Import and Export Inc, said the Europeans should also be happy about the results since 90 percent of the profits from China's textile exports go to the EU brand holders, retailers and wholesalers.
The china Chamber of Commerce for the Import and Export of Textiles urged Chinese textile firms to constantly improve their international competitiveness and to avoid future trade disputes through industrial self-discipline.