Shanghai Daily news

Textile manufacturers and exporters in Shanghai said they were surprised to learn of a US decision to impose quota restrictions on three varieties of Chinese textile products.

However, they say the damage will be limited and they remain optimistic that there's room for further negotiations between the two countries.

"I expect about 10 to 15 percent of our trade deals will be affected," said Ye Changgen, an official with Shanghai Silk Group Co Ltd, which sold US$240 million worth of textile products to the United States in the first 10 months of this year. "Robes and brassieres are our main products," said the silk firm official.

"But it will not be a fatal blow and the percentage lost is still bearable," he added.

As no timetable for the quotas has been set, it's hard to estimate losses for a specific company, he added.

"I think there's room for further discussion between the governments of both countries," said Mao Jin with Shanghai Sales Clothing (Wei Xin) Co Ltd, a Hong Kong-invested trade concern, which buys clothes for American companies such as Gap Inc and Ann Talyor Stores.

"The US government may be only beating their drums so the US textile manufacturers and exporters can support George Bush during next year's general election," Mao said.

Gao Yongfu, associate president of the Shanghai WTO Affairs Consultation Center, said, "The issue is politicized with the general election and the United States has pushed trade protectionism in recent years on the steel and textile sectors among others."

"Such trade disputes will arise more frequently in the coming years. Domestic exporters should be careful to protect themselves," Gao said.

Shanghai used to be the country's most important textile manufacturing center but is gradually losing that status to neighboring Zhejiang and Jiangsu provinces. In recent years, Shanghai has sold about US$1.32 billion worth of textile products to overseas markets annually.

The labor-intensive textile industry kept shrinking as the city government shifted its focus to the development of high-tech sectors such as automobiles and computers.

Only exporters targeting high-end markets fare well nowadays, with the rest earning a thin profit or even posting losses.

State-owned trading companies bid farewell to their heyday in the early 1990s as the market opened wider to allow active private and foreign-invested companies during the last decade in the export business.