Updated: 2005-07-21
Chinese textile manufacturers started to export to the European Union under provisional quota allocation measures yesterday.  According to management measures published by China's Ministry of Commerce (MOFCOM), quotas in 10 categories of Chinese textile products now apply to around 5,700 enterprises across China.

The Shanghai municipal authority, Zhejiang, Jiangsu, Shangdong and Guangdong provinces, which are traditionally more advanced in the textile industry, got more than 85 per cent of the total.

The quantity granted to each company was calculated according to their shipments in the past 12 months. It aims to encourage them to improve their products and to develop better ones, experts said.

The newly published measures had not been implemented until yesterday because it took MOFCOM a lot of time to co-ordinate with customs and other agencies.

As all textile exporters cashed in on the "vacuum period" between June 11 and June 20, when they could export to the EU with no restrictions, the quotas left for the allocation were not large.

For example, statistics from the EU show that Chinese enterprises had used up some 88.12 per cent of the quotas for sweaters by July 19.

The clearance rates of pants and woman's shirts also amounted to 40.68 and 37.23 per cent respectively.

Therefore, the quantity given to some enterprises was quite small.

A number of companies merely got quotas of several pieces or less than 10 of kilograms in each category, showed statistics from the website of MOFCOM. Many firms were unhappy.

"We are not satisfied with the allocation," said Jiang Yi, a manager at the Beijing-based Smart Garment Co Ltd.

The company have to go along with quotas for around 7,000 pairs of trousers. It is the company's only product under restriction.

Jiang said the quantity would not even meet the demand of one order, saying that usually an order asked for at least 20,000 pairs.

"Fortunately, we have completed most of our orders," he said. "But we still have some 12,000 pieces left in hand."

This means Smart will have to ask its customers to cancel their orders or it will have to export through an agent with a quota allocation.

However, Jiang said, neither method would help them win more allocation for next year. Jiang's company was not the only one to complain about the small number; some quotas were even less.

A source close to MOFCOM admitted the method of allocation resulted in great waste although the government hoped to allocate quotas fairly.

Enterprises expect that some changes can be made to the provisional measures.

Some have suggested the government adopt a bidding method in allocating quotas for next year.