China’s WTO membership means
general privilege treatment within the organization as well as corresponding
obligations, which include significantly bringing down tariff rate, establishing
an integrated pricing pricing system parallel to the international market,
reducing or phasing out import licenses and offering national treatment to
foreign investors. All these will adversely affect the manufacturing and market
patterns currently effective in the country, and make it an urgent matter for
China to undertake industrial restructuring.
The improvement of trading and investment environment following the WTO
membership will attract foreign investments as well as new products and new
technology to China. This will narrow the gap between the textile industries in
China and foreign countries in terms of technology know-how. Foreign investments
will help upgrade product mix and technology structure of the Chinese industry,
speed up the establishment of a market competition mechanism in State-owned
textile firms and accelerate the reform of state-owned enterprises.
The integration of textile raw material prices in the Chinese market with
that of the world market will significantly balance the raw material supply,
help stabilize the production and prices. Tariff reduction will also help reduce
production cost of Chinese textile products and improve their competitiveness in
terms of pricing.
Long Yongtu, vice-minister of Foreign Trade and Economic Co-operation,
stressed that textile quota removal might mean challenges more than
opportunities for many Chinese export textile firms that relied on quotas for
their production, as more competitors would enter the same market.
Generally speaking, quota removal will promote China’s textile exports.
However, a number of firms have long been relying on their privilege in
receiving quotas for export production, which has weakened their creative
ability. There is only three years left for these firms before the export quotas
are completely removed in 2005. By then must survive in a completely open
international market.
A number of textile firms must undertake strategic planning to prepare
for the no-quota market in three years. With no more government protection and
increasing competition, the industry needs to swiftly establish an
internationally competitive structure, sharpen its market competition mechanism,
improve distribution of resources, make use of advanced technologies, managerial
expertise and market operations that are compatible with the world market.
Source
: A.T.A Journal (Dec 2001/ Jan 2002)