Study Cites Chinese Price Advantage

The National Council of Textile Organizations (NCTO) has issued a report designed to demonstrate
that China has a significant price advantage with its textile and apparel exports to the United
States. NCTO took a look at prices for three product categories where import quotas were recently
removed and found that China has a 30-percent price advantage over dozens of countries including
Mexico and the Caribbean nations. The cause, NCTO said, is an array of illegal and unfair trade
practices by China.

NCTO said the 30-percent price gap has enabled China to amass a 60-percent import market
share in the decontrolled product categories, increasing its exports by 700 percent in just two
years. During the same period, the import market share held by China’s competitors declined from 91
percent to 40 percent.

NCTO President Cass Johnson said: “China’s artificially low prices are the result of an array
of illegal and unfair trade practices, which our government continues to be reluctant to attack.
The worst of these is China’s manipulation of its currency, which so distorts the free market that
literally no other country can compete today with China’s exports. He says the administration’s
reluctance to attack the China trade problem calls into question the administrations commitments to
help the domestic industry survive.

May 2004