Quota-Free Imports From China Reach Record Levels

According to a report released last month by the US Department of Commerce (DOC), US imports of
quota-free Chinese apparel and home furnishing products have reached record levels. Apparel imports
from China comprised 70 percent of the 2004 US apparel market, and imports of finished textile
products from China represented 61 percent of that market. Globally, China exported 513 million
square meters, or 55 percent of quota-free apparel. US imports from other countries declined by 91
million square meters in these categories.

Europe also is feeling the effects of a quota-free market, according to Cass Johnson, president,
National Council of Textile Organizations (NCTO), Washington. He said European imports of Chinese
apparel were two to four times higher in January 2005 than previously.

“[T]his sector is now in critical danger,” Johnson said. “The US government must move now to get
the safeguard process started and give the industry the relief it was promised as part of the China
accession agreement.”

Chinese finished product prices in these quota-free areas have fallen sharply, with the average
price going from $3.79 per square meter in 2001 to $1.21 per square meter in 2004 – a 68-percent
decrease overall, further broken down to a drop of 55 percent for apparel and 83 percent for
finished textile products, according to the DOC.

A recent NCTO analysis shows Chinese apparel prices averaged 58 percent below those from other
countries in the global market including India, Pakistan and Bangladesh; and 76 percent below US

March 1, 2005