China : Intense bidding for US export quotas

The bidding by Chinese textile firms for US export quotas in 2006 is likely to be even more contested than the competition for European Union (EU) quotas.

The first online bidding, representing 18 per cent of all quotas, started yesterday and will run until midnight tomorrow.

"The US market is the priority for us, and we are willing to offer higher prices to get more quotas," said Sun Wen, a manager from the Shenzhen-based Hongfushi Textile Co.

Sun's company is one of 28,000 qualified to bid for exports to US, compared to 21,000 firms qualified for the EU bidding.

Sun said many firms have high hopes for the bidding. They started thinking about bidding prices immediately after the Sino-US agreement was signed last month.

On November 8 the two sides agreed to cap exports of 21 categories of Chinese textiles including knitwear, socks and bras for three years starting from next year.

China has set aside 30 per cent of next year's quotas for public bidding. The rest will be allocated to exporters based on their performance in the past year.

Yan Haiping, an export business manager from Youngor, said the company believed bidding was important, although he knew US quotas would be mainly achieved from performance-based allocation.

As one of China's leading exporters of clothes, Youngor believed it would get a good share in the allocation. "We will try our best to get as much as possible," Yan added.

Quotas in each product category will be awarded to the highest bidders. The results will be released on Friday, according to the Ministry of Commerce.

Minimum bid levels range from 0.1 yuan (12 US cents) to 1 yuan per 1,000 kilograms and from 0.2 yuan per dozen to 12 yuan per dozen, depending on the product.

In bidding in September, more than 3,000 textile companies were selected to share 18 per cent of China's textile export quotas to the EU next year.

After companies get a quota, they can sign export contracts with importers in the EU or the United States.

Textile export access to the United States for some restricted categories has been closed for over six months, since the US Government levied safeguard measures on Chinese textiles.

However, despite increasing international trade disputes, China's textile exports are expected to grow 19.21 per cent year-on-year to US$116 billion this year, according to the China National Textile and Apparel Council on Monday. China's textile exports last year totalled US$97.3 billion.

China Daily