China to show export restraint?

A Chinese textile industry lobby group will head to the United States this week (w/c Aug. 11) to meet US retailers and importers in an effort to avoid clashes over China’s increased exports to the USA.

It''s thought that to avoid the implementation of US textile and apparel safeguards, Chinese exporters will try to establish some sort of voluntary restraint that offers political cover, whilst at the same time targeting markets outside the USA.

The idea was hinted at in a report in the China Daily newspaper, "China will not voluntarily impose limits on textile exports as a way to head off possible safeguard measures," said an unnamed official who went on to suggest that businesses could be better off by adapting to the change and finding more buyers outside the United States.

The lobby group on route to the US includes representatives from major textile companies, industrial associations and the government. Their visit is a direct response to a move by a group of US textile associations, which last month asked the US Government to renew limits on a range of Chinese-produced textile products.

The aim of the Chinese delegation is to form a close alliance with US importers and retailers. The notion of voluntary restraint is the carrot in a carrot and stick approach. The stick is the threat of countermeasures if the US administration imposes safeguard limits.