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Influence of China's entry into WTO on China's textile and apparel

2016.02.29   15:41

China is the largest textile producer and exporter in the world. At present, China's textile fiber processing volume has exceeded 10 million tons, the per capita consumption of fiber increased to 5.5 kg, 5 years is expected to reach 6.6 kg. In the year of 1998, the output of chemical fiber( which accounted for 20% of the world's total output)was 5.10millon tons,the capacity is  about 20billion pieces of clothing production, accounting for 13% of the world's total exports of textiles and garments. The export structure has changed from the primary products such as gauze to clothing and so on. The proportion of the exports increased from 20% in the year 1978 to 70% in the year of 1998.

The international status of China's textile and garment industry

Textile and garment industry is a traditional industry with a long history in the world, the world textile and apparel sales in the tourism industry and the information industry, ranked third. World textile trade at an average annual growth rate, basically maintained at 6%-7%, the current global textile and apparel transactions amounted to about $400 billion. According to the world bank and the International Monetary Fund forecast that the next 10 years, the world economic growth rate is expected to reach 3%-3.5%, the world's annual growth rate of textiles and clothing will reach 6%-8%. International trade growth is bound to provide more space for China to expand the export of textiles.

China now accounts for 1/8 of the global textile and apparel trade in total, about $50 billion, about accounted for about global market share of 13%-15%, while accounting for about 30% of China's total export commodity, visible in the international market status of Chinese textiles is pivotal.

Effect of WTO on textile and garment

China's accession to the WTO, the textile and garment trade in general should be the advantages outweigh the disadvantages. From the fabric point of view, the Chinese garment industry, but the fabric of the enterprise is bad. From the perspective of clothing imports, China's top grade garment manufacturers will form a greater impact.

China's current textile industry is still a traditional labor-intensive industry, its core competitive advantage lies in the low cost of labor. With China's accession to the WTO process accelerate, China will gradually establish a market, with the international market integration, textiles will continue to bear the heavier tariff reduction obligations, the textile industry will also face the increasingly fierce international competition. So, on the one hand, the government will not be able to continue through high tariffs and other non-tariff barriers to prevent the entrance of foreign products, domestic manufacturers has been the impact is self-evident, this is a negative impact; on the other hand, China's textile and apparel exports to foreign markets will no longer have quotas and limits of high tariffs, the domestic manufacturers is conducive to expanding exports.

Accession to the WTO will have a profound impact on the development of China's foreign trade, which will change the environment of China's foreign trade in the year 2000 world economic growth rate will be increased to 3.5%, in developed countries the growth rate of 2.7%, developing countries is expected to pick up to 4.8%; in the year of 2000,the world GDP will increase to about 3.5%, world trade will rebound sharply, and which increase is expected to reach 6%-7%; future common to see global economic and trade growth add more confidence for the development of China's foreign trade, especially of, accounting for one fourth of China's total trade of export commodities trade in textiles and clothing, has an important significance.

On the other hand, for the textile and garment export market, after the accession to the WTO, with the all-round opening to the outside world in the field of trade and investment, China's economy will be greater degree into global competition system, which will textile industry to better use of international and domestic resources, and effectively improve the textile and garment exports, the market environment, and vigorously expand domestic and foreign markets has brought new opportunities, but also for the export of Chinese textiles and widen the space of growth. In addition, China can get the preferential treatment in time through the multilateral negotiations, and the use of the WTO to solve the textile trade disputes with the countries concerned. More importantly, in the face of North America, the European Union's regional protectionism, can make full use of the status of the member states of the WTO, for China's legitimate interests, the use of various rules to protect the domestic textile industry.

Is conducive to international and domestic textile raw materials market in line with the overall. In 1997 the international market cotton price and market price amounted to 10%-20%, after the accession to the WTO and from the beginning of 1998 cotton system reform, will realize market allocation of resources. Balance room for cotton resources increase, the cotton industry international competitiveness will be increased accordingly. Reduce chemical fiber products before the tariff, the abolition of non tariff measures, is conducive to improving the competitiveness of chemical products, and expand the export of chemical fiber products.

After China's entry into WTO, China's textile exports will depend on the competitiveness of Chinese products and enterprises. From the possibility of view, China's textile or price advantage, after joining WTO, China's textiles can continue to obtain greater development. Has authoritative department estimates, after the expiration of the textile and garment agreement, China's textile and apparel market share will increase by 15%.

In the long term, after joining the WTO, due to the huge pressure outside, forcing the domestic textile manufacturers to accelerate technological progress, improve product quality, change the business mechanism, adjust the industrial structure, in order to enhance the competition. This will promote the expansion of China's textile exports, the adjustment and upgrading of the industry, to optimize the overall industrial structure of the entire textile industry, improve the overall competitiveness.

By Emily

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