Monday, May 30, 2005

China to Scrap Textile Export Taxes

China to Scrap Textile Export Taxes: "Commerce Minister Bo Xilai said Washington and Brussels had failed to prove their domestic markets had been disrupted by an increase in Chinese exports since a 40-year-old system of quotas on developing countries' exports of textiles expired on Jan 1.

Bo said China was willing to hold talks, but he was scathing about the "double standards" of rich countries that flew the flag of free trade but rushed to throw up barriers when poor nations started to exploit their comparative advantage of cheap labor.

"The EU and the United States should spend more time on the development of high technology -- Airbus or Boeing airplanes, and advanced modern machinery -- rather than spending time quarrelling with us on issues like shirts, socks and trousers."

Bo was speaking hours after China said it would scrap export tariffs on 81 textile products, making good on its threat to roll back the taxes if the West imposed curbs on its goods.

The tit-for-tat move followed a formal request on Friday by the European Union for talks with China over surging shipments of T-shirts and flax yarn, which have fanned fears of widescale bankruptcies and lay-offs in the 25-member bloc.

...The row over textiles has added fuel to a debate over the value of the yuan, which has been pegged near 8.3 per dollar for a decade. Law-makers and manufacturers in the United States, as well as many independent economists, believe the peg undervalues the currency, giving China's exporters an unfair advantage.

Bo gave no clues as to Beijing's thinking on a shift in the currency, saying only that when the government decides it will consider China's needs and the stability of the global economy. "

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