China announced on May 20 it would raise export tariffs on 74 sorts of textile products, with a 400-percent hike for most of the products, beginning June 1, 2005.

    That means the export tariffs on each piece of concerned textile or clothing product would increase from 0.2 yuan (2.4 US cents) to 1 yuan (12 US cents). But the new export tariffs for women's cotton overcoat and mantle would be 4 yuan (48 US cents), compared with the current 0.3 yuan (3.6 US cents), according to the Customs Tariff Commission of the State Council, China's cabinet.

    The tariff hike was announced in the wake of a United States decision this week to re-impose restrictions on seven kinds of China textile and clothing imports. The European Union is also pressuring China to take more strict measures to curb textile exports to the European market.

    Most of the textile products to be affected by this tariff increase are exported to the United States and the European Union,which include the seven kinds of products restricted by the UnitedStates, said Vice President Gao Yong of the China National Textileand Apparel Council.

    He said the Chinese government has made the decision "independently and voluntarily" in a bid to curb the rapid development of textile export, after listening to advices from Chinese textile companies and chambers of commerce.

    Gao said his council had suggested the government earlier that the tariff rate be raised by a modest margin, and the tariff hike not affect too many products.

    According to the China Textile Industry Council, Chinese textile companies would have to "make sacrifice" as a result of the export tariff hike.

    Sun Huaibin, spokesman for the Council, told Xinhua that the Council understood the decision of the government, as "it is for the purpose of helping establish a new world textile trade order and ease the trade friction that the government has made the concession."

    The American Chamber of Commerce in China welcomed China's drastic hike of the export tariffs, saying "This voluntary step demonstrates that China is adopting a constructive approach and issensitive to the very real hardships which the removal of quotas has brought for some American workers."

    "We are encouraged by this move that the United States and China may be able to resolve other trade differences with a similar sense of fairness and moderation," Charlie Martin, president of the chamber, said in an exclusive interview with Xinhua.

    However, Sun, the China Textile Industry Council spokesman, noted that the tariff hike would surely result in an increase of cost and decrease of profits for domestic companies. Some companies might sustain losses and textile workers might lose their jobs.

    "This is what we don't want to see," said Sun.

    Zhang Peisen, head of a policy research group under the State Administration of Taxation, said the government move, though painful for Chinese manufacturers and workers, could also help thecountry's textile sector readjust their export strategies and introduce more advanced technology to increase the added value of their products.

    But Zhang stressed that China's decision on the tariff hike "doesn't mean that the US and EU restrictions are justified."

    "I still doubt the figures released by the United States on Chinese textile imports during the past four months, and I think their moves (of restriction) are simply not fair because they justgo against the principle of free competition," he said.

    In Hangzhou, capital of east China's coastal province of Zhejiang, Xu Zhongping, marketing manager of Hangzhou Qiuyinong Clothing Co. Ltd., said the domestic industry must face up to reality and try to offset the negative impact of the tariff hike by improving products quality and increase added-value of products.

    "I think the tariff adjustment will affect low-end manufacturers most. As for my company, we produce high-end garments and most of our exports are highly priced, so we considerthe increased cost in export due to the tariff hike basically tolerable," said Xu, whose company specializes in making men's suits, boy clothing and jerseys.

    Zhao Yumin, an expert with China Academy of International Tradeand Economic Cooperation under the Ministry of Commerce, pointed out that the current tariffs are levied according to the "quantityof exports", rather than the "value of exports", which gives a clear signal that the government encourages companies to export more high-value-added products.