1、 Executive summary 1 Analysis results 3 Chinese price changes 4 Chinese dominance 4 Peril for Mexico, CBI and Africa 6 2005 How much will China take? 7 Impact on U.S. textile and apparel sector 10 Impact on other countries 11 Why China is so dominant 12 What can be done? 13 C o n c l u s i o n 1 5 A
2、ppendices 17 The American Textile Manufacturers Institute 1130 Connecticut Ave, NW Washington DC 20036 202-862-0500 / f: 202-862-0570 www.atmi.org The China Threat to World Textile and Apparel Trade http:/ 1 Executive Summary The following report is a 22 page analysis of Chinese import increases and
3、 price shifts in 29 quota de- controlled categories since January 1, 2002. It concludes that if China follows the same pattern in 2005, when the bulk of its quotas will be removed, then Chinas share of the U.S. textile and apparel market will rise to over two-thirds of the U.S. market within 24 mont
4、hs. If this occurs, the result will be the largest wave of job losses and plant closures in U.S. textile and apparel history and will likely result in the elimination of textiles and apparel as a major manufacturing employer in the United States. Total U.S. textile and apparel job losses from 2004-6
5、 could reach 630,000, with over 1,300 textile plants closing in the United States over a three-year period. Job losses in the United States will be only a fraction of those that will occur overseas as an estimated $42 billion in export orders from other countries shift to China. This would probably
6、represent one of the largest short-term transfers of wealth in the history of the developing world. A large number of countries, from Mexico to South Africa, from Bangladesh to Haiti, from the Philippines to Turkey, depend on exports of textiles and apparel to the U.S. market for much of their forei
7、gn exchange, not to mention the livelihoods of millions of their workers. The United States is far and away the worlds largest textile and apparel consuming nation, importing $75 billion worth of such goods from more than 70 countries last year 1 . After a review of the trade data, this analysis als
8、o concludes that countries with trade preferences - Mexico, the nations of the Caribbean, Central America and Sub-Saharan Africa, among others - are no more likely to retain market share against China than any of the traditional exporting powers in the Far East. The dependence of a substantial porti
9、on of the U.S. textile industry on these preferential agreements is a significant reason that the textile outlook for U.S. producers is so grim. Mexico, the Caribbean and Central America account for over $10 billion worth of U.S. textile exports - and none of these countries appears capable of count
10、ering the enormous 1According to WTO figures, the U.S. imports 50 percent more textiles and clothing than the EU, and more than three times as much as Japan. Projected Textile and Apparel Export Losses to China Country/Region Loss ($ mil.) CBI -$6,279 Mexico -$5,423 EU -$2,477 Canada -$1,861 Hondura
11、s -$1,763 Korea, South -$1,620 Indonesia -$1,390 Turkey -$1,316 Dominican Republic -$1,287 Guatemala -$1,265 Philippines -$1,236 Italy -$1,218 Thailand -$1,161 Bangladesh -$1,051 El Salvador -$1,015 SUB-SAHARAN AFRICA -$926 ANDEAN -$731 Projected Chinese Control 13% 20% 22% 44% 71% 0% 80% 2002 2003
12、2004 2005 2006U.S. tex tile and apparel import market http:/ 2 advantages that Chinas currency and subsidy regime grant its export machine. In addition, the ability to source fabric and yarn from outside the region does not appear to help Sub-Saharan Africas exports, which may contain such yarns and
13、 fabrics, fell just as rapidly as did the CBIs in China de-controlled categories. As a result, U.S. textile production is expected to plunge and, in relatively short order, many of the nearly one million U.S. workers who depend on the U.S. textile complex appear likely to lose their jobs. 2Indeed, b
14、ecause textile formation is a precursor to apparel assembly, heavy textile job losses are expected to begin in mid-2004 and then continue into 2005 and 2006. One textile executive predicted that the industry could be “closing a plant a day” if China is not restrained. The reports conclusions are bas
15、ed on a sharp drop in Chinese prices once quotas on apparel products were removed in 2002. During those twelve months, the average Chinese price fell by 44 percent, declining from $6.23 per square meter to $3.37 per square meter, a drop of $2.86 per square meter. Prices by suppliers other than China
16、 fell as well but not by nearly as much. The average price of other suppliers fell by 2 percent, dropping from $3.55 per square meter to $3.47 per square meter. The impact on trade patterns from the Chinese price drops was swift and definitive. China increased its exports in the 29 apparel categorie
17、s by $980 million in 2002 while all other suppliers saw their exports drop by $813 million. This trend also accelerated in the first quarter of 2003, when Chinese imports increased by $493 million (compared to Q1 2002) while imports from the rest of the world fell by $71 million. The analysis also e
18、xamined other “proxies” for Chinese behavior in a post-quota world. It looked at Chinese penetration of the Japanese and Australian textile and apparel markets (which have no quota regime in place) and at imports into the U.S. of similar manufactured goods which have not been restrained by quotas. B
19、oth proxies found Chinese penetration of these markets at 70 percent and above. The proxies belie the oft-stated notion that importers or retailers will seek to “spread the risk” by sourcing from multiple major platforms. In each case, importers or retailers instead embraced the cost savings availab
20、le from China and focused almost all of their sourcing there. The analysis illustrates the need for the U.S. government to move quickly to initiate use of the special China textile safeguard to restrain Chinese imports once quotas are removed. Without early and comprehensive use of the special texti
21、le safeguard, China will quickly come to dominate the U.S. textile and apparel market. In addition, the report notes that Chinese export subsidies in the form of Chinese currency manipulation, state subsidization and the use of export tax rebates have given China an unassailable edge in textile and
22、apparel trade. It concludes with the observation that until these anti-free market advantages are removed, WTO members would be within their rights to ask that China be kept under restraint after quotas are removed in 2005. The report notes that the use of the China textile safeguard, even if used e
23、ffectively, is only a short term solution. Thus it is important for the world community to devise some sort of more permanent restraining mechanism which would remain in effect until China removes these anti-competitive supports from its textile sector. 2Consisting of the apparel, textile and textil
24、e machinery and chemical manufacturers and cotton and man-made fibers producers. Projected Textile categories that were only partially removed from quota control (e.g, some products in the category remained under quota) were not included. A smaller number of non-apparel categories have also been rem
25、oved from quota control; these included three yarn categories, five fabric categories and eight made-up categories. These categories will be reviewed at a later date (note: a preliminary review shows that Chinese price drops and import increases have occurred in a range similar to those seen in the
26、29 apparel categories reviewed in this report). Chinese Price Changes According to ATMIs analysis of the 29 apparel categories removed from quota control on January 1, 2002, over the next twelve months prices of goods from China dropped an average 46 percent, falling from an average of $6.23/square
27、meter to $3.37/square meter. Prices of competitive goods from other suppliers also fell, though they could not match the Chinese level. Other suppliers dropped from $3.50/square meter to $3.41/square meter, a drop of 2 percent. In looking at individual categories, China under-priced other suppliers
28、in 22 of 29 apparel categories. However, even in the categories China did not under-price other suppliers, imports from China still rose sharply while imports from those suppliers still fell sharply. In the first quarter of 2003, Chinese prices continued to fall, dropping another 2 percent, to $3.32
29、/sq meter. World prices increased eight percent, rising back to $3.55/square meter. By March of 2003, China had under-priced the rest of the world in 26 out of the 29 apparel categories 3 . Reviewed on a category basis, the Chinese price drops during 2002 were heavily clustered around the 31 percent
30、 to 51 percent range. In terms of principal fiber, with the exception of wool apparel, the price drops were likewise consistently large, averaging between 40 and 50 percent for apparel made from the largest fiber groups cotton and man-made fiber and 26 percent for vegetable fiber products (those mad
31、e of linen, ramie, etc.). The mixed fiber group, which means that the category can contain goods made from any fiber group, saw Chinese prices drop by 57 percent in 2002. Chinese Dominance Looking at market share, China established a quick dominance in all the fiber groupings except in wool, where i
32、ts share increased only slightly. (Wool, however, represented only one half of one percent of trade in the categories analyzed.) In all other categories, Chinese share either doubled or tripled, with the average increase among all categories amounting to 244 percent. This continued in the first quar
33、ter of 3In three categories (431, 843, 844), Chinese prices actually rose, but in these cases the categories were so small (accounting for 2/100ths of total trade) that the effect was insignificant. Regardless of the price increases, Chinese share jumped in two of the three categories in the third c
34、ategory, China already had a 73 percent share, which it maintained. Chinese Price Changes by Fiber Fiber Price Drop Cotton -48% Man-Made Fiber -46% Vegetable Fibers -29% Wool -4% Mixed Fibers -57% Total -46% Chinese Price Changes by Category Percent Drop Number of Categories 0 10 percent 2 11 30 per
35、cent 7 31 50 percent 12 51 percent or more 6 http:/ 5 2003, as the Chinese share jumped to 45 percent. Using current rates of growth, China is projected to increase its share of these imports from 9 percent to 65 percent (or more) in two years time. As measured in volume terms, in 2002, Chinese impo
36、rts in the decontrolled categories increased by 411 million square meters while imports from the rest of the world fell by 200 million square meters. This trend persisted into the first quarter of 2003, when Chinese imports increased by another 175 million square meters while the rest of the world f
37、ell by 13 million square meters. The awesome scale of the Chinese increases deserves some consideration. The apparel categories de-controlled in 2002 represented just 9 percent of apparel imports into the United States yet Chinas growth over the next twelve months in these relatively few categories
38、represented over one third of all growth of all apparel imports into the United States. Bringing the textiles into the picture, the impact of China is even more astonishing. Using almost entirely de-controlled textile and apparel categories, China increased its exports by more last year a total of 2
39、.8 billion square meters - than every other country in the world combined. Using a relatively small number of categories, China was able to leapfrog both Canada and Mexico in 2002 to become far and away the largest exporter of textiles and apparel to the United States. By way of contrast, in 2001, M
40、exico, with 4.3 billion square meters in exports, was more than twice as large as China, at 2.2 billion square meters. By the first quarter of 2003, China, at 6.2 billon square meters, was exporting almost 50 percent more than Mexico. In dollar terms, Chinese exports to the U.S. increased by $980 mi
41、llion in 2002 while imports from the rest of the world fell by $813 million. This trend accelerated in the first quarter of 2003, when Chinese imports increased by $493 million (compared to Q1 2002) while imports from the rest of the world fell by $175 million. In terms of market share as measured b
42、y dollar, prior to 2003, the Chinese share rose less quickly because of the sharp price adjustments China undertook in order to increase volume. Still, Chinese share by dollar volume increased robustly in all major categories except for wool. Overall, the average Chinese share more than doubled in 2
43、002, rising from 15 percent to 31 percent. By Q1 2003, Chinese Share By Dollar Apparel 2001 2002 Percent Change Cotton 17% 28% +65% Man-made fiber 13% 22% +69% Wool apparel 11% 9% -18% Vegetable fiber 27% 53% +96% Mixed 6% 26% +333% Total 15% 31%* +106% * Chinas share rose to 44% during the first qu
44、arter of 2003. Chinese Share by Volume Apparel 2001 2002 Percent Change Cotton 11% 28% +155% Man-made fiber 8% 24% +200% Wool apparel 11% 12% +9% Vegetable fiber 20% 54% +160% Mixed 3% 27% +200% Total 9% 31%* +244% * Chinas share rose further to 45% during the first quarter of 2003. Chinese Dominance 9% 31% 77% 65% 45% 0% 100% 2001 2002 Q1 2003 Full Yr 2003 2004 - Apparel categories already removed from quota http:/
