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Last Updated: Thursday, 19 May, 2005, 08:56 GMT 09:56 UK
China stands firm in textiles row
Chinese textile worker
China rejects charges that its trade practices are unfair
China says it will not cut its booming textile exports to the US and Europe, as Brussels and Washington expressed fears over the impact on local firms.

Chinese Commerce Minister Bo Xilai said his country was abiding by World Trade Organization (WTO) rules and accused the EU and US of "double standards".

On Wednesday, the US imposed curbs on four more Chinese garment categories.

The EU is also concerned about a surge in Chinese textile exports since a global quota system ended in January.

Job losses

Exports of certain Chinese clothing items to Europe have risen by more than 500% since the 30-year-old Multi Fibre Agreement expired.

In parts of some [EU] member states, they are suffering very badly
EU Trade Commissioner Peter Mandelson

On Wednesday, EU Trade Commissioner Peter Mandelson described the impact of this "surge" as "very serious".

Speaking to the BBC's Today programme, he said: "In parts of some member states, they are suffering very badly.

"If that were to continue, you would see many businesses and [much] employment going to the wall before the end of the year."

Mr Mandelson said he was also "concerned at the impact on developing nations like Sri Lanka."

He favours negotiations to reduce the level of Chinese imports, rather than quotas. "I don't want quotas," he said.

This follows remarks the previous day when he said his inquiry found a "very high" threat to T-shirt and flax yarn makers. He said China had to begin formal talks on restricting such goods or face penalties.

For its part, the US textile industry says it has lost more than 16,000 jobs since the start of this year.

Currency pressure

Chinese woman arranges a clothing display
The US is threatening to impose 27.5% tariffs on Chinese clothes

But China does not appear to be keen to reduce its current level of exports.

Mr Bo told an audience of international business executives in Beijing on Wednesday: "The integration of the textile trade is a right we have gained since China joined the WTO and China will not impose curbs on its textile products."

He said the EU and US had not taken the opportunity to lift their textile quotas in stages, so their markets had become flooded once the quota system expired.

"Once an agreement is reached, everybody has to abide by their commitment. Otherwise there is no point in negotiating rules," he said.

The China Textile Industry Association has also defended the country's export policy.

Gao Yong, the association's vice-president, was quoted by the official Xinhua news agency as saying: "China has done all that it can to curb the fast-growing exports and abide by its WTO commitments."

US restrictions

On Wednesday, the US expanded its list of quotas on Chinese-made garments to include men's and boys' shirts, man-made fibre trousers, knit shirts and blouses and combed cotton yarn.

Other goods including cotton trousers and underwear are already subject to curbs.

Globalisation is neither good nor bad, It's just an unstoppable tendency
Andres Wang, Taipei, Taiwan

The row over textiles comes as China faces increasing pressure from Washington over its currency, the yuan, which has a fixed rate of exchange against the dollar.

Many US politicians believe the yuan's true value is artificially depressed, helping it to export goods cheaply.

On Wednesday, US Treasury Secretary John Snow said he expected China to reform the yuan soon, allowing it to fluctuate more freely against the dollar.

The US Senate is due to vote on a bill later this year which would impose a 27.5% tariff on all Chinese imports to the US unless China removes the currency peg within six months.

EU and Chinese officials explain their concerns

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