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Last Updated: Thursday, 19 May 2005, 13:09 GMT 14:09 UK
China strengthens grip on textiles trade
By Claire Penketh
BBC News

At the beginning of this year, trade barriers on textiles across the globe were lifted as the Multi-Fibre Agreement came to an end.

Chinese textile workers
China is on its way to becoming the main player in textiles production
At the time, there were warnings of the dire consequences for trade in textiles - predictions of a flood of goods from China and of the destruction of the textile industries in both developed and developing countries.

The textile industry has, historically, been a catalyst for industrialisation, helping to kick-start many economies, big and small.

But it is now increasingly dominated by just one country.

"I think it is no exaggeration to say that China has hijacked the world market in textiles and clothing," says Neil Kearney, secretary-general of the Brussels-based International Textile, Garment and Leather Workers Federation.

"They have taken an enormous share of the market in a very short time - a market that is not expanding, so that means that other suppliers are suffering. And in the main, those are some of the poorest countries in the world."

He says that since 1 January this year, China's textile exports have surged dramatically.

"Woven shirts - China increased its exports into the European market from 15 million in the first quarter of 2004 to 39 million in 2005. That's an increase of 164%," he says.

"For T-shirts, the increase was from 84 million to 361 million, a 328% increase. For women's dresses, from four million to 26 million - that's a nearly 600% increase. For trousers, from 31 million to 240 million - that's nearly a 700% increase.

"Sweaters and pullovers - 13 million in the first quarter of 2004, 125 million in the first quarter of 2005. That's about an 850% increase."

Delayed impact

In recent weeks, both the European Union and the US have reacted by announcing reviews of the full impact of more Chinese textile exports, which, it is claimed, threatens jobs in their own textile industries.

And at a rally in Dhaka, Bangladesh, trade unionist Naz Maakder tells workers it is feared, in the future, that at least one million textile jobs will be lost in Bangladesh - half the workforce.

She says the full impact will not be felt for another year.

Across the world, we estimate that as many as 30 million jobs could be on the move, primarily to China. And that would have a devastating impact on some of the poorest economies
Neil Kearney
International Textile, Garment and Leather Workers Federation Secretary-General

"Right now, we don't have that big problem yet, because last year they got orders equal to what they got in the past."

But she adds that despite this, factories are closing and jobs are being lost.

The latest figures show that, overall, exports of Bangladeshi ready-made garments grew slightly in the first three months of this year.

But sales of the main market leader - woven garments such as jeans - fell, fuelling speculation that US buyers are turning to lower cost goods from China.

So far, evidence about job losses in Bangladeshi factories is mostly anecdotal - like the case of 22-year-old Srity Akger, who earned the equivalent of $35 a month to support her family before she was made redundant in January.

"I don't know how I will live now because if you want to live in Dhaka, you need money. There are seven, eight members in our family, they are dependent on me. When I was working I earned about 2,200 taka ($35/20), but in the last four months I haven't earned a single taka."

Worldwide effect

Mr Kearney says it is a picture repeated elsewhere.

"Lesotho in Africa depends on textiles and clothing for 99.14% of its export earnings. Some 20,000 jobs have disappeared there since the beginning of January.

"The other day the government of Sri Lanka indicated that something like 36 factories had closed, with a loss of about 26,000 jobs since the beginning of the year.

"Cambodia says that about a tenth of its industry has disappeared in the last three months - 20 factories and about 26,000 jobs.

"Across the world, we estimate that as many as 30 million jobs could be on the move, primarily to China. And that would have a devastating impact on some of the poorest economies."

And he says that both European and US manufacturers have also begun laying off workers - in Spain alone, 20,000 textile jobs have been lost.

But Keith Rockwell, spokesman for the World Trade Organisation in Geneva, does not agree with this bleak outlook. And he says that on closer examination, the available figures are not conclusive.

"With respect to the crisis being great - well, it's difficult to know fully at this point, because we only have - at least in the United States, which seems to have the best import data - two months of data.

"It's true that, in terms of the shipment value, China's shipments to the US are up by 68%. It's also true that shipments from Vietnam are up by 19%, sub-Saharan Africa by 12%, Bangladesh 11%, Thailand 19%, Honduras 15% and so forth."

Yet the reality is that China is now the dominant player - and, according to many poorer nations, sooner or later they will need support, to head off the impact from the biggest buyers looking more to China.

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