China gives ground in textile row

China is a dominant force in textile production

China says it will raise export tariffs on 74 textile product categories from June, in an apparent effort to calm US and EU fears over cheap Chinese goods.

The increases range as high as 400%, the official Xinhua news agency said, quoting the finance ministry.

Washington and Brussels have expressed concerns about a surge in Chinese textile exports since a global quota system ended in January.

The EU declined to comment, saying it would seek further details next week.

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

The US textile industry says it has lost more than 16,000 jobs since the start of this year, while the EU says its T-shirt and flax yarn makers are at serious risk.

The US has already imposed quotas on a number of different types of Chinese-made garments and the EU has threatened penalties.

'Contradictory'

European Commission spokeswoman Francoise Le Bail told a news conference in Brussels that the aim was to reach a negotiated solution with China to resolve the dispute.

"There have been contradictory reports on what exactly the Chinese authorities were about to do," she said, adding that the EU needed to check the details "more precisely" with Chinese officials before reacting to their latest move.

China rejects charges that its trade practices are unfair

She said China's textile negotiator was coming to Brussels next week to see EU Trade Commissioner Peter Mandelson, providing "a good opportunity" to explore the issue.

Until the latest announcement, China had appeared to be standing firm on the issue, saying it would not cut textile exports.

On Wednesday, 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".

Mr Bo told an audience of international business executives in Beijing: "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."

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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.

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.