By staff reporter Wang Shanshan

China’s Ministry of Commerce announced October 26 it would cancel a quota and licensing policy that restricted textile exports to the United States and Europe, starting January 1.

Meanwhile, concerns around the world about a possible surge in Chinese textile shipments next year prompted the ministry to say it would step up talks with major trading partners to ensure a smooth transition.

The limits on Chinese textile exporters date to 2005, after a flood of Chinese goods followed the global lifting of textile quotas under a World Trade Organization agreement.

A ministry official told Caijing that ending the quota policy, which was due to expire at the end of 2008, would benefit China’s distressed textile exporters amid the current slowdown in overseas demand.

According to customs office statistics, China’s textile export growth has slowed since the beginning of the year. During the first nine months of 2008, exports of textiles and apparel totaled US$ 136.9 billion, up 8.1 percent year-on-year, compared with a 20 percent growth rate for the same period last year.

Exports to the United States topped US$ 19.2 billion, a 1.4 percent year-on-year increase. But that was down from a 28 percent increase a year ago.

Data from the China Textile Industry Association indicated that exports to the United States and Europe accounted for 32 percent of China’s overseas textile sales in 2007.

In a separate effort to boost the industry, the government last week raised export tax rebates for textiles and other products.

However, the end of quota system has raised fears in some countries about a possible increase in Chinese textiles on the global market.

In September, 75 U.S. Congress members asked the Bush Administration to carefully track Chinese-made textiles after the quotas expire. And in early October, textile industry associations in 17 countries including Cambodia, Mexico and South Africa urged the U.S. government to continue monitoring the trade practices of China’s textile industry, claiming Chinese exports have hurt their domestic industries.

Industry experts expect Chinese textile makers to face more investigations and restrictions in the U.S. and European markets next year.