According to an overview of the European textile industry, released by the EU, the disruptive impact of liberalisation of Chinese textile exports to the EU in 2005 has been limited to a fairly narrow range of product categories. However, in the categories affected, there have been absolute rises in textile imports and steep falls in unit prices.
The report states that, “China’s share of exports to the EU in the textile categories liberalised on January 1, 2005, has increased sharply at the expense of traditional EU suppliers, mainly in Asia but also in North Africa. There has, however, been only a modest rise in textile imports to the EU, either in the 35 products liberalised on January 1, 2005, or in total textile imports.”
According to the statement, in 2005, China increased its exports to the EU by 42% in value and by 36% in volume. For categories liberalised in 2005 there was an increase in China’s market share by 130% in volume and 82% in value, which suggests significant falls in unit prices. In these products China, India the US and Turkey were the only significant suppliers to have increased their exports in 2005. India’s increase in exports by value was 18%; the US’s 14% and Turkey’s 4%.
This has been at the expense of other suppliers to the EU. All other major suppliers have suffered export displacement in products liberalised in 2005. Pakistan, Indonesia, Thailand, South Korea, the Philippines, Taiwan, Hong Kong and Macao have all seen exports fall in value.and the most significant displacement by China has been exports previously originating from Hong Kong, Macao and Taiwan.
During the first quarter of 2006 world exports in all textile categories to the EU decreased by 11% in volume. As far as China is concerned there is an overall decrease in exports to the EU of -12% in volume while unit prices increased by 9%. This was said to be largely due to the quantitative limits introduced in June 2005 which cover the ten most sensitive textile categories.
On a positive note, China is becoming a key growth market for European textiles. EU exports to China were up 15 % in 2005 and 16% in value for the first quarter of 2006— although yearly exports still account for less than €1 billion.
