The Chinese government has
declared textiles and apparel to be a "pillar
industry of the nation" and has spent tens of
billions of dollars to create an industrial sector
that no nation on earth can compete in. This
government intervention takes the form of currency
undervaluation, handouts from government banks
(loan forgiveness), subsidized utility, land and
shipping costs, export tax rebates, tax holidays,
direct industrial subsidization and many more
etc.
The
intense collaboration between the Chinese
government and its textile and apparel sector
enables Chinese exporters to under price its other
competitors, including countries like
Bangladesh and
India which
have lower wage rates. According
to United Nations data,
China
exports apparel products worldwide at average
prices 58 percent below those of other
countries.
And in countries where quotas have not been
used, China has
taken between 60 and 85 percent of the apparel
market. See the
studies and analyses listed below for more
information.
NCTO
is a part of the Global Alliance for Fair Trade in
Textiles (GAFTT), a coalition of 96 trade groups
from 52 countries which are committed to ensuring
that fair play and free markets govern world trade
in textiles and apparel. GAFTT
strongly opposes the Chinese government's effort
to monopolize world textile and apparel trade. Up
to 30 million jobs around the world, mostly from
developing and least developed countries, could be
lost if
China
succeeds.
China's
mercantilist and predatory behavior also poses
real questions for
U.S.
policymakers. These
include:
1) Is
it good for this country to tolerate an enormous
economic power such as
China that
uses its government organs to undermine what we
consider free market principles?
2) It is proper to let the Chinese
government wreak havoc in our markets and our
workers because its government has decided that it
will do whatever its takes for its exporters to
win the textile and apparel game?
3)
Should millions of workers around the globe - and
potentially hundreds of thousands in the
US - be
put out of their jobs because the Chinese
government makes it impossible for their
companies to thrive and prosper? Should
Bangladesh,
Indonesia, the
Philippines,
Turkey,
Mexico and
Caribbean
nations lose billions of dollars in export
earnings because their governments believe in free
markets and
China does
not?
The
long term consequences of the emergence of
CHINA Inc -
this intense collaboration of government and
industry - should trouble anyone that believes in
the free market and also that fair competition
should be the ultimate arbiter of the marketplace.
