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Chinese subsidies heckle US textile producers
Jan '10
Increasing subsidies by the Chinese Government on their textile and garment exporters is posing a threat to the US textile industry.

The National Council of Textile Organizations (NCTO) is of the view that, China has adopted a slew of mercantilist actions designed to increase its market share and exports to the US textile sector despite a pledge it made at the April G-20 summit in London not to take any protectionist actions through the end of 2010.

For instance, the Chinese Government has allegedly provided some US$10 billion in export subsidies to its textile sector by increasing value-added tax rebate rates provided to textile and apparel exports from 11 percent to 16 percent.

NCTO further claims that China continues to provide massive subsidies to domestic textile and apparel manufacturers in the form of research and technology grants, bank lending programmes, tax exemptions and preferential tax programmes, in addition to the already mentioned VAT rebates for exports.

China's subsidy structure also remains opaque and is plagued by a lack of transparency, which makes it difficult to determine the subsidies that are actually being provided to domestic producers.

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Fibre2fashion News Desk - India

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