US-Korea deal to directly influence similar Chinese textile exports

21 Oct '11

2 min read

The influence of the "US-Korea agreement" on trade flows of China's textile and apparel exports to the US is directly dependent on similarity of Chinese and Korean textile and apparel exports to the US.

Prices quoted by the Chinese exporters will also play a big role, since they will be at a disadvantage vis-à-vis their South Korean counterparts. Similar products will be more vulnerable to a squeeze.

An analysis of trade data from 2005 to 2010 shows that exports of Chinese and South Korean textiles and apparel to the US are highly similar in overall product structure, but the similarity displays a significant downward trend in recent years.

Considering 100 as the highest value, the similarity of China's and South Korea's exports to the US reached 69.17 in 2005, but the figure dropped to 40.67 by 2010.

The major factor in the decline is from Korea. In 2005, among Korean textile and apparel exports to the US, 60.5 percent were apparel products, 30.7 percent were fabrics; but in 2010, apparel exports accounted for 30.1 percent of Korean exports, while fabrics accounted for 53.7 percent.

Over the same period, Chinese textile and apparel exports to the U.S. remained stable in overall structure, the share of clothing products stabilized at about 70 percent between 2005 and 2010 or even increased slightly, which indicates that there has been no material change in the structure of China emerging as an exporter of fully processed textile products.

Secondly, South Korea has a definite edge in production of chemical fibre products, a segment in which, Chinese chemical fibre producers will find difficult to compete in terms of pricing.

However, when considering textile products like woven garments, knitwear, industrial textiles, woolen textiles, etc, the Chinese manufacturers will not face the same challenge as their chemical fibre counterparts.

Fibre2fashion News Desk - China

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