Socks enterprises face export crisis

30 Nov '06
2 min read

Since last November, the US re-imposed quantitative restriction on part of Chinese socks. Meanwhile, enterprises used up nearly half the quantity under quotas in a short span of four months by the end of February.

At the same time, the US re-imposed special protection measures on the same products, with effective limitation for one year. Since then, the quantity of Chinese socks to be exported to the US was confined within 42.43 million pairs.

By the end of February, in a short time of four months, Chinese socks manufacturers used up 46.6 percent of the restricted quantity.

Experts are extremely worrying about this phenomenon. They point out that when socks makers learned the restricted quantity only left for half, they even wildly and irrationally expanded their exports. They did this as if 'the blind man touches the elephant'.

In fact, many socks makers in Zhejiang enlarged their exports to the US by reducing price as a cutthroat weapon, in order to grab export opportunities and gain market share.

Industrial insiders warn, if such development continues, socks makers will use up all the restricted quantity in four months, and then many factories have to stop production and their workers will lose jobs.

When the US re-opens the import gate for Chinese socks this November, those not so strong medium and small business enterprises will be eliminated out of the game. Therefore socks manufacturers will face a new round of 'shuffle cards'.

However, even if big enterprises could survive the ruthless competition, there are still some variables. That is to say, if big enterprises further reduce their prices to fight for the existence, American can again adopt anti-dumping measures against socks. Chinese socks will be blocked outside American gate, once the US imposes high anti-dumping duty on products.

Fibre2fashion, News Desk - China

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