China has announced new limits on its surging textile exports to developed nations in a bid to ease tensions with the United States and Europe over flooding of its lowpriced textiles into their markets. The rules limiting its exports come after Beijing agreed to cap exports to the European Union. The United States had earlier imposed its
own limits on Chinese textile imports.

The United States and the EU complain that their textile producers have been hurt by a surge in Chinese imports since a worldwide quota system ended on January 1. Textile industry in Europe says Chinese products are threatening some 2.5 million jobs. The EU has blamed China for a drop of up to 50% in Portugal’s production of T-shirts

As per an agreement signed in June with the EU, China has promised to limit its exports to Europe from 10 types of textile goods to between 8% and 12.5% a year. The US cap is lower, limiting growth of Chinese textile imports to America to 7.5% a year.
The new quota system would assign Chinese textile producers a share of the country’s exports under a complex formula based on each company’s sales before January. The rules were posted on the Ministry of Commerce Web site and dated Sunday, June 19, 2005.