Recently, the buying and selling price of quotas has shrunk severely. The cancellation of quotas is “generally a good thing”
According to the relevant provisions of my country’s accession to the WTO, special restrictions on textiles will expire at the end of 2019, and the Sino-US and Sino-European bilateral textile memorandums of understanding will also end at the same time. Recently, the person in charge of the Foreign Trade Department of the Ministry of Commerce made it clear that starting from January 1, 2019, the quantity and license management of textile exports to the United States (implemented since January 1, 2006) and the export license of textiles to the EU will no longer be implemented Management (implemented from January 1, 2019).
After three or four years of quota restrictions, textile exports entered the free trade stage. What impact will this have on Ningbo’s textile export companies? Will they face new pressures?
Market situation: The trading price of quotas has plummeted recently
On January 1 next year, China’s textile exports will officially usher in the “quota-free era.” Recently, quota prices, which had been rising “somersaulting” in the past period, have begun to plummet.
The quota prices of pullovers and trousers exported by Ningbo’s textile enterprises, which have large export volumes, have dropped sharply. Miss Gao, a document clerk at a small textile company in Xiangshan, gave an example to reporters. For example, the quota price of pullovers exported to the United States was US$8 per dozen when it was high, but now it can be bought for less than US$1; the quota price of pants is, When it was high, it was about 13 US dollars per dozen, but now it has dropped to less than 3 US dollars. “Our company has saved a lot of money to buy quotas.”
There are also new developments in the quota trading market. On November 7, 2019, the Ministry of Commerce announced the number of applications for the third performance allocation of textiles exported to the United States in 2019. Although the total amount is not small, very few companies in Ningbo responded. “Since the price for buying quotas privately is already lower than the bidding price, why should companies apply for quotas?” the import and export manager of a large textile company in Ningbo told reporters.
The person in charge of a medium-sized textile company in Ningbo said: “Although the Ministry of Commerce has obviously shortened the quota bidding time this time, it is of little significance to our company. Because even if the company takes orders for production now, it is too late. Products will be exported to the United States before January 1, 2019, so the remaining quota will become a piece of waste paper.”
Impact: It is good for companies that have not received quotas
For most companies that have no chance of obtaining quotas, the cancellation of quotas is obviously good news.
When the issue of export quotas was brought up, Mr. Chai of a clothing import and export company in Xiangshan could not forget the “pain” that the quota issue had brought to the company – in the past, the quota prices of various products in the quota market were high, and the quota costs even accounted for Accounting for 80% to 85% of the product cost, “our company spent millions of dollars buying quotas in the first two years.” Facing the end of the quota era, Mr. Chai said that the company can save a fortune. Expenditure on quotas provides an opportunity to compete fairly with large companies.
For those large companies that sell export quotas privately, they will lose an additional profit. For example, a clothing company located in Yinzhou receives a large number of quotas every year. If part of it cannot be used up, it can be sold to other small businesses with equal quotas. Industry insiders have calculated that in 2006, if a company could obtain a quota equivalent to 10 million yuan from the state every year, the income from selling the quota alone should be around 5 million yuan.
Regarding the imminent liberalization of quotas, large textile companies are not without concerns. “If textile enterprises after the quota is cancelled, will small enterprises join the price war one after another, blindly focus on ‘running volume’, and compete on price? There may be a chaotic situation similar to the increase in volume and decrease in price in 2005. We need to re- We have been hit by ‘trade sticks’ such as anti-dumping,” said a director of a large textile company in Ningbo.
Analysis: Quota cancellation is “generally a good thing”
“I think it is a good thing overall that the quota has been cancelled.” Zhou Anbang, deputy director of the Ningbo Textile and Garment Industry Management Office, said, “Whether you can eat after the quota is cancelled depends on the ability of each company, maybe The Chinese can also ‘steal’ a lot of orders from foreigners.”
According to recent statistical results of Ningbo’s textile and garment industry, some orders that were lost abroad have returned to Xiangshan, Ningbo.
However, the concerns of enterprises also exist objectively. Boss Mao, who runs a textile factory in Qiuai, believes that in his opinion, entering the quota-free era next year is not a good thing under the current situation. “On the contrary, we will face more buyers bargaining. First of all, buyers will take the opportunity to lower prices because Chinese export companies have less quota costs, causing export price chaos.” In addition, in Boss Mao’s view, the recent financial crisis has weakened the America’s ability to pay is the crux of the matter.
Some textile companies said that with the end of the export quota era, they are worried that the U.S. industry may not give up taking measures to protect domestic industries. my country’s textile and apparel industry will soon face severe trade frictions, especially special safeguard measures and anti-dumping. and countervailing investigations are more likely. “I’m afraid that after the old threshold is gone, new barriers will come again. After the EU canceled its export quotas, it then imposed many restrictions on China’s product exports.system. “Mr. Zhang, a salesman who has been engaged in foreign trade for several years, said that how to overcome the next trade barriers will become the company’s “new homework.”
AAFNJKIYO9P
Disclaimer:
Disclaimer: Some of the texts, pictures, audios, and videos of some articles published on this site are from the Internet and do not represent the views of this site. The copyrights belong to the original authors. If you find that the information reproduced on this website infringes upon your rights, please contact us and we will change or delete it as soon as possible.
AA
