End to trading of rights does away with system that benefited larger producers
New regulations governing the allocation of export quotas to garment manufactures in China will not impose additional costs on exporters and will help small businesses to enter the market, an economist says.
The rules announced by the Ministry of Commerce prohibit the trade or transfer of quotas, a practice that previously inflated garment prices.
They also gave all garment manufacturers a chance of being allocated quotas, whereas in the past they were given only to large established companies, said Daniel Poon, an assistant chief economist with Hong Kong's Trade and Development Council.
International quotas capping Chinese textile imports in Word Trade Organisation countries expired on January 1. But import surges in certain textile categories prompted the United States and European Union to impose temporary restrictions on certain import categories.
The new measures control the volume of exports from the Chinese side, allowing companies to obtain export licences only if they have been allocated quotas.
