Blog: Export plan reopens China subsidies debate
Leonie Barrie | 30 April 2009
China's three-year plan to support the country's textile industry is typically short on details about how, exactly, anything will be implemented. The idea to grow production and exports and even boost domestic consumption might look good on paper, although the reality of course will be much harder to achieve.
But one group will surely be pleased by the proposals: US textile lobbyists. They’ve long been arguing that China over-subsidises its textile firms and urging tough action against the country’s “predatory practices.”
According to calculations by the National Council of Textile Organizations (NCTO), in 2007 China provided 73 subsidies to its textile industry. And as many as two dozen of these were export contingent.
But while the US Treasury department recently refrained from accusing China of illegally manipulating its currency – much to the annoyance of textile trade groups who argue an artificially weak yuan disadvantages US manufacturers – an 8% annual growth in Chinese exports over the next three years boosted by subsidies from Beijing will be much harder to dismiss.
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