China would consider adopting measures to protect its interests and those of its trading partners once global textile quotas were scrapped at the end of this month, a government spokesman said Friday.

The 1994 Uruguay trade round agreed that a quota system which had governed global textile trade for decades would expire Dec. 31 this year. Most analysts expect China to dominate the post-quota world market.

"We will adopt a responsible attitude toward the textile issue," Vice Foreign Minister Zhang Yesui told a news conference ahead of a Dec. 7-9 visit by Premier Wen Jiabao to the Netherlands for a China-European Union summit.

"We will consider adopting some measures to protect the interests of the Chinese side while at the same time looking after the interests of our cooperating partners," Zhang said.

China made 17 percent of the world��s textiles and clothes last year. The World Trade Organization (WTO) sees that market share rocketing above 50 percent within three years, and in the United States alone, textile makers expect some US$42 billion in clothing orders to go China's way by 2006.

Retailers like Wal-Mart Stores Inc., Gap Inc., Hennes and Mauritz, Giordano, Inditex and Esprit will be able to buy more cheap Chinese textiles, reducing costs by sourcing from fewer suppliers. They will also be able to stop paying for scarce quotas, which according to brokerage CLSA, account for between 5 and 38 percent of the cost of a garment once it has been loaded on a ship.

China's gain will be channelled to its textile makers including Texwinca, Fountain Set and Victory City, which have already ramped up capacity by 15-60 percent in anticipation, according to CLSA.

Consumers are also expected to win, with retail prices tipped to fall by 10-20 percent in the post-quota era. India, another large-scale low-cost producer, is also seen winning market share, while the losers will be the textiles industries of smaller countries such as Bangladesh, Cambodia, and Mexico.

The U.S. textile industry, which has lost hundreds of thousands of jobs in recent years, fears even more losses once textile quotas are scrapped.

Zhang said China was very understanding of other countries�� fears over the disappearance of the quotas.

"As an important member of the WTO, China has the right to enjoy, and the obligation to maintain, the results of the Uruguay negotiations," he said.

A solution to differences between China and European Union members could be found through dialogue and cooperation, he said.

China's exports are rising fast. In the first nine months of this year, it exported US$4.5 billion worth of apparel and accessories, up 19 percent on the same 2003 period. Exports of yarns and knitted fabrics jumped 26 percent to US$2.44 billion.

The European Union has said it will set up a special monitoring system for textile imports from China after the quotas are abolished.

The picture immediately after the removal of quotas is expected to be murky, however, because WTO members can file "anti-surge" proceedings against textile imports that prove disruptive to their domestic industries.

WTO rules also allow the United States to impose emergency quotas until 2008 that would limit China's growth in individual clothing and textile categories to just 7.5 percent above the previous year.

Source: Shenzhen Daily-Agencies