The new joint surveillance system will begin on 1 January 2008 and will operate for one year. It will monitor the issuing of export licences in mainland China and the importation of the textile and clothing products into the EU. The joint surveillance system should cover 95% of textile trade, extending to 8 out of 10 categories currently subject to the current quotas, namely categories 4 (T-shirts), 5 (pullovers), 6 (trousers), 7 (blouses), 26 (dresses), 31 (brassieres), 20 (bed linen) and 115 (flax yarn).
At the same time the China Chamber of Commerce for Import and Export of Textiles, and the China National Textiles and Apparel Council and China Association of Enterprises with foreign investment have announced that entry barriers will be imposed for qualified textile enterprises to the export to the EU. This move is intended to control China’s export and reduce friction with China’s major trading partners.
Eight categories of textile products as mentioned above will be monitored bilaterally, but no restrictions will be imposed on the product volume. With the new rule, China will issue export licences to qualified exporters, and EU will implement automatic import licensing system.
It was also mentioned that some of the new entry requirements issued by the Ministry of Commerce require companies to have a registered capital of more than RMB 500,000, more than three years of textile exports with the EU and more than US$10,000 worth of textile exports to the EU. In addition, the companies have to be an existing member of China Textile Association and ensure that there are no violation records of intellectual property rights for three years.