China to increase export charges after clothes quotas row

China will drastically raise export tariffs on 74 categories of textile products, the government said today, in an apparent effort to avert further confrontation with the US and Europe over the surge of Chinese goods in their markets.

The increase, which takes effect on June 1, could be as much as 400% for most of the products, the Xinhua News Agency said in a one-sentence dispatch.

No other details were given.

The move comes as China is being pressured by the United States, the European Union and other producers to restrain its exports of inexpensive textiles, which have soared since a global quota system ended on January 1.

The US imposed quotas on Wednesday to limit growth of Chinese imports to 7.5% a year. They apply to men's and boy's cotton and man-made fibre shirts, man-made fibre trousers, man-made fibre knit shirts and blouses, and combed cotton yarn.

On May 13, Washington imposed similar restrictions on Chinese-made cotton trousers, cotton knit shirts and underwear.

The EU opened an investigation last month after reporting that imports of some Chinese textiles have risen by up to 534% since January 1. The outcome could mean that the bloc re-imposes some quotas.

EU trade chief Peter Mandelson said this week that European producers needed "a limited but no less important breathing space".

China's commerce ministry expressed "firm opposition and strong displeasure" to the new US quotas yesterday and said it might respond by taking action through the World Trade Organisation.

Commerce minister Bo Xilai this week called the restrictions "unfair." He said Europe and the United States dragged their feet on carrying out promises to open markets before a worldwide quota system ended.

The Chinese foreign ministry, however, appealed to Washington to settle the dispute through dialogue instead of unilateral action.