(2005-01-06) China Textile Import Quotas

Article about textile Import Quota-s and China. Setting limits on how much can be imported from China hasn't reduced Off Shoring, just spread it out across a large number of countries. Those quotas are due to expire (hmm, Dec31'2004! did someone do anything?), and lots of those other economies could be hit hard. Many South Asian countries say they are fighting unfair competition. Bangladeshi exporter Faruq, like many others, believes that China manipulates its currency to keep it undervalued against the U.S. dollar, thereby making its exports cheaper than Bangladesh's. But even if its currency rose against the dollar, China would still have tremendous advantages, as shown by data compiled in an International Monetary Fund/IMF working paper. The average Chinese garment-industry worker was paid $1,600 in 2001, more than double his Indian counterpart's wage and four times the money earned by the Bangladeshi. Despite the higher pay, the study found, the Chinese worker's productivity was significantly higher, adding $5,000 a year in value to the garments he processed, compared with $2,600 for his Indian equivalent and $900 for the Bangladeshi. The difference reflects China's greater investment in modern manufacturing equipment and infrastructure like transportation.

Virginia Postrel makes other interesting points.