Beijing set to act over tough new EU quotas

CHINA appears to be taking action over the European Union's (EU) sudden decision to slap quotas on some textile products and seven categories of Chinese-made goods.

After two months of relative silence following imposition of the measures, China will send officials to Brussels for discussions with EU representatives.

Hong Kong General Chamber of Commerce director Ian Christie commented: ''China has been very quiet about the issue.'' According to Hong Kong Trade Department principal officer Brian Chan, discussions will be held about a separate bilateral agreement on textiles not covered by the Multi-Fibre Arrangement (MFA).

''There have been suggestions that the EU may move a little bit on the limit on quotas for the quota-hit textile goods,'' Mr Chan said.

''This can be read as the possibility of an increase in the quotas for those textile items for this year.''.

Among the textile categories affected are silk, ramie and linen.

On the possibility of increasing quotas for the seven categories of Chinese-made goods, Mr Chan said: ''Europe can be flexible, depending on how much pressure China can apply on them.'' The EU hastily passed rulings to place quotas on some textile products and other Chinese-made goods earlier this year. The ruling came into effect on March 15.

The seven categories of products are toys, footwear, gloves, porcelain kitchen and tableware, glassware and radios.

The Hong Kong General Chamber of Commerce said the EU had placed a further 26 items under surveillance - including mountain bikes, brooms and brushes.

''This poses a further problem for all concerned,'' said Mr Christie.

Toy manufacturers are expected to be hardest hit.

Mr Christie said there were about 2,500 toy factories in China which were owned by Hong Kong businessmen.

The factories employ about a million workers, and they are expected to be substantially affected.

''Some of them may be forced to close or relocate,'' he said. ''I know of one or two factories which may be relocating.'' Mr Christie said that what pushed the panic button was the chaos created by the rapidly implemented system, which allowed no time for forward planning.

''Both European importers and Hong Kong exporters are groping in the dark for clarification,'' he said.

Meanwhile, the head of the EU office in Hong Kong, Etienne Reuter, has pledged to act as a conduit to pass on Hong Kong traders' concern about the EU quotas.