Ask someone if they prefer cheaper clothes prices for the same quality product and the answer is obvious. Likewise the manufacturer who can produce the clothes at a cheaper price but still turn a profit. Especially happy should be the Governments of the manufacturing nation (all those extras jobs) and the consuming nations (all those happy voters/consumers). Alas, not always.

On January 1st this year the world abolished quotas on textiles. China was expected to rapidly claim market share from other producers who had previously benefited from favourable quotas. And so it has been. In the extended entry is a chart from today's SCMP detailing China's textile exports to America and the EU. Some of the figures are stunning. From January 2004 to January 2005 China's exports of cotton trousers to the USA increased by 1,332% and of cotton knit shirts by 1,836%. Over the same period to the EU exports of jerseys expanded by 735% and blouses by 301%. At the same time the average unit cost of those jerseys and blouses fell by 36%. People are buying more for less. But it's not that simple. China is rightly petrified of protectionist action by the EU and America, with both domestic and international competitors wailing. The option exists for these countries to impose "safe-guard actions" to protect their domestic industries, which will re-impose quotas. But from the SCMP:

Some industry executives, however, disputed that much had changed. They argue that with the scrapping of quota controls, firms that once disguised their China-made goods as Hong Kong, Macau or Taiwan exports are simply reporting the real country of origin.

"A large part of this increase is just a switch from declared `Hong Kong origin' to `China origin', rather than an actual increase in China manufacturing," said one French textile trader. "China quotas used to be more expensive than Hong Kong quotas, so people used Hong Kong quotas for goods made in China. What you see is just the reality that used to be the case for many years." As evidence, the trader argues that mainland logistics firms have not seen any large rises in textile shipments from China in recent months.

It's a race to see who can impose the restrictions first: China or the EU/USA. So if you are wondering why your clothes were cheaper for a couple of months before they became more expensive again, this is the answer: because countries are competing over trade barriers, not on products and price.

From the SCMP, EU and USA imports of Chinese made apparel.