China Update
 
January 24, 2002
 

EU Outlines Post-WTO Accession Import Quotas on Chinese Textiles. The European Union (EU) intends to maintain quotas on some Chinese textile imports following China's formal accession to the World Trade Organization. Quotas were eliminated on 19 categories of Chinese textiles upon China's accession, but the EU will maintain import quotas on bed linen, woven fabrics, yarn, linen, sacks and bags made of flax or ramie, and on several categories of silk fabrics and apparel. The remaining quotas will be removed by January 1, 2005, contingent on Beijing meeting its commitment to remove state trading controls on silk products as agreed in the EU-China bilateral agreement on Chinese WTO accession.

China Encourages Minority Foreign Ownership of Its Airlines. China is increasing from 35 to 49 percent the cap on foreign ownership of its airlines. This move occurs at the same time that the Civil Aviation Authority of China has ordered that its airlines merge into three groups headed up by the largest airlines: Air China, China Eastern and China Southern. Analysts believe the move to encourage foreign investors is aimed at boosting the competitiveness of domestic carriers, already concerned about the costs of the forced mergers with their heavily indebted rivals.