China Considers Curbs On Foreign Investment In Textiles

China is considering restrictions on foreign investment in textiles, garments and sectors where domestic production capacity is already excessive, a senior official of the State Statistical Bureau said on Tuesday.

The production capacity of some of our traditional industries, such as textiles and garments, is pitifully excessive, Li Qiming, director of the bureaus department of industry and transportation statistics, told Reuters.

We are currently considering...whether to restrict foreign businessmen from entering sectors in which domestic production capacity is already abundant, Li said. He did not elaborate.

The losses of state enterprises in these industries exceed the national average, Li said but gave no specific figures.

China has said it would curb textile output and unnecessary expansion in the industry in 1997 to reduce losses in the state sector. It has set a target of phasing out obsolete textile equipment, including 10 million cotton spindles. There were 429 state textile enterprises that posted losses of more than five million yuan ($602,000) each in 1995. Their combined losses reached 5.21 billion yuan.

Indigenous enterprises are being squeezed...in some traditional industries, Li told a news conference. We may have to consider protection, he said.

The bureau spent one year and mobilised five million pollsters to conduct a survey of industries that showed that foreign investment was concentrated mainly in electronics, telecommunications, textile, garment and food processing, officials said.