Hong Kong's Trade Development Council even advised Hong Kong's apparel and textile producers to establish operations outside China to escape likely retaliatory actions by the United States against Chinese textiles and garments.
The European Union has already imposed emergency safeguard measures, and the US was expected to follow suit, as US producers keep turning up the volume demanding reinstatement of quotas.
Hong Kong-based companies have been urged to provide US authorities with information that might qualify them for separate and lower anti-dumping rates. Washington has already amended its anti-dumping laws on economies that do not qualify as "market economies", China being a principal target. That makes it tough for Hong Kong with mainland connections to qualify for lower tariff rates in the event of anti-dumping measures. Trade partners can charge countries which don't enjoy "market economy status" (MES) with dumping and the burden is on the exporter to prove otherwise.
The EU said it would impose emergency quotas on Chinese textile imports if volumes increased between 10% and 100% from 2004 levels, depending on the product. But the dispute has gone beyond threats. Following EU moves to impose five-year tariffs of up to 49. 7% on Chinese polyester imports, Chinese textile producers petitioned Beijing to take the EU anti-dumping ruling to the World Trade Organization. If that is approved, it would be the first case independently filed by China to the WTO. But with MES, China could be left waiting at the door.
After imports of Chinese textiles and apparel jumped 29% in January, the Bush Administration said it would begin monitoring textile imports to see if reimposing quota was justified. In response, China said it did not plan to change tack.