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China resumed export license for textile on June 19, only six months after it canceled export quota,aiming to change the increase mode of the industry and stabilize the export order.

According to the newly issued temporary regulations, the Ministry of Commerce will attribute licenses on the textile products that the United States and the European Union had restricted according to the export volume of the companies.

Zhao Yumin, an expert with China Academy of International Trade and Economic Cooperation under the ministry, said the regulations will dispel the misgivings both at home and abroad on the textile export of China and thus factors of uncertainties can be avoided.

In the past 20-odd years, China used the license system as there was export quota among international trade. On Jan. 1, 2005,the quota was canceled and Chinese companies began to enjoy the benefit of free trade.

However, the United States and the EU took restrictive measures on textile products from China based on Article 242, resulting in concerned conditions and procedures for the restriction.

On the early hours Saturday in Shanghai, after ten-hour-long close-door talks between Chinese Commerce Minister Bo Xilai and visiting EU Trade Commissioner Peter Mandelson, the European Union has agreed to stop investigations on ten categories of textile products from China. China and EU also reached consensus on the annual growth of exports to the European market for the ten lines of Chinese products from June 11, 2005 to the end of 2007. With an agreed base quantity, the annual growth is set to be limited between 8 percent and 12.5 percent during the period.

The prospect of China-US negotiations remains unclear yet.

The regulations, which will be taken into effect from July 20, said when companies apply for the licenses, the number of the licenses that the ministry will give will depend on their performance in the previous 12 months. The performance before and after the quota was canceled on Jan. 1, 2005, accounts for thirty and seventy percent respectively.

Zhao said the government has taken into account the performance after the quota was canceled so that the phenomenon of transferring or trading of licenses should not occur.

At the same time, the licenses was attributed not just according to the quantity that the company exports, but also the trade volume.

This policy will encourage companies to export high-value-added products Zhao said.

Zhang Xi'an, vice secretary-general of the China Textile Import and Export Chamber, said the regulations will guide the companies to produce more high-value-added products and to set stable ties with foreign counterparts.

At the same time, the regulations have also created a stable environment for the companies, he said.

However, Zhang Yansheng, director of the Foreign Economic Institute of the State Development and Reform Commission, said the regulations cannot solve all the problems in China's textile export.

The policy that the government makes should be advanced, he said.

As China's production ability of textile industry is very strong, more friction will occur, he predicted.

What's more, restrictive measures is only one kind of the trade protectionism, China's textile export may face anti-dumping or other protective measures, so China will be aware of the complicated situation in the textile exports.