Union leader sees textile meltdown in Europe

DAVOS, Switzerland (Reuters) - Europe's textile industry could be wiped out by a surge in imports from China, the head of the international textile workers union said on Wednesday.

Neil Kearney, general secretary of the International Textile, Garment and Leather Workers' Federation, said that textile imports into the European Union picked up sharply this year after the expiry of temporary quotas at the end of 2007.

Similar limits on Chinese textile imports to the United States expire at the end of this year.

"Just looking at Europe, the possibility of meltdown in the textile sector is very great, with the biggest impact of course being on countries like Romania and Bulgaria, the new member states," Kearney told Reuters.

While many accepted that textile manufacturing had no long-term future in Europe, Chinese exports also threaten the textile industry in other developing countries such as Bangladesh where the economy depends on the sector, he said.

In the first few weeks of this year European imports from China of some categories such as shirts, underwear and knitted goods had risen by 1,000 percent, although it would be two or three months before a clear picture emerged, Kearney said.

European textile producers have said they will watch the import data, and if justified, ask the European Commission to impose new restrictions on Chinese imports. That could trigger another row among EU countries, some of which favour more limits on imports from countries like China while others say such moves are protectionist.

CHINESE IMPEDIMENTS

But China's export potential could be held back by labor shortages, due not least to workers fleeing the tough conditions that allow factories based in China to undercut competitors abroad, he said in an interview during the annual meeting of the World Economic Forum.

Kearney's federation groups 217 organizations in 100 countries. China's state-controlled unions are not among them.

Besides labor shortages, some Chinese factories are suffering from energy and water shortages, prompting some companies to relocate plant to countries such as Cambodia.

There is anecdotal evidence companies are losing labor as their migrant workers return to the countryside, where living standards have been improving, because factory conditions are so bad, he said.

Kearney recalled one Taiwan-owned plant he visited last year near Shenzhen, where migrant workers were sleeping 16 to a dormitory on factory premises.

"It was a little bit like out of Dickens. They were really badly dressed, they looked unkempt, dirty and undernourished," he said.

Labor regulations are routinely flouted in China, with employees paid below the legal minimum wage, he said.

"The laws are not bad in general. They're just not implemented and then of course corruption is a problem as well," he said.

This was leading to increasing numbers of spontaneous strikes and walk-outs, threatening social stability and industrial output. He estimated the number of industrial strikes last year at 80,000.

"I think in the longer term the Chinese authorities will be forced to take action because there are huge numbers of strikes taking place which very rarely get reported," he said.

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(Editing by Ralph Boulton, additional reporting by William Schomberg)