China deal defended

Press, 29 April 1981, Page 3

China deal defended

The debate over the Wool Board’s recent deal with one of the biggest cotton mills in China continued at the conference of the International Wool Textile Organisation in Christchurch yesterday, when the chairman of the board, Mr J. D. Mcllraith, sought to allay fears expressed by the president of the organisation,

Mr S. S. Nevile, in an address at the opening of the conference. Under-the agreement, the mill will buy at least 850 tonnes .of New Zealand scoured wool annually for_ seven years, and the board will help the mill buy equipment for a new woollen mill. Mr Nevile, of Victoria, said in his adddress that many people believed there should be free and fair trade and free and equal access to raw wool supplies, and they had been extremely disturbed by the Wool Board’s offer of financial aid. In response to Mr Nevile’s assertions, Mr Mcllraith quoted from an article in the “Peoples Daily” in Peking to support his contention that there was considerable scope for textile production for consumption inside China itself. . „ The involvement of the board in specific industrial developments within China was “regrettably somewhat misunderstood,” Mr Mcllraith told the conference.

“Obviously the details of commercial arrangements we have negotiated are not matters for public disclosure. However, our involvement

within this market is not designed ; to provide advantages” for Chinese manufactured exports over those of our traditional and obviously important customers. “Our efforts within China have been carefully targeted towards increasing the volume of wool consumed on the domestic market.” To illustrate this point, Mr Mcllraith then referred to an article in the “Peoples Daily” of February 20 this year. It said that a rise in living standards had caused an increase in demand for textile products, especially quality products. Last year China had produced almost 100 M metres of ■woollen fabric, an increase of 80 per cent over 1970, while production of handknitting yarn had increased 1.5 times over 1970, to more than 50,000 tons in 1980. The article said that products scarce in China were hand knitting yarn, pure wool blankets, wool sweaters (knitwear), wool scarves,and pure wool gabardine. After also quoting several products that were in short supply on the international market, the Chinese writer

: went on to say that although . there were shortages both in ■ China and abroad, the export [ of woollen fabrics had been r controlled at about 10 per cent to 15 per cent of the total production to meet the demand of the domestic marI ket. : "In the light of these facts, i it would be negligent of the board not to seek to capi- ■ talise upon such opportunii ties for new and genuinely. > additional markets for our ; wool at a time when our production has risen so ' dramatically,” said Mr Mcll- - raith. > “The contractual arrange- ! ment is no exception to our general strategy within - China. Both the supply and f financial arrangements have J been made in a commercial , fashion that reflects normal - market forces. They do not I involve a departure from j long-standing board policies, and this includes the question - of wool supply. It is unfore tunate that speculation has e at times suggested others wise.” II But Mr Nevile was not il satisfied by Mr Mcllraith s t statement. He said after[l wards, that everybody was r just as much in the dark.