China's rapidly expanding export volume of bags and suitcases still has huge potential for further development, industry experts say.

According to the General Administration of Customs, China exported US$4.36 billion worth of bags and suitcases last year, an increase of 12.4 per cent compared with 2001.

The China Light Industrial Artcraft Import and Export Association attributed the growth to closer business relations with foreign partners after China's entry into the World Trade Organization (WTO) in December 2001, competitive prices due to cheap labour and the continued inflow of foreign investment into the suitcase industry, which has helped local producers update their technology and management skills.

As part of its WTO membership, China opened its domestic market wider to foreign commodities. Large quantities of high-quality bags and suitcases have poured into the country from foreign countries, while a large number of overseas suitcase producers have established offices in China.

The situation has created heavy pressure for domestic producers.

A market survey showed local demand for such products was stable.

China, which has rich labour and raw material resources, is capable of offering competitive prices.

However, it is still threatened by even lower prices offered by countries from Southeast Asia.

The slow development of the world economy, the effect of the Iraq War and increasing international trade protectionism are major factors which will impact on the exports of Chinese-made bags and suitcases, according to association experts.

Chinese bags and suitcases are prone to anti-dumping cases due to the large volume of exports and comparatively low prices.

The United States has already started anti-dumping investigations on five Chinese textile products including bags and suitcases with plastic textile covers.

China exported 128 million bags and suitcases to the United States in the first two months of this year, an increase of 75 per cent over 2002.

The big increase mainly came from a lifting of quotas by the United States for imported bags and suitcases.

There are about 7,370 enterprises producing bags and suitcases for export in China. Most of them are small enterprises.

But 44 of the total are large scale operations, each with annual exports exceeding US$10 million.

The creation of a famous brand, which is owned by a Chinese enterprise, is imperative for the future growth of the industry, an association representative said.

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