TOH HAN SHIH

The re-election of George W. Bush to the presidency of the United States has generally gone down well with Hong Kong's business community, which believes it will lead to freer trade with China, despite the fact that on the day of victory his administration threatened to impose import quotas on the mainland textile trade.

"Now that Bush doesn't need to court votes, it's possible his administration will be more likely to support free trade and not re-impose textile quotas on China," said Peter Shay, managing director of MMG Asia, an investment banking and consulting firm.

The US government has 90 days to decide whether to impose one-year "safeguard" quotas on five areas of Chinese-made garments - synthetic fibre trousers, cotton knit shirts, synthetic fibre knit shirts, woven shirts and underwear.

"Compared to John Kerry, it's better that Bush was re-elected in terms of trade with China. With the elections out of the way, Bush will get back to normal trading relations with China. It won't be as bad as the past six months, which was really bad in terms of trade rhetoric," said Bruce Rockowitz, president of the trading arm of Li & Fung.

Before the election, Mr Bush had been pushing hard for revaluation of the yuan to save US jobs and reduce the US trade deficit with China, said Surendar Kirpalani, a trader. "But now, Bush will reduce the intensity of his push, although outwardly he will continue his policy because he can't be seen to U-turn after being re-elected."

"Kerry would have been more protectionist on trade," said Leora Blumberg, international trade adviser of Heller Ehrman White & McAuliffe, a US law firm. "Bush is big on entering free trade pacts with other countries and was criticised by Kerry for that."

Mr Bush would push China to protect intellectual property rights and open its various industries to US companies, she predicted.

China would still face increasing anti-dumping action by the US and other countries, said Edmund Sim, a partner at US law firm White & Case. "This is a natural trend, because China is increasing its share of the global market. So other countries will use anti-dumping to protect their industries."

China has been the biggest recipient of anti-dumping measures, which doubled from 20 in 1999 to 40 last year, according to the World Trade Organisation.

WTO members are also entitled to impose one-year safeguard quotas on Chinese garments.

Lat month, the US government agreed to consider safeguard quotas on imported Chinese-made socks and cotton trousers.

"Of course politics was involved," said BNP Paribas Peregrine analyst Mohan Singh. "It was during the presidential election. If you're lobbying on behalf of the textile industry in the US, it's a perfect time to do it."

However, US industry is not unanimous in urging restrictions.

Kevin Burke, president of the American Apparel and Footwear Association, was disappointed with the government for agreeing to consider more quotas on Chinese apparel on November 3.

Mr Burke criticised the US government for considering quotas on these items, when China's exports to the US were still small.

In the first eight months, Chinese imports accounted for only 0.8 per cent of cotton knit shirts, 5.7 per cent of woven shirts, 2.2 per cent of underwear, 3.7 per cent of synthetic knit shirts and 4.5 per cent of man-made fibre trousers, according to US government data.