China and the European Union last weekend worked out a deal that limits Chinese exports of textiles and heads off a dangerous trade confrontation between them. Both sides, as well as Beijing's other trade partners, are hailing the arrangement as a "win-win" solution to trade disputes. Ultimately, however, eliminating trade friction depends on developed economies preparing better for the inevitable surge in Chinese exports across a range of traditional industries. That is a question of political will that most governments have proven slow to exert amid the moves toward more and freer trade.

Chinese exports have exploded in the first five months of 2005, expanding 33 percent and yielding a $30 billion surplus for China, a sharp contrast to the $9.2 billion deficit recorded in 2004. The EU was China's largest trade partner during that time, with trade volume rising just under 25 percent to reach $81.8 billion.

Textiles play an increasing role in that trade. China is the world's largest clothing exporter, shipping more than $97 billion worth of textiles and apparel last year. Yet Chinese textile exports have surged since Jan. 1, when the existing system of global quotas was abolished. According to the Chinese Customs Bureau, China's clothing exports climbed 17.2 percent in the first five months of 2005, to reach $24.4 billion. Shipments of yarn and knitted items leaped nearly 25 percent to $15.5 billion.