Growth in exports of 10 categories of Chinese textiles to the European Union will be limited to up to 12.5 per cent a year until the end of 2007, according to an deal signed by China and EU.
The limits, ranging from 8 per cent to 12.5 per cent a year, would apply to key textiles including T-shirts and flax yarn, the European Union said in a statement.
For other categories of textiles, the European Union said it would exercise restraint on its right to limit imports under the terms of China's entry to the World Trade Organisation.
The new textile export deal was hammered out after hours of talks between Bo and EU Trade Commissioner Peter Mandelson in Shanghai late on Friday, averting the imposition of quotas that could have soured ties.
Tensions had been running high for months between China and the European Union over this year's explosive rise in Chinese textile exports. The European Union had feared the leap in exports threatened its garment industry and jobs.
Under World Trade Organization terms, member countries can limit growth in imports from China to 7.5 per cent per year should the imports prove disruptive.