Living with the Quota

Last March, when the U.S. slapped drastic new quotas on its imports of cotton textiles. Hong Kong's burgeoning textile industry suffered a severe case of the shudders. Among the hardest hit was C.C. (for Chen Che) Lee, 51, the shrewd, Shanghai-born entrepreneur who built Hong Kong's first postwar textile mill. As the Crown Colony's biggest producer of finished cotton garments. Lee had been selling up to a million dollars' worth of garments a month in the U.S. Lee had to do something fast or his profit margin would be wiped out.

He found a fellow sufferer in the venerable British trading firm of Jardine Matheson, whose three-year-old dyeing and finishing plant had been losing money steadily. Fortnight ago, using his own South China Textiles Co. as a base. Lee put together six smaller mills and the Jardine plant to form Textile Alliance Ltd. In tribute to Lee's managerial talents, proud Jardine became a junior partner in the new enterprise, gave C.C. the chief executive's chair. Says Lee, who is shooting to increase his exports to the Common Market: "The merger should increase our efficiency 10% to 15%. and by July of next year we expect to be making 10% on our investment."

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