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Contribution of cotton to economy unparalleled – Experts
01
Dec '09
The latest survey shows that trade liberalization has not provided Chinese farmers with a more stable development means of livelihood; on the contrary, in just a few years, due to strong impact of imported cotton, Chinese farmers have lost half of their market opportunities.

The report "Doha Round negotiations restart in 2009 - China's cotton industry is still struggling" prepared by the State Department of Agriculture Rural Economic Research Center, Xinjiang Normal University, Oxfam, and other units was released on November 27.

Researchers conducted a survey in seven cotton-producing provinces and autonomous regions. The survey reveals that China's joining of the WTO and the resultant market opening-up, resulted in rapid growth of China's cotton imports.

China's cotton imports in 2008 were 19.5 times of 2001 and cotton industry's dependence on foreign raw materials increased. Imported cotton accounted for 20.2 percent of China's total consumption from 2002 to 2007, with the maximum at 31.7 percent.

At the same time, consumption of cotton in domestic markets fell from 99 percent to 77.6 percent; the lowest was down to 64.9 percent. As the world's largest cotton consuming country, China's total cotton import and export value reached US $18.13 billion in 2008.

The survey also shows that volatility of China's annual purchase price was more than 12 percent from 2002 to 2008, after China's accession to the WTO. Volatile prices brought virtual changes in cotton acreage and production, while uncertainty of cotton prices and production costs led to overall decline in earnings of cotton farmers.

The report says that cotton plays an important role in China's national economy, urban and rural employment, rural development and poverty reduction and its role cannot be replaced. In 2008, cotton textile and cotton apparel exports accounted for 37.4 percent of total exports of textile industry, the largest net foreign exchange earning sector in China.

Statistics show that cotton industry is a labor-intensive industry and it can help ease employment pressure across the whole value chain of cotton processing. The cotton agriculture sector provides over 100 million direct and indirect jobs.

In 2008, China's textile industry absorbed 20 million employees. In addition, Xinjiang and other major cotton producing provinces provide millions of seasonal picking jobs each year, which are very important to poverty-stricken areas in Northwest.

Fibre2fashion News Desk - China

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