Cotton is a major agricultural product in China, with cotton farming and processing involving some 300 million cotton farmers and closely linked to 13 million textile workers. The industry would be larger if the printing and garment industries were also included.

China's production of cotton has a strong impact on the price of cotton on the world market. Since China has entered the World Trade Organization (WTO), the country will continue holding its position as a large cotton and textile producer and major garment consumer and exporter, said Mao Shuchun, a well-known researcher of cotton science and technology.

China now faces great competition from the United States, Australia and Uzbekstan in sales of raw cotton.

The United States is the largest cotton trader in the world. The high quality and many varieties of cotton, make US cotton superior to Chinese cotton. However, US cotton contains more impurities due to harvesting by machines.

Chinese cotton is grown, harvested, dried, packed and stored by individual families, resulting in higher costs and quality problems, he said.

On the cotton yarn market, competition mainly comes from Pakistan, India and Bangladesh. In those countries, the labour costs are lower than in China.

Japan and the Republic of Korea,which use advanced textile machinery and high technology procedures for combed yarn, are rivals for China on the cotton cloth market.

Many options could be used to deal with the situation after China's WTO entry, however, emphasis should be placed on the following aspects, he said.

Varieties should be recommended to cotton growers, and quality standards and areas for cotton growing must be adjusted. Cotton must be divided into various grades.

A system to collect, study and develop information must be established. A State-level cotton science and technology association is necessary to provide various services to cotton farmers and enterprises, experts proposed.

Large-scale cotton purchasing and processing enterprises must be set up. Prices of raw cotton must be linked with those on the world market. And costs of circulation must be reduced as much as possible.

The study of cotton diseases must be strengthened and new standards for quality and quarantine inspection should be made to guarantee the safety of the cotton-related economy.

According to official statistics, China's total cotton production exceeded 5 million tons last year, a 20 per cent increase over the previous year.

Experts predicted that the acreage for cotton growing might be reduced in 2002. "The reduction will be decided according to the price changes on both domestic and world markets from now to April before the sowing season," Mao said.

Experts also predicted the cotton price might go up slightly on the domestic market. The prediction was based on the market trend in the Xinjiang Uygur Autonomous Region, the largest cotton producing area in China.

About 15 million mu (1 million hectares) of land will be devoted to cotton growing this year in the region, 2 million mu (133,000 hectares) less than last year. The total production is expected to reach 1.5 million tons.

At present, cotton prices on the world market are low and prices on the domestic market have dropped to a lower level than costs. The possibility of cotton prices continuing to drop is small, experts said.

(China Daily February 27, 2002)