China: Persisting in Reform and Innovation

China started the reform of its cotton market in the late 1990s. By 1999, the buying and selling prices were open and in 2001, the government opened the market fully. For China’s cotton industry, it is a grand project of reform and innovation. After 10 years, the ship is running smoothly. Cotton production has developed steadily; high-yield and disease-resistant varieties, and advanced cultivation techniques are in place; and the business model (production base plus professional cotton cooperatives plus leading enterprises) has helped the average yield reach 5.7 kg per hectare, up 20 percent from a decade ago. The reformation of the national quality inspection system has also achieved initial success.

The developing economic environment was significantly better in 2010 than in previous years. According to the National Bureau of Statistics, in the first quarter of 2010, the year-on-year growth of China’s gross domestic product was 11.9 percent–almost six percentage points higher than the previous year. Although hurt by the global financial crisis the textile industry remains hearty, vital and competitive. This year, nearly all indicators in the textile industry show positive momentum.

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However, we should remember that the main reason for the economic recovery was the government’s stimulating economic policy and huge liquidity in the market. The recovery of the world economy is still unstable.

As the largest cotton-producing and -consuming country, China would like to enhance its cooperation with the world and make efforts in four areas.

First: Adhere to the direction of market reform and speed innovation and development. At a new historical starting point, China’s cotton industry will continue to promote the marketization process. In the environment of integration in world textile trading, China’s textile industry can maintain its international competitiveness only if it fully utilizes both the domestic and international markets and creates opportunities that complement each other. The China Cotton Association will coordinate with appropriate government departments and work together with the insiders to strengthen research.

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Second: Change the development mode of the cotton industry and promote innovation and development. The 2008 financial crisis exposed the contradictions of long-term accumulation during the extensive development of China’s cotton and textile industries; however, it also strengthened the resolve of insiders to change the mode of development, speed up the integration process, and promote structural adjustment and industrial upgrading. Thousands of families in cotton farming households need to organize themselves to align with leading enterprises in order to realize the advantages of industrialization and increase their ability to resist adversity.

Third: Rely on science and technology, and support innovation and development. The national conditions of China indicate that cotton production has to develop by taking advantage of science and technology, thus improving yield and increasing the total output, in order to raise its core competitiveness. In order to achieve sustainable development, China’s distribution sector and textile industry must rely on innovation through independent research and development, speed up the technological transformation, improve labor productivity, and increase the use of technology and branding for economic growth.

Fourth: Continue to strengthen cooperation and communication, innovation and joint development. Today’s world is an open world. Pragmatic cooperation and the mutual benefits that result are the only choices for those countries striving to achieve sustainable development. When a crisis hits, we need to help each other, and when the crisis fades away, we need to strengthen cooperation even more.

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