Advancing steadily in China

摘要

In September 1999, China launched the reform of its cotton market. So far, the process has been steady and fruitful. As prices in the world cotton market started recovering early last year, at least 20 state-run cotton mills and textile plants experienced a shortage in cotton stock. The shortage was immediately felt as the procurement price for new cotton rose quickly from 380 RMB yuan per dan (1 dan = 50 kg) in 1999 to 390 RMB yuan per dan in January and February 2000 and in some areas even to 420RMB yuan per dan. The market price in Shaanxi province, the main location for state-run textile mills, rose from 8,500 RMB yuan per ton in early 2000 to 13,600 RMB yuan per ton in June. The procurement price in Sichuan province rose from 9,200 RMB yuanper ton in 1999 to 11,000 yuan per ton in 2000. There are several reasons for the shortage of cotton stock and the rise of both procurement and market price. They are: 1) Insufficient state stock cotton to meet the rising need of the textile mills; 2) cotton enterprises keeping cotton on hand to sell at a higher price; (3) inability of supplements to demands and the price of cotton rising steadily since the beginning of the year; and 4) influences of government policy.