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USDA Report on Chinese Cotton: Textiles, Imports, and Xinjiang

China is the world’s largest textile manufacturer and the largest cotton consumer, but changes in China’s economy are reshaping the geography of its cotton-textile sector.

A report issued today by ERS, Chinese Cotton: Textiles, Imports, and Xinjiang, reviews the economic, geographic, and policy factors reshaping the industry and influencing the global trade of cotton and textile products. The study also examines data on Chinese companies applying for a share of China’s cotton import quota to gain insight about the demand for imported cotton.

Here are a few key findings from the report:

  • China became the world’s largest producer, consumer, and importer of cotton soon after joining the World Trade Organization (WTO) in 2001. Despite adopting a tariff-rate quota (TRQ) system for cotton imports and issuing supplemental quotas in most years, the large number of cotton goods manufacturers that request shares of the quota suggests demand for imported cotton exceeds the quota.
  • While the TRQ was intended to protect China’s cotton farmers, many farmers abandoned the labor-intensive crop as wages rose rapidly in many other industries and other crops produced higher returns.
  • China’s role as a cotton importer appears to have peaked, while other countries are increasing their share of imports. USDA baseline projections suggest that by 2030 Vietnam, Pakistan, Indonesia, Bangladesh, and Turkey will together account for 47 percent of the world’s cotton imports while China will only account for 24 percent.

To learn more, please refer to the full report.

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