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China'S Role In World Cotton And Textile Markets

  • MacDonald, Stephen
  • Pan, Suwen
  • Somwaru, Agapi
  • Tuan, Francis C.

The growth of China's textile industry has been one of the dominant factors shaping world cotton and textile markets in recent years. Since China's accession to the World Trade Organization (WTO) in December 2001, China's textile and apparel (T&A) exports have grown by more than 40 percent and China's cotton consumption has grown by 34 percent. By the end of 2003, China had nearly doubled its share of world T&A exports in less than a decade, to about 21 percent. T&A exports from China and other developing countries are constrained by quotas originally implemented by developed countries under the Multifibre Arrangement (MFA). Under the Uruguay Round's Agreement on Textiles and Clothing (ATC), these quotas have been gradually phased-out since 1995, with complete removal scheduled for the end of 2004. This study incorporates alternatives of the impact of the ATC's implementation in an analysis of China's textile industry, and its impact in turn on China's cotton sector. The study finds that, assuming equilibrium levels of income and exchange rates, alternative ATC scenarios are expected to increase China's net apparel exports, textile production, cotton consumption, cotton production, and cotton imports. This study also finds that these results are somewhat sensitive to estimates of expected efficiency gains around the world.

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File URL: http://purl.umn.edu/20054
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2004 Annual meeting, August 1-4, Denver, CO with number 20054.

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Date of creation: 2004
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Handle: RePEc:ags:aaea04:20054
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  1. Diao, Xinshen & Somwaru, Agapi, 2000. "An Inquiry on General Equilibrium Effects of MERCOSUR--An Intertemporal World Model," Journal of Policy Modeling, Elsevier, vol. 22(5), pages 557-588, September.
  2. Seale, James & Regmi, Anita & Bernstein, Jason, 2003. "International Evidence on Food Consumption Patterns," Technical Bulletins 184321, United States Department of Agriculture, Economic Research Service.
  3. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  4. Cheng Fang & Bruce A. Babcock, 2003. "China's Cotton Policy and the Impact of China's WTO Accession and Bt Cotton Adoption on the Chinese and U.S. Cotton Sectors," Food and Agricultural Policy Research Institute (FAPRI) Publications 03-wp322, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
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