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China’s Role in World Cotton and Textile Markets

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

Abstract

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.

Suggested Citation

  • MacDonald, Stephen & Pan, Suwen & Somwaru, Agapi & Tuan, Francis, 2004. "China’s Role in World Cotton and Textile Markets," Conference papers 331298, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
  • Handle: RePEc:ags:pugtwp:331298
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    Cited by:

    1. Badri Narayanan, G. & Khorana, Sangeetha, 2014. "Tariff escalation, export shares and economy-wide welfare: A computable general equilibrium approach," Economic Modelling, Elsevier, vol. 41(C), pages 109-118.
    2. Pan, Suwen & Welch, Mark & Mohanty, Samarendu & Fadiga, Mohamadou L., 2006. "Sino-U.S. and Sino-E.U. Textile Safeguard Agreements: Comparing the Effects to Free Market Conditions," 2006 Annual meeting, July 23-26, Long Beach, CA 21117, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Edmund Amann & Barry Lau & Frederick Nixson, 2009. "Did China Hurt the Textiles and Clothing Exports of Other Asian Economies, 1990-2005?," Oxford Development Studies, Taylor & Francis Journals, vol. 37(4), pages 333-362.
    4. Gulzar Ali & Zhaohua Li, 2016. "Analyzing the role of Imports in Economic Growth of Pakistan; Evidence from ARDL Bound Testing Approach," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(9), pages 19-37, September.
    5. Xia, Doris Yan, 2005. "Impacts of Multi-Fiber Arrangement Removal on Global Textile and Cotton Trade," 2005 Annual meeting, July 24-27, Providence, RI 19453, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Narayanan G, Badri & Khorana, Sangeeta, 2011. "Does tariff escalation affect export shares: The case of cotton and coffee in global trade," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103946, Agricultural and Applied Economics Association.
    7. Gebreeyesus M., 2013. "The End of the Multifibre Arrangement (MFA) and the Heterogeneous Performance of Quota-Constrained Countries," MERIT Working Papers 2013-035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Muhammad, Andrew & McPhail, Lihong Lu & Kiawu, James, 2012. "Do U.S. Cotton Subsidies Affect Competing Exporters? An Analysis of Import Demand in China," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(2), pages 1-15, May.
    9. Suwen Pan & Mark Welch & Samarendu Mohanty & Xiurong He, 2007. "Distortions of Sino‐US and Sino‐EU Safeguard Agreements: Effects on World Textile Markets," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(4), pages 78-88, July.
    10. Muhammad, Andrew & McPhail, Lihong Lu & Kiawu, James, 2011. "Competition between the U.S. and West Africa in International Cotton Trade: A Focus on Import Demand in China," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103210, Agricultural and Applied Economics Association.

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