Five years of hard work and progress – the development achievements of the cotton industry since the 18th National Congress
Since the 18th National Congress of the Communist Party of China, my country’s economy has maintained medium-to-high growth, with consumption becoming the main driving force. The Chinese government has adapted to and led the new normal of economic development. We will innovate macro-control ideas and methods and promote supply-side structural reform. The cotton industry has seized opportunities, based on innovation, and actively explored aspects such as changing methods, adjusting structures, and promoting reforms. The industry has shown a stable and positive situation: prices have stabilized, inventories have decreased, production has been optimized, quality has improved, and demand has rebounded.
2013 is the year after the temporary cotton purchase and storage policy. Three years of purchase and storage have stabilized the market and ensured the income of cotton farmers in the sluggish environment. However, at the same time, inventory pressure has increased sharply, and problems such as weakened market vitality have become increasingly prominent. In order to give full play to the role of the market, protect the interests of cotton farmers, and promote the coordinated development of the industrial chain, a cotton target price reform pilot was launched in Xinjiang from 2014 to 2016. After three years of practice, the cotton production layout has been adjusted, cotton quality and competitiveness have improved, and the market With increased vitality, we began to deepen the cotton target price reform in Xinjiang in 2017. At the same time, the state has adjusted its reserve cotton rotation policy, shifted the main task of reserve cotton to “destocking”, and gradually reduced reserve cotton stocks to a reasonable level. After several years of practical exploration, cotton industry policies have gradually moved toward institutionalization and normalization, playing an important role in stabilizing cotton production and promoting the sustainable and healthy development of the textile industry.
1. Cotton prices return to the market
Since the Xinjiang cotton target price reform pilot, the state no longer directly intervenes in market prices, and prices are decoupled from government subsidies. Domestic cotton prices are completely formed by market supply and demand. The market awareness of cotton-related entities has increased, and the industry The relationship between upstream and downstream has been gradually straightened out, and the price difference between domestic and foreign cotton has narrowed, promoting the healthy development of the textile industry. The cotton target price reform has explored a new way in which cotton prices are determined by market supply and demand and are decoupled from government subsidies.
2. Optimization and adjustment of industrial layout
Through the guidance and driving role of policies, my country’s cotton production has further concentrated in Xinjiang’s advantageous production areas. The proportion of Xinjiang’s output has increased from 40% five years ago to 70-80%. Cotton production Comparative advantages have been fully exerted; at the same time, Xinjiang’s cotton planting structure has been adjusted, and sub-optimal cotton areas have withdrawn from cotton production, realizing a shift in the planting structure to good adjustment, smoothing and optimization.
In order to further enhance the supply guarantee capability of important agricultural products such as grain and cotton, the State Council issued the “Guiding Opinions on Establishing Grain Production Functional Zones and Important Agricultural Products Production Protection Areas” in April 2017. Among them, with Xinjiang as the focus and the main producing areas of the Yellow River Basin and Yangtze River Basin as supplements, 35 million acres of cotton production protection zones have been designated.
3. The effect of destocking is obvious
After the temporary purchase and storage, my country’s cotton reserve inventory exceeds 11 million tons, equivalent to about one and a half years of domestic consumption, and the inventory pressure is huge. In order to promote “destocking”, relevant departments decided to gradually and orderly digest cotton reserves and adjust the reserve scale to a reasonable level. The reserve cotton regulation policy has changed from a temporary initiative to a institutionalized and normalized one. It has clarified the principles of reserve cotton digestion that are conducive to promoting the healthy development of the industry, guiding the smooth operation of the market, reducing finances, and improving the reserve control mechanism. At the same time, it has determined the regular rotation of cotton reserves. Specific methods such as dynamically determining the minimum price based on market trends have played a positive role in stabilizing market expectations and digesting the inventory scale. After two years of deployment, the size of the cotton reserve has dropped to about 5 million tons, and the reserve size has become reasonable.
4. Cotton quality has steadily improved
With the establishment of a market pricing mechanism based on market supply and demand, high quality and good prices have been further reflected, and the quality awareness of market entities has been significantly enhanced. All links in the industrial chain have paid more attention to quality control, and cotton quality Steady improvement, more in line with the needs of textile enterprises. According to statistics, in 2016, 93% of Xinjiang cotton was 28 mm and above, 18 percentage points higher than before the reform. The quality of some cotton produced by the Xinjiang Production and Construction Corps has reached advanced levels, and the competitiveness of cotton has significantly improved.
5. Textile demand picks up
Affected by various factors such as the economic environment and the large price difference between domestic and foreign cotton, cotton consumption gradually decreased during the temporary purchase and storage period, recovered during the target price reform pilot period, and has now increased again Return 8 milliontons or more. The cost of cotton used by textile enterprises has been reduced, their competitiveness has been improved, and the efficiency of the entire industry has improved. This is mainly reflected in: yarn, cloth and other output showing a recovery trend, and product prices rising; textile and clothing exports have stabilized, and the decline in exports has slowed down. Xinjiang’s textile industry has developed rapidly. From 2014 to 2016, the fixed asset investment in Xinjiang’s textile industry reached 90 billion yuan, exceeding the total investment from 1978 to 2013.
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