Who is to deal with US cotton dumping?
Source: Fibre2fashion Date: 2006-11-23
From 2001 to July this year, China has imported a large quantity of cotton, of which, US cotton accounted for more than half of the total import.
Although this has solved the material shortage for domestic textile enterprises, the swarming of large imported cotton also squeezed the local cotton market. The US cotton has been taking over cities and territories everywhere by its advantage of low price. Therefore the cotton acreage in middle and lower reaches of the Yangtze River and Yellow River Basin has dwindled in recent years.
Since last year, China's main cotton enterprises have suffered great losses due to large imported cotton.
When the US has continued to carry out stringent restrictions on Chinese textile products and launched anti-dumping investigations over Chinese goods, they also have kept dumping a lot of cotton into China.
This is in stark contrast that Western countries show a deep-rooted mentality of trade protectionism, while China exposes the weaknesses in dealing with anti-dumping cases.
From 1995, China has become the most targeted aim of anti-dumping investigations in 11successive years, where in 2005, alone China encountered 51 cases of overseas anti-dumping investigations, involving a total amount of US $1.79 billion.
In 2005, China only launched 6 anti-dumping investigations on imported products. There were even fewer anti-dumpling investigations on foreign agricultural sectors by the State.
Though China is a big agricultural country, it is not as strong, yet. China has quite a lot of agricultural production and processing operations with small-scale, low added value and low-tech. Many enterprises and operations are uncompetitive due to lack of modern production modes and management.
In facing anti-dumping investigations abroad, China’s farmers are very difficult to respond, because China’s farmers and agricultural operations are scattered.
This natural weakness resulted in a distressing situation: In the face of foreign anti-dumping investigations, China’s farmers are often silent, have no choice but to quietly endure huge losses as the result.
Oversees agricultural exports to China have brought a great economic impact to some areas, it is related to the livelihood of millions and even hundreds of millions of farmers as well as local social stability.
If not promptly respond or initiate anti-dumping investigations on foreign goods, Chinese peasants’ living space would be gradually reduced by foreign products.
Cotton is a typical example; the US is dumping large quantities of cotton into China. It has seriously damaged the interests of local cotton growers and domestic cotton business.
More important is that once the domestic cotton production space being eaten completely, foreign cotton will initiatively take the opportunity to raise cotton price, thus bringing a huge threat to China's textile industry.
Some insiders from China's textile industry are deeply worried about the large-scale entry of foreign cotton, they point out that when Sino-EU and Sino-US textile trade frictions are frequent and continued, if the domestic cotton industry is breakdown, the neck of China’s textile materials can easily be choked by foreign countries. By then China’s textiles cannot be exported, and the US cotton would no longer be a synonym for high quality and low-cost.
China should help farmers to establish farmers trade associations as soon as possible and to initiate anti-dumping investigations in name of trade associations.
This will not only safeguard the interests of farmers, but also for China to win more chips in trade negotiations with the US and Europe.
