Cotton Import Quota System Has Become The Focus Of Controversy.

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After more than 20 years, the situation of the downstream cotton spinning industry has never been as severe as it is today.

"Today's cotton spinning industry is far more brutal than the international financial crisis in 2008. It is the most brutal year in nearly twenty or thirty years."

These two sentences are from the mouth of Ma Junkai, Deputy Secretary General of Dezhou Cotton Association, while the latter is Tian Shaoqing, the chairman of Tianrun textile company of Xiajin County, Dezhou, who is working hard in the cotton spinning industry.

Although the status is different, two of them said that the domestic cotton textile industry is facing the most severe test in the past twenty or thirty years.

There are many reasons for the plight of the cotton spinning industry, of which cotton import quota system has become the focus of controversy.

"The cotton import quota system has caused great differences between domestic and foreign cotton prices, seriously weakened the competitiveness of domestic cotton spinning enterprises, and also caused unfair competition among domestic cotton spinning enterprises.

This year, the whole country has issued 1 million 894 thousand tons of import quotas, which is equivalent to about 8000000000 yuan subsidy to the enterprises that get the quota, and how to play the small and medium-sized enterprises? "The head of a cotton textile enterprise in Dezhou said to the Economic Herald reporter.

Ma Junkai believes that as the protection of the interests of domestic cotton farmers, cotton import quota system has its necessity, but its disadvantages are also obvious.

Textile enterprises shutting down to reproduce

On the 21 day, from the Xiajin toll station of Qingyin Expressway to the South 500 meters, a textile mill Jinlong Textile Co., Ltd. entered the field of vision.

Something strange is that the inside of the textile mill is very cold outside.

The doorman told reporters that the production was stopped here.

Earlier, Xiajin cotton textile industry has confirmed to reporters that Jinlong textile has broken down for several months due to the chain break.

Xiajin's cotton spinning business is not a Jinlong textile company.

In the southern town of the county, Ruichang Textile Co., Ltd. was a local tax payer, but the company also collapsed in the near future. The company's plant and equipment has been leased by another textile enterprise in Xiajin county.

As a major county of cotton spinning, Xiajin has more than 140 textile enterprises, with 2 million 300 thousand spinning spindles and 45% of Dezhou.

During the impact of the international financial crisis in 2008, some cotton spinning enterprises failed, and now they are reappearing.

On the 21 day, the reporter came to the West Town Industrial Park of song Lou, Xiajin county. This is the most densely populated area in Xiajin County, where dozens of textile enterprises are located.

At noon, the staff of the spinning enterprises in a small restaurant were chatting with the sky, but when they talked about the operation of the enterprises, everyone would frown.

According to Tian Shaoqing, the large-scale development of cotton textile industry in Xiajin county began in 2002 and is now quite large.

As a livelihood industry, the industry has attracted more than 30 thousand local employment.

But at present, the local cotton textile industry is facing a "shuffle".

Ma Junkai analysis said that at present, the cotton textile enterprises in Dezhou and its surrounding areas have a starting rate of about 60%, and the whole market is facing a process of survival of the fittest.

In particular, some small and medium-sized enterprises, because they can not get the quotas of imported cotton and lack competitiveness, are facing the outcome of withdrawing from the market.

"The market is in a slump, especially in some small and medium sized cotton spinning enterprises. They are faced with bottlenecks in terms of product quality, equipment technology, management and employment.

Who can break through these bottlenecks can usher in a new development field, otherwise, it will be difficult to overcome the current difficulties.

Tian Shaoqing said that as one of the largest textile enterprises in Xiajin County, Tianrun textile is increasing investment in products, technology pformation and management, and strives to win in the future competition.

"How to compete with others?"

There are multiple reasons for the difficulties faced by domestic cotton spinning enterprises at present.

Xia Zhilin, President of the Shandong Textile Industry Association, analyzed the reporter of the guide. These reasons include: cotton prices have fallen sharply, leading to a significant reduction in raw materials for cotton mills in the early stage of storage, a downturn in the downstream market, and a lack of demand at home and abroad.

But one of them has to emphasize the huge difference between domestic and foreign cotton prices.

"Cotton used by Chinese textile companies is the most expensive in the world."

Tian Lianchen, general manager of Xiajin run Tong Textile, told reporters.

Reporters noted that on the 23 day, foreign cotton of the same specifications, after the import of quasi tax, the outer cotton was lower than the cotton within nearly 4000 yuan / ton.

"The textile industry is now a global competition.

Domestic and foreign cotton prices (per ton) are one thousand or two thousand yuan, enterprises can make up for the potential through internal tap, but domestic cotton prices are nearly 4000 yuan / ton higher than foreign countries, and our cotton prices will soon catch up with the price of cotton yarn. How can we compete with others? "Tian Lianchen said.

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The change of competitiveness of cotton textile industry at home and abroad is making international cotton yarn enter the domestic market in large numbers, while domestic cotton spinning enterprises are frustrated in foreign markets.

According to the latest statistics of the General Administration of customs, in June this year, China imported 108 thousand and 300 tons of cotton yarn, though

13.33%, but 1.2 times higher than the same period last year, net imports of 69 thousand and 600 tons, a decrease of 12.35%, but an increase of 244.46% over the same period last year.

From 1 to June this year, a total of 661 thousand and 300 tons of imported cotton yarn were imported, an increase of 63.24% over the same period last year, and the total export of cotton yarn was only 225 thousand and 500 tons, a decrease of 2.97% over the same period last year.

Tian Shaoqing introduced that at present, the price of cotton yarn produced in India, Pakistan and other places is only about 22 thousand yuan per ton, and the domestic production cost is over 27 thousand yuan / ton.

In addition, the price of new cotton harvest and storage has increased by 20 thousand and 400 / ton compared with last year, which may further increase the cost gap between domestic and foreign cotton spinning enterprises.

"Open secret"

Domestic cotton prices are much higher than foreign countries, attributable to the cotton import quota system.

"Although the price of foreign cotton is far lower than that of China, the domestic cotton textile enterprises must first get quotas if they want to import foreign cotton, so that foreign cotton will not enter the domestic market in large quantities."

Ma Junkai said.

He believes that "the cotton import quota system aims to protect the domestic cotton industry, and indeed has made a great contribution to the interests of domestic cotton farmers.

However, its disadvantages are also obvious.

In addition to the huge differences between domestic and foreign cotton prices, this system has also caused unfair competition among domestic cotton spinning enterprises, especially in some small and medium sized cotton spinning enterprises.

Tian Lianchen gave the reporter an account: at present, the price difference between domestic and foreign cotton is 4000 yuan / ton, when the peak reached 5000 yuan / ton.

If an enterprise can get a quota of 10 thousand tons, it will be equivalent to a subsidy of about 40 million yuan for this enterprise.

The quota of 1 million 894 thousand tons has been issued this year, which is equivalent to about 8 billion yuan subsidy from the state.

But the 8 billion yuan usually has little to do with small and medium-sized cotton spinning enterprises.

The reporter understands, Xiajin county more than 140 cotton spinning enterprises, can get the quota of a handful.

If the import quota is not available, the quality and quantity of domestic cotton will not meet the requirements. Some cotton spinning enterprises can only seek to purchase import quotas from other channels.

Reporters from several cotton textile enterprises in Dezhou have been confirmed that the pfer and circulation of cotton import quotas is already an "open secret" in the industry.

"Most of the small and medium-sized enterprises that really do cotton spinning can not get quotas."

The head of a cotton textile enterprise in Dezhou told reporters: "because of the big gap between domestic and foreign cotton prices this year, the price of the quota has been up to 3500 yuan / ton, which is still around 3200 yuan / ton.

Some enterprises with backgrounds will not have to do anything after they get the quota, they will get the money by tens of millions or billions of yuan.

Dilemma solving

Because of the drawbacks of the cotton import quota system, some cotton spinning enterprises, especially small and medium sized cotton spinning enterprises, have been calling for the abolition of quotas.

But Ma Junkai believes that the purpose of the quota system is to protect the domestic cotton industry.

If the quota is abolished, foreign low-cost cotton may enter the domestic market in large numbers, thus affecting domestic cotton prices, and the enthusiasm of domestic cotton farmers will be lower.

Reporters learned that the China Cotton Textile Industry Association has conducted research in Dezhou area to find new ways to protect the interests of cotton farmers and balance the interests of cotton spinning enterprises. The key scheme is to abolish import quotas and direct subsidies to cotton farmers.

It is understood that there is no subsidy for farmers to grow cotton at present, and only a small amount of subsidies for cottonseed purchase.

Ma Junkai also calculated an account. On the basis of current cotton prices, he subsidized cotton growers to 130 yuan to 150 yuan per mu, or made cotton farmers' enthusiasm for growing cotton no longer slide.

The head of a cotton textile enterprise in Dezhou put forward another proposal: if the import quota is not abolished, the import quotas can be distributed to the central storage cotton completely, and then stored and sold by the central storage cotton.

In this way, all cotton spinning enterprises in China are standing on the same starting line, and they can avoid the phenomenon of power rent seeking and other corruption in the process of allocation of import quotas.

In addition, reporters in the interview also learned that, in addition to domestic cotton prices too high, market demand and other factors, many cotton spinning enterprises are facing enormous difficulties in financing, many banks have tightened credit to cotton spinning enterprises, so that the whole industry situation worse.

Therefore, many cotton textile enterprises appealed to the state to be able to pay taxes in the period of industry perplexity.

We should give appropriate support in other areas to help enterprises tide over the current difficulties.