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The Chinese Government Spent 33 Billion Yuan To Store And Store Cotton To Guarantee The Stability Of The Cotton Industry.

2013/10/3 17:54:00 23

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Spend 33 Billion Yuan On Cotton And Textile Industry.

it is reported that Tianhong Textile Group, the largest textile manufacturer in China, has been shifting its production to Vietnam. Peng Bo reported that its stock price rose by 445% over a year ago. 
 > a href= "http://news.sjfzxm.com/news/list.aspx? Classid=101112107105" > cotton reserves < /a >: a terrible idea 
When the price is below the set level, the Chinese government purchases and stores domestic cotton. The purpose of the policy is to support the textile industry after the 2008 financial crisis inhibits export demand. P 
 a href= "http://news.sjfzxm.com/news/list.aspx? Classid=101112107108" > oversupply < /a > leads to much cheaper cotton than Chinese cotton. Reuters alerted to reduced profits, and companies such as rainbow went to import cotton, forcing the government to spend 33 billion yuan in the past two years to absorb excess cotton in the domestic market. In 2012 alone, the government seized 89% of domestic cotton (China's lint). 
 textile manufacturers are squeezed between expensive Chinese cotton prices and import restrictions. Since 2013, the government has set up quotas for domestic cotton imports to cotton factories in 3:1. 
 cotton stocks have made Chinese cotton mills very expensive, unlike Tianhong Group, most of which are small and medium-sized debt laden enterprises (SMEs). 
 import rules this year make textile manufacturing industry make money or even less. The manager of a textile company told the China Securities Journal: "the current business is very tiring. In addition to the rise in bank debt and labor costs, the biggest pressure comes from purchasing raw cotton. 
 farmers did not even get any benefit from the subsidy of < a href= "http://news.sjfzxm.com/news/list.aspx Classid=101112107108" > 330 < /a > 100 million yuan, because the government reserves the purchase of raw cotton instead of raw cotton, which means that the money goes into the hands of the florists. 
 this is probably why, since the launch of the policy, domestic cotton cultivation has been reduced by 6.4%. Reuters reported that the Chinese government may soon cancel its policy of purchasing and storing. However, the proposed alternative policy may be that the government abandons cotton reserves and allows subsidies to be paid to farmers, which will cause other risks. 
Less than P, the money given to farmers will not solve the distorting production enthusiasm and contribute to oversupply, because subsidies continue to encourage farmers to grow more cotton and exceed the demand of the global market. 
"P," "as long as China continues to subsidize cotton farmers, the world's cotton will easily be overproduced," Joe Nicosia, chief executive of Cotton Corp, the world's largest cotton trader, told Bloomberg last year. "Allenberg" 
 why can we continue to subsidize cotton farmers for several reasons? Chinese peasants are an important supporter of the Chinese Communist Party. In view of the permanent existence of the gap between the rich and the poor in urban and rural areas, there are more and more anger and complaints. Therefore, there are 600 million unruly peasants in China. Also, please note that most of the cotton farmers in Xinjiang, in Northwest China, are hard to control in the "a href=" http://news.sjfzxm.com/ "Muslim" /a area. 
 that is why the government has to continue to subsidize inefficient and often unprofitable labor intensive operations. Farms need better technology to improve production. However, it is difficult for farmers to get loans; they can't use their land or farm equipment as mortgage loans because, technically, their land belongs to the collective. For a master's reason, the government thinks that it is unwise to give 600 million people the right to land. 
 however, free funds and small business loans are not the same thing. Subsidies for farmers mean that they produce more cotton than the world needs. This is a problem for cotton farmers all over the world, not just in China.