Study On The Main Factors Of Influencing The Wool Production And Trade Of China

Wool is the earliest used natural fiber in the history of textile development. With features of softness, elasticity, moisture absorption, and comfort, wool has become an important material for textile industry. In 1980s, world wool industry has experienced a rapid development; however, since 1990s world wool production has declined quickly, with raw wool production of only 2.08 million tons and sheep breeding stock volume of less than 1.1 billion heads in 2009. Since the reform and opening up, the rapid development of textile industry has boosted the development of wool industry. Currently, sheep breeding stock reached 120 million heads, and raw wool production is 350 thousand tons in China. China has become the largest sheep raising country, and the second largest wool producing country, as well as the largest wool processing country, which processes 350-400 thousand tons of scoured wool, and accounts for 35% of wool processing volume in the world.Based on the analysis of world wool production and trade pattern, this paper studies the relative issues of wool production, consumption, circulation, national standard, quality control, and explores the relationship of wool price between international and domestic markets by using the average quarterly price data of major wool exporting countries from 1999-2010. The results show that market prices of raw wool of international and domestic markets are closely correlated, with apparent cointegration relationship. Error correction mechanism exists among raw wool markets in China, Australia, New Zealand, and SouthAfrica; International market guides domestic spot market of raw wool in China. Then, this paper analyzes the relationship between the change of international market price and domestic raw wool supply and import demand by using import demand model. The results of raw wool import demand model show that with other factors holding constant, when raw wool demand increases in China, Australia enjoys the most benefit, then South Africa and New Zealand, domestic raw wool consumption increases the least. This is a warning signal for raw wool producers in China, meaning that wool processing enterprises have weak preference for domestic raw wool, and increased raw wool demand is mainly satisfied by import. The import elasticity coefficient shows that Chinese wool demand for main wool export countries is elastic.Analysis of China's wool import and export pattern shows that China heavily depends on world wool market. Large bulks of raw wool import which accounts for the most proportion and scoured wool rather little, and relatively little wool export. Analysis of world wool market competitiveness shows that Australia and New Zealand enjoys the absolute advantage in international wool market, during which Australia enjoys the monopoly situation in world raw wool market, while New Zealand is the most competitive country in world scoured market. Some other countries are still competitive in world raw wool market, including Uruguay, South Africa and Argentina. While some other countries are still competitive in world scoured wool market, including Mongolia, Uruguay, Turkmenistan, and Argentina. Though China is a big wool production country, it lacks of competitiveness in international wool market.Analyzing China's wool import influencing factors based on gravity model shows that, firstly, Chinese economic scale is the most important factor affecting wool import, it means that Chinese economic development promotes the growth of the textile industry, which in turn obviously boosts the wool import, secondly, wool price in international wool market is another important factor affecting Chinese wool import, with price rising while import decreasing, Chinese wool production is apparently negative related with wool import, it indicates that the increase of Chinese wool production can lower Chinese dependence on international wool market, the economic scale, population, and distance from China of the main wool export countries carry light impacts on Chinese wool import.Based on the above conclusions, this paper puts forwards the following recommendations: (1) rationally adjust wool industrial pattern and layout; (2) greatly promote fine wool production and unify wool quality standard; (3) stipulate and implement wool import strategy. Firstly, establish wool import information pre-warning mechanism, Secondly, adjust wool import tariff, Thirdly, establish close collaboration between relevant government authorities, the MOFCOM and AQSIQ should work together to control the wool import by sharing information and data. (4) facilitate the function of industrial and professional associations;(5) promote the construction of wool auction markets, and steadily improve wool market system.