A Study On The Impact Of US And EU Subsidies On China's Cotton Sector

The impact of US and EU cotton subsidies on the world cotton production and trade is evident. Some domestic and foreign experts are focusing their attention on finding a solution to evaluate this impact. As a Chinese, the author tries to find a solution to evaluate the impact of US and EU cotton subsidies on China's cotton sector. The author tries to summarize methods of researching this problem and makes use of the comparative analytical method to research the cotton subsidies of China, US, EU. Additionally, the author chooses Agricultural Trade Policy Simulation Model to quantify this impact of US and EU subsidies on the China's cotton sector. The research results show that US and EU cotton subsidies led to a lower world market price and led our farms to lose sales. Subsidy also put the China's cotton production and trade at a disadvantage. Thereinto, according to G20 scenario, the world market price of the cotton is depressed about 47.21$/metric ton. The Chinese cotton production is totally decreased to about 78 thousand metric ton. At the end of the paper, the author gives five proper suggestions based on the analysis.