The Research On China's And U. S. Cotton Subsidies And The Impact Of China's Cotton Trade

The textile industry revitalization plan has been implemented. Cotton as one of the most important textile material, its demand will increase greatly. Although China's cotton production accounts in the world, there is a large gap between the domestic cotton supply and demand. It is need to import large quantities of cotton to meet domestic demand. The United States is a major importer for our country. Its cotton subsidies will affect our cotton trade to some extent.Firstly, this paper summarized some basis theories on agricultural subsidies and the rules of WTO on agricultural subsidies. Besides, the paper also analyzed the economic effects of subsidies. That provided a theoretical support for the implementation of the U.S. cotton subsidies.Secondly, the article describes the situation of China's cotton trade, summed up the characteristics of trade and competitiveness. Since joining WTO, China has made many promises in cotton fields. That increased impact on our cotton to some extent. On the basis the article of analyzed the existing cotton trade protection policy. The article studied in China and U.S. cotton subsidies, summed up the lack of China's cotton subsidies and the characteristics and advantages of U.S. cotton subsidies. It is also found out the similarities and differences of China's and the United States cotton subsidies through comparative analysis.It is helpful to establish and improve China's cotton subsidies policy.Finally, the article took Agricultural Trade Policy Simulation Model (ATPSM) to simulate the impact when the United States cut down even abolishes the cotton subsidies. The results show that the U.S.cotton subsidies have played an effective protection role. That made the domestic cotton price stability, promote the production, protect the farmers' income and expand exports. Besides, the U.S. cotton subsidies damage the interests of other external cotton producers. Specific to the impact on China's cotton trade, it is need to look in two parts. On the one hand, U.S. cotton subsidies would undermine the interests of cotton producers. It is not conducive to the production of cotton; on the other hand, U.S. is the first cotton importer for China. Its high cotton subsidies will reduce the cost of imports. It is beneficial for China's cotton importers and consumers.All in all, it is can be believed that learning the content and its performance of U.S. cotton subsidy policies is very helpful for China to improve its current cotton subsidies system. Although, it's bad for the producers and exporters it's benefit for the consumers and importers.