Republic Of China Foreign Trade And The Impact Of Price Fluctuations On The Domestic Flower Yarn

Around 1920's, Chinese cotton spinning and weaving industry has experienced ups and downs. During the World War I, the European was involved in gun-smoke, so that the world trade and the manufacture began to shift to Far East. Chinese domestic national companies in the cotton spinning and weaving industry emerged, and developed gradually into the pillar industry. Since the Great Depression in 1930's, the global product was relatively excessive, resulting in the sharp drop of price. When it spread to China, the national cotton textile industry fell into crisis. Many scholars have studies the prosperity and decline of Chinese cotton textile industry deeply from different perspectives, such as political economy method, enterprise management and operation, etc. However, the former studies mainly focus in the domestic market, and just took the foreign trade as an influence factor. There is rarely article concerning on the price fluctuation of cotton yarn. Reading and reorganizing the historical materials and data, the author gradually realized that China, as a part of world market, was an open economy at that time, and it was influenced by world market to a great extent.This article is to analyze the reasons of the rise and fall of Chinese cotton textile industry in an international background, with the international economics theory. Beginning with the cotton and yarn trade, the paper analyzes the characteristics of cotton and yarn import-export trade, compares with domestic and foreign cotton yarn price fluctuations, explores the price mechanism, as well as the influence factors of price .Different from the traditional view of"the oppression theory", this article connects"the cotton and yarn market - - foreign trade - - price"as a system, and forms a new explanation in the perspective of the overall pattern of world economy and the theory of industrial life cycle. Since there was an apparent industry transfer of cotton textile from western developed capitalist countries to backward colonial countries, the yarn manufacture, in the later period of product life cycle, faced to the fierce competition. Influenced by the world market, the price of cotton and yarn were likely to vary in an unsynchronized way, which causes the trouble of Chinese national enterprises. Because the Chinese national cotton textile industry started late with low technology, it was in the primary processing stage of whole industry chain, and the products lacked the competitiveness. In terms of industrial structure, the weaving lagged behind the spinning in China, hence the backward linkage industry was incapable to absorb the production of yarn, which led to the Chinese cotton textile industry's crisis. At the same time, as Chinese"passive trade", it lost the opportunity to participate in the price fixing, and had to accept the world market's one-way influence. As a result, the existing space of national enterprises was limited and compressed.