Cotton Future Market’s Guarantee Function For Hebei Cotton Industry

As a traditional agricultural hub of cotton in Huabei plain, cotton industry playsan important and indispensible role in the economic development of Hebei province.Since China become a member of WTO, the cotton industry of Hebei province hasdeveloped dramatically, attributed to the increasingly close domestic and internallinks in trade. However, in spot goods market of cotton, farmers, the income of who islargely consisted of agricultural products such as cotton, stand tremendous risks, dueto the vigorous price fluctuation of cotton in spot goods market. Meanwhile, the longchain of cotton industry helps the price risks of cotton in spot goods market effectdownstream industries like relevant manufacturing and transporting firms whose dailyoperation has been affected by the price risks in spot goods market more or less. As animportant section of market economy, future goods market of cotton should serve forthe development of the real economy, for example, cotton industry of Hebei province.Unfortunately, because of the lag of relevant research for future goods marketof cotton in Hebei province and the low participating degree of trade, future goodsmarket of cotton hasn’t yet given play to its duty of promoting the healthydevelopment of cotton industry in Hebei province. Thus, learning the successfulexperiences of cotton future market in developed countries and areas, enhancingrelevant researches in the theory and practice of domestic cotton future goods market,and exploring the effective approaches to make the best of cotton future goods marketby considering the practice of the operation of Hebei cotton industry, has significantvalues in promoting the productivity and competitiveness of Hebei cotton industryand accelerating the economic growth of Hebei province.This paper employs a researching method which combined qualitative andquantitative analysis. At the beginning, the paper collected existing researching papersabout modern future goods market theory, and qualitatively analyzed the relationshipbetween future goods of cotton and the development of cotton industry of Hebeiprovince. Then the paper quantitatively analyzed cotton future goods market’sguarantee function for Hebei cotton industry by handling relevant data witheconometric method and software. In the end, the paper come up with proposalswhich can help promoting cotton future goods market’s guarantee function for Hebeicotton industry.