Research On Chinese Cotton Industry Security

For thousands of years, cotton as the main raw material for clothing is always indispensable in human life. After the founding of new China, the Chinese government promulgated a series of policies to promote cotton production, and regarded cotton as strategic reserve materials. After China’s entry into WTO, cotton was seriously in short supply with the rapid development of textile industry. By the impact of imported cotton, cotton prices and acreage fluctuated significantly. The cotton industry even appeared some signs of soybean crisis’s phenomenon. The cotton industry not only relates to more than100million farmers’ living, but also an important raw material for the textile industry. To study the issue of China’s cotton industry security can help us to better understand the cotton industry safety situation, timely introduction of relevant laws,regulations and industrial policies to maintain security of cotton industry, to avoid a repeat of the mistakes of the soybean industry, to promote sound and fast economic development. It also had the vital significance to safeguard social stability.This research starts from soybean crisis, pointing out the path of soybean crisis by analyzing the case of soybean. By comparing similarities between the cotton and soybean industry before the crisis, the paper points that it is necessary to study the cotton industry security. Then on the basis of previous research we construct the cotton industry security model, quantitatively analyze cotton industry safety situation since2005/2006, and calculate he cotton industry safety degree. We find out that from2007/2008the cotton industry was only safe in2006/2007and2007/2008, and it became more dangerous in the past three years. Then this paper makes an analysis of the reasons from two aspects as internal and external causes, and points out that the lack of competitiveness is the internal and core reason why cotton industry is unsafe. And then use the diamond model to explore the deep-seated reasons affecting the competitiveness of China’s cotton industry. Finally, this paper puts forward some suggestions on how to maintain the security of cotton industry on the basis of the above analysis.This research mainly has the following two innovations:first, considering the foreign capital has not been in substantial control of China’s cotton industry, so we use the index of the current situation of cotton industry to close to the actual situation of China’s cotton industry instead of the control force index. In addition, this paper brings in two new indexes. They are cotton price different between domestic cotton and foreign cotton and inventory consumption ratio, which are related closely the cotton industry safety, and optimize the whole index system. Second, to transform the diamond model. Traditional diamond model is used for the analysis of sources of competitive advantage.In this paper, we use the Diamond model analyze the cotton industry uncompetitive deep-seated reasons.