Economic and social importance of the growing natural fiber market: China's role in the international cotton market

The labour-intensive textile industry market can be divided into two segments: the traditional one - which is characterized by low wages, poor quality and/or standard products- and the innovative one, that displays well-paid workers, high technology machines and design. Mass production generally tends to be concentrated in developing or newly industrialized countries due to comparative advantages in terms of labour cost. Nevertheless, there are numerous examples of relocation by the industrialized countries (EU) also for the production of high quality products. The textile industry has played a decisive role in the processes of development of some Asian countries (e.g.: China, India, Hong Kong, Bangladesh) by providing substantial employment increase and significant contributions to export earnings. In the developed countries, one of the main reasons for its great importance is in terms of employment rate, that, with the economic crisis and competition based on lower-cost countries in the developing world, has been greatly reduced, creating concerns about the entire manufacturing system. In Asia, the demand for new clothes is growing and the supply is below the demand. China, the world's largest producer of cotton, consumes more than it produces. The aim of this paper is to investigate the main features of world cotton market by focusing on the role of China, and analysing the effect of predetermined macroeconomic variables on Chinese cotton market. First, a global overview of cotton market is given; after that, the main reasons for considering China as the leading country in this sector are illustrated. To follow the paper analyses what factors and to which extent they may have affected Chinese cotton production, consumption and international trade over the last years by means of a correlation matrix. Findings and conclusions are lastly presented.