Zhou Shengtao:Standing up to Financial Crisis Hand in Hand, Promoting Cotton Industry's Sustainable Development

Dear guests, Ladies and Gentlemen, Good morning! Today, we get together in this famous historical city Nanjing to discuss the cooperation and development of China and world cotton industry. On behalf of the Conference Organizing Committee, I warmly welcome all guests and delegates attending this 2009 China International Cotton Conference. I also want to express our sincere gratitude to the People??s Government of Jiangsu Province and the Supply and Marketing Cooperative of Jiangsu Province for their great support to the conference. The theme of the conference, ?°Meeting the Financial Crisis and Pursuing Sustainable Development for the Chinese and Global Cotton Industries?? has great significance in strengthening our confidence to deepen the cooperation and overcome the crisis. The conference serves as a platform for the senior governmental officials and trade organization leaders and experts from major cotton producing countries, consuming countries, and international organizations, and presidents of world famous cotton companies to have in-depth discussions and exchanges on how to deal with the financial crisis and seek win-win cooperation so as to achieve sustainable development for global cotton industry. The conference will also analyze and prospect for the cotton and cotton textile markets in China and the whole world. From the second half of 2008, world economy has been confronted with the most serious challenge yet since the Great Depression in the last century. The financial crisis tested the economic administration capacity of the governments of all countries and the wisdom of human being. All countries were taking actions one after another, trying all possible means to ease the serious impact by the crisis. Chinese economy and cotton textile industry have also suffered deeply from the violent market fluctuation, drop of export, and shrinking of employment. The Chinese Government has taken decisive actions to adjust its macro economic policies and adopt active financial policies and moderately loose currency policies. It has rapidly issued a package of plans for further enlarging domestic demand and promoting the stable and relatively quick economic development. The goals of these policies were to ease the outstanding contradictions during the economic operation, enhance market confidence, and stabilize social expectation. Based on the current situation, these policies have taken preliminary effect. The economy has shown positive changes, with domestic demand rising soundly, market confidence recovering to some extent, and social expectation improving. The situation is better than anticipation. The financial crisis also tested the capacity of all in cotton industry. In 2008/09, the actual total output of cotton in China reached eight million tons, another harvest year since the beginning of the 21st century. Unfortunately, with the global financial crisis, Chinese textile industry suffered from a slump in production and market since the new cotton crop arrival. The export dropped, product overstocked, demand weakened, and the cotton price kept on falling by a large margin. With no enterprise buying, cotton farmers found it difficult to sell the cotton they grew so painstakingly. The pessimism was prevalent in the industry. In early November, based on its thorough investigation and study, the China Cotton Association submitted a report to the State Council proposing some measures to deal with the financial crisis and protect the interests of cotton farmers. These proposals were adopted and some relevant departments quickly issued regulatory and control policies, which have played a crucial role in stabilizing the sharply dropping cotton market and reducing the losses of the cotton farmers. Backed by national policies, since last December, the domestic cotton price has stopped dropping and begun to rise by a small margin. Especially in late April this year, during the planting of the new cotton, the cotton price had risen by 20% over the lowest point on November 20 last year, which stimulated farmers?? enthusiasm to keep on planting cotton. Though cotton planting area shrank to some extent in 2009, the situation is better than initial expectation. According to the general principle of ?°guaranteeing growth, enlarging domestic demand, and adjusting structure?? the Chinese Government has adopted a series of policy measures to support the development of textile industry and issued the plan for adjusting and vitalizing textile industry so as to ease its difficulty, stabilize export of textile goods and garments, and stimulate cotton consumption. We should know that the world economic recession caused by the financial crisis has not been reversed ultimately. The problems with the financial system have not been redressed. The downturn of the entity economy has gone beyond our expectation. The global economic recovery may be a relatively long process full of twists and turns. Although China??s economic operation has shown some changes, its basis is yet to be strengthened. China??s cotton production has been shrinking; external demand for textile products and garments does not take a favorable turn yet; and export situation is still grim. We had better take difficulty and risk more seriously, expect longer duration for the crisis, and make more complete preparations in policy measures. Crisis brings to us not only disasters, but opportunities for us to grow and become mature. After the cold war, world economy began its globalization process. Market operation mechanism and production mode of industrialization have been spread to the whole world. Both the developed and developing countries have enjoyed the benefit of globalization. National economies of all countries have merged more or less with each other, making them bound together for good or ill. The world economy was caught off guard by the current financial crisis. The unexpected thing really happened. It is necessary to save the market. However, the more important thing is to draw lesson from the experience and study how to build up a sounder mechanism and put in place a long-term, forward-looking system design. Two years ago, the China Cotton Association has suggested the establishment of a hardship consciousness and a long-lasting mechanism for the development of cotton industry. China is a major cotton producer and consumer, and also a developing country with a large population and scarce land. Because of these, China must develop its cotton production by sticking to stable planting area, enlarging scientific and technological input, and increasing unit yield and quality. To do so, during policy design, China must put stress on cotton farmers?? interests and guarantee their stable income while find the point of balance among the interests of farmers, workers, and businessmen. It should also give comprehensive consideration to such factors as price ratio of grain and cotton, basic income of cotton farmers, cotton price difference at domestic and overseas markets, bearing capacity of textile enterprises, and reasonable profit space for circulation enterprises. Then, from the point of view of achieving sustainable industrial development, it should establish a long-lasting, flexible, and active macro regulatory and control mechanism and avoid the vicious circle with agriculture hurt by cheap cotton and industry hurt by expensive cotton. For China??s textile industry, is it necessary to review its traditional growth mode? Although the textile products and garments ?°Made in China?? are seen all over the world in huge quantities and complete varieties, only 15% to 20% of the market value in the transnational industrial chain goes to China??s textile industry. Under the international financial crisis, more and more Chinese textile enterprises realize that only by enhancing independent innovation and technical transformation, eliminating the backward players, and optimizing layout can the industry turn ?°crisis??into ?°opportunity??and have a new lease of life. Now, we should on the one hand stabilize the share enjoyed by Chinese textile products and garments in international market, and on the other hand, enlarge domestic demand, promote structure adjustment and industrial upgrading of the textile industry, consolidate and strengthen the role of textile industry in supporting employment and benefiting farmers, and help China??s textile industry turn from large in size to powerful in quality. In a long run, China needs to leap from a power in manufacturing to a power in consumption. It is an in-depth thinking brought to us by the financial crisis. In recent years, China??s domestic consumption has been growing steadily. Statistics show that, during the six years from 2003 to 2008, China??s total social consumer goods retail volume had shown an obvious trend of rising, with the actual growth rates being 9.2%, 10.2%, 12%, 12.6%, 12.5%, and 14.8%, respectively after deducting the price factor. In the first quarter of this year, China??s total social consumer goods retail volume increased by 15% over the same period in the previous year. Deducting the price factor, the actual growth rate was 3.6% percentage higher than that during the same period in the previous year. Its development inertia won??t be curbed by short-term economic fluctuation. However, it is not enough, because the income growth of the ordinary people, especially the farmers, has been slow. To stand up to the financial crisis, the Chinese Government is determined to guarantee the life quality of ordinary people, enlarge domestic demand, adjust internal and external demand structures, quicken the formation of the pattern with economic growth being boosted by focusing on domestic demand and stabilizing external demand, and put Chinese economy onto a more balanced track. To cooperate with the governmental measures of ?°guaranteeing growth and enlarging domestic demand?? the China Cotton Association will initiate ?°Cotton China??logo popularization activities this year. By featuring ?°high quality, pure cotton, and environmental friendliness?? the logo aims to upgrade awareness and buying will of the consumers, promote consumption of cotton and cotton products, upgrade the integral quality of Chinese cotton and cotton products, and increase market share for high-quality raw cotton and cotton products. It is our common responsibility to boost consumption of cotton fiber, be it made in China or in any other country. Tonight, by enjoying together a cotton fashion show, let??s spend a wonderful night and share the concept of cotton --- being ?°natural, environmental-friendly, and healthy?? Ladies and gentlemen: There are two old Chinese sayings. One says that ?°as long as green hills remain, there??ll never be a shortage of firewood?? The other says that ?°the fire burns high when everybody adds wood to it?? So long as we, cotton farmers, cotton dealers, and textile enterprises, hold our ground and make concerted efforts, we can surely achieve our goal. The entrepreneurs should try their best to fulfill their social responsibilities, deal with various risks and hidden troubles, seize the moment when world economy makes the turnabout, keep on forging ahead and making innovation, and seek new development opportunities. Under economic globalization, fates of all countries in the world are tied tightly together. No country can stay out of the international financial crisis or overcome it on its own. Let??s hope that we in the cotton trade from all countries help and cooperate with each other and realize new leap-forward after the crisis. Let??s hope that when the world enters a new growth cycle, there will be no simple repetition as it was in our former economic cycle, but a meaningful resuscitation full of green vitality. Located in the Yangtze Delta, Jiangsu is one of the richest provinces of China and a famous cotton-producing area and textile base in the country. Its cotton and cotton textiles have long been known for their top quality. I recommend you to have a look around during your stay in Jiangsu. You will enjoy a good time here. Finally, I??d like to congratulate the conference beforehand on its success. Wish every one of you a smooth career, good health, and happy family life! Thank you!