Before China entered the World Trade Organization（WTO）in late 2001 many analysts expected considerable adverse impacts on agriculture in general and cotton production in particular. The Sino-US agreement on China’s WTO accession signed in 1999 indeed stipulated imports under a new tariff rate quota（TRQ）system significantly above historical heights. To prepare the cotton sector for the onslaught of foreign competition policy-makers in Beijing introduced a new regulatory system for this industry，in effect making the transition from a planned economy to a（managed）market. Accordingly，recent years have seen tremendous changes in the structures of China’s cotton industry. A closer look at China’s cotton economy is therefore well warranted as it is the world’s largest producer，importer and consumer of cotton：around 200 million farmers are said to produce cotton in China，the country regularly accounts for a fifth to a forth of world cotton production as well as some 40 per cent of global cotton imports and consumption respectively.Mao Shuchun，2002a：4；Shi Jianwei，2001：124；CWS -2006.
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