IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 01 Sep 2011 | Removal date: open ended
Still in force

Financial grant

 On 1 September 2011, the Chinese government introduced a reserve programme targeted at purchasing excess supply of cotton.
The scheme would involve the government buying cotton at 19'800 RMB (ca. 3'000 USD) per tonne between September 2011 and March 2012 - the period when cotton prices usually fall below the state purchase price. The state aid was renewed in the years 2012 and 2013 with higher price thresholds (ca. 3'300 USD/tonne). However, given that market cotton prices changed in the selected time frame, it remains unclear whether the 2012 change represented an expansion or contraction of the state aid at hand.
The programme was aimed at supporting the domestic industry but ultimately lead to growing excess world supply of cotton (cf. Secondary Sources). In the 2012/13 season, for instance, the reserve purchases amounted to 87% of China's cotton crops. The reserve programme was largely replaced with a direct subsidy scheme in 2014 (cf. Related Measures). Nonetheless, the reference price system was kept in tact for the Xinjang province, China's by far largest cotton producer.
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

263 Textile yarn & thread of natural fibres
5205 Cotton yarn (other than sewing thread), containing 85 % or more by weight of cotton, not put up for retail sale.
520511 Measuring 714.29 decitex or more (not exceeding 14 metric number)
520512 Measuring less than 714.29 decitex but not less than 232.56 decitex (exceeding 14 metric number but not exceeding 43 metric number)
520513 Measuring less than 232.56 decitex but not less than 192.31 decitex (exceeding 43 metric number but not exceeding 52 metric number)
520514 Measuring less than 192.31 decitex but not less than 125 decitex (exceeding 52 metric number but not exceeding 80 metric number)
520515 Measuring less than 125 decitex (exceeding 80 metric number)
520521 Measuring 714.29 decitex or more (not exceeding 14 metric number)
520522 Measuring less than 714.29 decitex but not less than 232.56 decitex (exceeding 14 metric number but not exceeding 43 metric number)
520523 Measuring less than 232.56 decitex but not less than 192.31 decitex (exceeding 43 metric number but not exceeding 52 metric number)
520524 Measuring less than 192.31 decitex but not less than 125 decitex (exceeding 52 metric number but not exceeding 80 metric number)
520526 Measuring less than 125 decitex but not less than 106.38 decitex (exceeding 80 metric number but not exceeding 94 metric number)
520531 Measuring per single yarn 714.29 decitex or more (not exceeding 14 metric number per single yarn)
520532 Measuring per single yarn less than 714.29 decitex but not less than 232.56 decitex (exceeding 14 metric number but not exceeding 43 metric number per single yarn)
520533 Measuring per single yarn less than 232.56 decitex but not less than 192.31 decitex (exceeding 43 metric number but not exceeding 52 metric number per single yarn)
520534 Measuring per single yarn less than 192.31 decitex but not less than 125 decitex (exceeding 52 metric number but not exceeding 80 metric number per single yarn)
520541 Measuring per single yarn 714.29 decitex or more (not exceeding 14 metric number per single yarn)
520542 Measuring per single yarn less than 714.29 decitex but not less than 232.56 decitex (exceeding 14 metric number but not exceeding 43 metric number per single yarn)
520543 Measuring per single yarn less than 232.56 decitex but not less than 192.31 decitex (exceeding 43 metric number but not exceeding 52 metric number per single yarn)
520544 Measuring per single yarn less than 192.31 decitex but not less than 125 decitex (exceeding 52 metric number but not exceeding 80 metric number per single yarn)

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